Vertigo Software is a big Microsoft partner and a major supporter of the Redmond company’s upcoming Windows Phone 7 mobile operating system, with multiple projects in the works. But lately the longtime .NET development shop has begun dabbling in apps for Apple's devices and Google Android phones, as well.

"The No. 1 question we get is, ‘Can you build us an iPhone and iPad application?’ ” explained Scott Stanfield, chief executive of the Point Richmond, Calif., software development and consulting company.

Therein lies one of Microsoft's biggest opportunities -- and one of its hardest tests -- in its attempt to come back in the mobile market.

The company is hoping to bolster the lineup of apps for Windows Phone 7 by tapping its vast network of software partners -- the independent developers and shops responsible for much of the company's success on PCs and computer servers.

But the rise of Apple and Google in mobile phones has caused even the most staunch Microsoft supporters to start hedging their bets. At the same time, the consumer target market for Windows Phone 7 may create a mismatch for some of the business software developers historically at the center of Microsoft's base.

Untapped Potential

The importance of apps in mobile-phone buying decisions makes the courtship of those developers key to Microsoft's fate in the mobile market -- and, by extension, to its broader future, as mobile devices play a larger role in the technology landscape. An early leader in mobile phones, Microsoft is now No. 4 in the U.S., behind BlackBerry, the iPhone, and Google's Android platform.

Some of the stars are aligning. Apple's support of the Objective-C programming language for the iPhone, and Android's use of Java, translate into significant untapped potential for Microsoft among traditional .NET developers.

"There’s a few million of these guys out there, and they’re really champing at the bit to bring a lot of their applications and code to Windows Phone 7," said analyst Al Hilwa, a Seattle-based program director for applications development software at the IDC research firm.

Microsoft set the stage by basing its Windows Phone Developer Tools on .NET development technologies, the Silverlight interactive platform and the XNA Game Studio. The company is emphasizing ease of use in the tools, trying to make it straightforward for developers to apply their existing skills to make mobile apps.

“Developers tend to have a naturally inquisitive side,” said Scott Guthrie, the corporate vice president in charge of Microsoft’s .NET development platform, after giving a demonstration of the tools at a recent media briefing. “If it’s fun and it’s cool and you can build something great, you’re going to see a lot of interest.”

A .NET disconnect

The question is whether that interest will translate into the actual production of mobile apps. One challenge is that .NET developers have traditionally tended to focus on hard-core business software, while Microsoft is positioning the first version of Windows Phone 7 more for broad consumer usage.

"It doesn't feel like the typical .NET community is doing much with Win Phone 7," said Ken Levy, president of the MashupX LLC consulting firm, co-host of the CodeCast podcast and president of the .NET Developer Association user group in Redmond.

Levy, formerly a Microsoft community manager for Visual FoxPro and Visual Studio, said he hopes to see Windows Phone 7 succeed, to create more competition in the marketplace. He cited the large crowd that attended a recent .NET Developer Association meeting on Windows Phone 7 as evidence of the interest.

But in general, he said, “.NET developers don’t build consumer apps.”

Early limitations in Windows Phone 7 won't help. They include the inability to run one third-party application in the background while another is active in the foreground, a capability commonly known as multitasking -- a form of which Apple has added to the latest version of its iOS platform.

In addition, Windows Phone 7 will launch only on the GSM mobile standard at first, initially excluding wireless giant Verizon as a carrier. The Wall Street Journal reported yesterday that AT&T will be the exclusive U.S. provider of Windows Phone 7 when it launches in November -- pitting Windows Phone devices from Samsung, LG and HTC directly against the iPhone in AT&T stores.

Enterprise app channel?

Then there's the issue of app distribution. Microsoft will have a Windows Phone Marketplace similar to Apple’s App Store, but many enterprise developers and companies won’t be comfortable issuing internal apps via a public marketplace. Microsoft's previous Windows Mobile platform allowed for direct installation.

Microsoft issued this statement in response to our inquiry on the topic.

Windows Phone 7 customers, including businesses, will have access to a wide range of quality tested applications through Windows Phone Marketplace. Businesses can submit their own applications for distribution through Windows Phone Marketplace, and we offer guidance for writing corporate applications in a way that helps protect company data. As part of our commitment to ensure a consistently high quality user experience, it will not generally be possible to side load apps onto a Windows Phone 7 device. We recognize that some developers and business organizations would like an additional private distribution mechanism, and are investigating potential solutions to address these customer needs.

Even with those challenges, Microsoft executives say they’re encouraged by what they see so far. Charlie Kindel, a Windows Phone general manager, said the company is focusing on winning over developers from rival mobile platforms, and web developers, in addition to traditional .NET developers.

"We're seeing great progress across all of those camps," he said.

The developer tools for Windows Phone 7 were downloaded more than 300,000 times even before they were finalized, according to the company. Apps for high-profile online services such as Netflix and Twitter will be available at launch. Microsoft also has announced a large lineup of games for the phones.

At the recent media briefing, IDC analyst Hilwa asked whether Microsoft was aiming for a specific number of apps in the Windows Phone Marketplace at launch. Android has more than 80,000 apps, iPhone more than 250,000.

"Look, people want quality, and that's what we're going to give them," replied Brandon Watson, a Windows Phone director, saying the "numbers game" isn't as important. "The right number of apps is the number of apps you have on your phone. That's what we're targeting -- to make sure you get the apps that you want, in the categories you need, and they're high-quality apps."

As a longtime Microsoft partner and a backer of .NET since the beginning, Vertigo's recent projects have included using Microsoft’s Silverlight technology to create the high-definition online video experience for NBC’s coverage of the Vancouver Olympic Winter Games, and Sunday Night Football.

Its current projects for Windows Phone include an app for Clear Channel Communications, and an internal app for use by Microsoft itself.

Stanfield, the company's CEO, sounded cautiously optimistic about Windows Phone 7 this week, pointing in particular to user-experience advances such as panorama and pivot controls.

He said it’s now necessary to include Android and the iPhone in the mix to provide a well-rounded mobile offering. But he expressed confidence in Microsoft’s ability to rebuild its market share to the point that companies such as his can be successful on the Windows Phone platform.

“This is a moonshot for Microsoft. And the funny thing is, they’ve been to the moon before. So I know they have the ability to do it. ... The question is, are they going to keep a colony on the moon this time?”