Microsoft Sued for Tracking User Locations

Microsoft is facing a lawsuit for allegedly tracking its mobile customers’ locations without permission, as concerns continue to mount over wireless privacy issues.

A class action lawsuit, filed Wednesday in a Seattle federal court on behalf of a Windows Phone 7 user, claims Microsoft’s Windows Phone 7 OS has camera software that ignores customers’ requests not to be tracked.

The lawsuit says Microsoft sent Congress a letter earlier this year insisting it only collects location data with users’ consent. Instead, the litigation claims, “Microsoft’s representations were false,” because the Windows Phone 7 OS transmits data, including latitude and longitude, when users activate its camera app.

The class action suit comes just a few weeks after the Redmond, Wash.-based software giant said it improved location filtering, so its phones and laptops no longer return exact locations.

Microsoft’s software update followed a report from Stanford security researcher Elie Bursztein, who alleged Windows devices stored Wi-Fi data that pinpointed peoples’ past locations. Every Wi-Fi device has a unique ID, called a “MAC address,” which the previous software could easily track.

Microsoft’s data collection policies differ from Apple’s and Android’s methods. Apple came under fire earlier this year for recording the locations of iPhones and iPads in an unencrypted file on the device, which quietly logged more than a year’s worth of unencrypted data even when people disabled location software. Google’s Android devices collect tracking data, but records only the last few dozen locations.

Microsoft, on the other hand, says only user-allowed apps collect location data from its phones, and adds the apps don’t store data on the phone itself, so it can’t be hacked or synced back to the company.

But while location tracking is under fire from U.S. lawmakers, who have been investigating how mobile devices collect personal data without permission, location tracking will likely continue in phones and their apps.

Many app developers are small businesses with fewer than 10 employees. Their apps collect user data, including location, e-mail and phone numbers, which they sell to advertising networks who use the data to target their products.

Without advertising revenue, app developers may have to charge more for their software programs, and customers may need to decide whether privacy or less-expensive apps are more important. It may also mean further legal scrutiny and potential crackdowns on how wireless businesses use customers’ personal information is in store for the mobile industry.

Microsoft Bets On Gigwalk App

Tech giant Microsoft Tuesday became the first major company to endorse “crowd commerce,” a fast-growing form of eCommerce that is gaining tractionin some of Silicon Valley’s highest circles.

Robert Scoble

Simply put, the goal of crowd commerce is to connect an army of mobile smart phone users with individuals or businesses that need things from those users, and are willing to pay for them.

Microsoft [MSFT  27.2116    0.6216  (+2.34%)   ] will be using this ‘crowd’ to seek out tens of thousands of photos of businesses around the country as part of a massive project to improve photographic content on its search engine Bing.com.

“We’ll be making the most of this great imagery on Bing this fall and winter, and we hope that it will become another strong feature to help attract customers,” a Microsoft spokesperson told CNBC through email.

Microsoft has placed that enormous challenge on the shoulders of Gigwalk, a Mountain View, California startup that launched just nine weeks ago, but has already gained enormous interest from the Apple [AAPL  375.80    2.00  (+0.54%)   ] iPhone community with its flagship Gigwalk application.

The Gigwalk app matches iPhone users (looking to make a few extra dollars) with companies that need a specific location-based task done, and are willing to shell out the cash for it.

Gigwalk Task via iPhone

“They [Microsoft] asked us, hey, could your workforce be deployed to capture panoramic photos, tens of thousands of businesses, in all the metro areas you support?” Gigwalk CEO Ariel Seidman tells CNBC. “So we said sure.”

With the lure of quick and easy payouts—Microsoft will pay between $4 and $7 per photo job—Seidman, a former Yahoo mobile products manager, has successfully grown a large following.

Tuesday, the company announced that its user base has reached 50,000, and that companies are now posting over 100,000 paying ‘gigs’ (the app’s slang for a job) on its app.

Seidman has also attracted seed money from some Silicon Valley’s most prominent investors (including LinkedIn [LNKD  103.06    0.62  (+0.61%)   ] Co-Founder Reid Hoffman).

Landing Microsoft as a major partner was not without its challenges. In order to allay potential concerns about Gigwalk’s near-anonymous user-base (pretty much anyone can sign up), and to justify the cost the program would incur to Microsoft, Gigwalk first had to prove its users were up to the task via a trial pilot program.

“We certainly wanted to be convinced that we could get good overall quality from a large casual workforce,” a Microsoft spokesperson said. “And the results of our trial in New York City suggested we could.”

Gigwalk’s clients also include navigation company TomTom and the popular website Menupages.com.

Microsoft Office Alternatives: Many Are Trying, Few Are Buying

When it comes to deploying Microsoft Office alternatives such as Google Apps, Zoho or Lotus Symphony, enterprise IT managers are in a state of intense curiosity but are still not ready for widespread adoption, according to a new Forrester research report entitled “Market Update: Office Productivity Alternatives.”

What they are willing to do more and more is complement Office with alternative tools and, in some cases, do full Office replacements for specific employee groups, writes Forrester analyst Matthew Brown. Regardless of the low adoption rates of Office alternatives, companies are eager to cut license costs, eliminate software assurance and curb dependency on Microsoft.

[Slideshow: 13 Cool Features of Office 365]

Office alternatives, however, have only a tiny slice of the enterprise office productivity pie even as the buzz increases around Google Apps and other alternatives. Of the 150 IT decision-makers that responded to Forrester’s survey, only 8 percent support Google Apps, 8 percent support Oracle Open Office (recently released back into the community as OpenOffice.org), 5 percent support Corel WordPerfect Office and 4 percent support IBM Lotus Symphony.

Yet a higher percentage (46 percent on average) of survey respondents are still “somewhat interested in”, “actively looking at” or “piloting” alternatives.

So why are they afraid to pull the trigger and replace Office?

IT Loves Web-based Alternatives, But Not Enough to Buy Them

Enterprise IT is hung up on alternatives like Google Apps and Zoho that are purely Web-based, but for testing more than for full-scale deployment. For example, e-mail is often the lead-in for Google Apps use but Google Docs uptakes only happen in a “grass-roots fashion or are turned on as a company ramps its use.”

The numbers don’t lie. Despite 44 percent of survey respondents being “somewhat interested in” in Web-based productivity tools and 25 percent “actively looking” or “piloting”, only 3 percent report that they have implemented Web-based Office alternatives (i.e. spent money on them).

The obstacles to broad deployment, according to Forrester’s research, continue to be user acceptance and learning curve and compatibility with Microsoft Office file formats.

Office Replacements Only for Small Segments of Workforce

When an organization does support Office alternatives, that does not mean Microsoft Office is then thrown out the window. Every survey respondent who reported supporting an Office alternative also supports some version of Microsoft Office.

This reinforces that view that Office alternatives, both Web-based and desktop-based, serve as replacements for certain groups in the company, according to Forrester. For example, contractors, temps and deskless workers would be candidates for a full-on Web-based alternative and lawyers would be candidates for Corel WordPerfect’s PDF editor and automated features designed for legal departments.

Yet for most information workers who generate original content and rely on file format interoperability, Web-based alternatives are used as complementary tools to mix collaboration features with older versions of Microsoft Office.

The Threat to Microsoft Office Upgrades

Office alternatives may not appear to be a direct threat to Microsoft’s cash cow, but they could put future Microsoft Office upgrade cycles in jeopardy, according to Forrester.

“With more choice,” writes Brown,”productivity decision-makers will delay Office upgrades as they evaluate alternatives as part of the sourcing process.”

Forrester has also found that its clients are using Office alternatives as leverage when they negotiate with Microsoft about Office upgrades.

“We expect the role of office alternatives in the market only to grow as vendors make improvements to close the functionality and compatibility gap, and as buyers continue to show interest in cutting costs by provisioning differently to different types of users,” Brown writes.

All of this makes the arrival of Microsoft’s Office 365 cloud productivity platform more important, notes Forrester. It will provide a lift to both Microsoft and providers of Web-based Office alternatives.

“Office 365 will have a major impact in accelerating the transition to Web-based platforms for office productivity integrated with collaboration tools,” writes Brown. “Alternatives vendors will say that they were the first to market, but Office 365 will undoubtedly steal some of their thunder.”

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