Sources: Microsoft In Talks To Acquire Mobile App Development Startup Xamarin

Microsoft is in the final stages of negotiations that could lead to either an acquisition or major investment in Xamarin, a mobile startup whose tools make it possible to code iOS and Android apps using Microsoft development tools, sources with knowledge of the discussions told CRN recently.

It's not clear whether the talks are ongoing or if a deal has been finalized. But with Microsoft holding its Build conference next month in San Francisco, acquiring Xamarin would send a powerful message to developers that things are going to be different under new CEO Satya Nadella, sources told CRN.

CRN reached out to Xamarin and Microsoft for comment. Xamarin declined to comment, and CRN will update this story if we hear back from Microsoft.

Adding Xamarin would allow Microsoft developers to code iOS and Android apps using Visual Studio and application life-cycle management tools such as Visual Studio Team Foundation Server, a collaboration platform that supports agile development, multiple IDEs and runs on premise or in the cloud.

[Related: Nadella: Microsoft's Old Way Of Doing Things Won't Cut It In The Future ]

For Microsoft, this could amount to an explosion of apps that tie into Windows Azure and other Microsoft services. So while Xamarin enables Microsoft developers to build apps for competing platforms, Microsoft would benefit from the expanded services opportunity, as well as additional licensing revenue for Visual Studio, Team Foundation Server and other tools.

"This would definitely be a big statement from Nadella, and could be the beginning of a really big strategy shift for Microsoft," Scott Stanfield, CEO of Vertigo Software, a Richmond, Calif.-based Microsoft development partner, told CRN.

"It would almost be like a gift to the .Net community -- Microsoft would be saying, sorry we aren't stronger in mobile, but now we're going to make it so developers can play in both worlds," Stanfield added.

Given the decline in Windows revenue, it would make sense for Microsoft to focus on making money from Azure and cloud services, Rocky Lhotka, CTO of Magenic, a Minneapolis-based Microsoft partner, told CRN. "The more client devices they can reach with their platform, the better off they are," he said.

Adding Xamarin also would solve Microsoft's longstanding problem with the low app count on its app store. According to some Microsoft partners, Xamarin would instantly create a robust, vibrant ecosystem of excited developers who would no longer have to wonder if the work they’re putting in building Windows Phone apps is worth the effort.

"Visual Studio needs to have a way for mobile app development to be platform-agnostic," Ric Opal, vice president at Peters & Associates, a Microsoft partner in Oakbrook Terrace, Ill., told CRN. "Developers want to write once and land on any target. If Microsoft makes it easier for developers to build apps for any platform, they will accelerate the quantity and quality of apps in their apps store."

NEXT: Microsoft Carrier Partners Excited

Sources also told CRN that Microsoft's carrier partners are excited about Xamarin because it can reduce the amount of support calls they deal with when customers switch phones and their apps stop working or become unavailable.

Microsoft and Xamarin last November unveiled an official partnership aimed at making it easier for developers to build native mobile apps for iOS and Android using Visual Studio. Xamarin technology is being integrated with Microsoft's development tools and Microsoft also is making Xamarin tools available to its MSDN subscribers.

Even with the partnership, some developers are hesitant to use Xamarin because it's a small company that isn't supported as part of the Microsoft ecosystem, which is why an acquisition would make sense for Microsoft, sources said.

Xamarin makes money through support subscriptions that range from $299 for individuals to $1,899 per user annually for enterprises. The San Francisco-based startup has raised $28 million in two funding rounds from Lead Edge Capital, Charles River Ventures, Floodgate and Ignition Partners.

Xamarin's co-founders, CEO Nat Friedman and CTO Miguel de Icaza, founded Ximian in 1999 and worked together to build Mono, an open-source implementation of the Microsoft .Net development framework. They joined Novell in its acquisition of Ximian in 2003 and left to start Xamarin when Attachmate bought Novell in 2011.

At Microsoft, anything is on the table right now when it comes to making money on mobile, one source familiar with the company's thinking told CRN. "There is an open-mindedness that wasn't there before, and a realization that they have to recognize the world differently," said the source, who requested anonymity.

PUBLISHED MARCH 17, 2014