Light Reading
Superior technology and customer loyalty give Blackberry a head start over mobile apps rivals

RIM's Unified Theory

Light Reading
LR Mobile News Analysis
Light Reading
3/21/2006
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Michael Pate has never met Jim Balsillie, but he's been in touch with the BlackBerry CEO.

"I've gotten three or four emails from [RIM] management, from a couple of VPs and the CEO," says Pate, the director of IT for Houston-based Complete Production Services Inc., an oilfield services firm that has around 100 Blackberry users. "They were more form letters, just letting me know 'We're sympathetic to the situation with the lawsuit, we apologize, this is now behind us and we're moving forward, it's not going to alter our strategy or impact our future direction.'"

The charm offensive from RIM brass came in the wake of the settlement of the drawn-out patent dispute with software holder NTP Software Inc. . It's part of a concerted effort on the part of the Waterloo, Ont.-based mobile email leader to reassure its existing enterprise customers and to fend off the growing threat from devices running Microsoft Corp. (Nasdaq: MSFT)'s Windows Mobile 5.0. (See RIM, NTP Come to Terms and Mobile Email Gets More Pushy.)

RIM has made plenty of news since the lawsuit was settled on March 3, including a partnership with Google (Nasdaq: GOOG) for instant messaging via Google Talk and an aggressive marketing effort for its new line of Blackberry 8700 devices. The biggest news, however, was RIM's March 10 acquisition of Ascendent Systems , a San Jose-based provider of mobile VOIP systems. (See RIM in Voice 'Push'.)

The Ultimate Goal The Ascendent acquisition is squarely aimed at RIM's long-range goal: taking Blackberry beyond enterprise mobile email and making it the single mobile device for unified messaging and business applications. That strategy will also put it in competition with the carriers that currently offer Blackberry service to enterprise customers -- in particular with Cingular Wireless, which on February 22 released its OfficeReach product, a VPN service that integrates mobile phones with office landlines, voice messaging, and so on.

In the view of Forrester Research Inc. wireless analyst Ellen Daley, who met last week with RIM management, RIM's relentless focus on superior technology and usability gives it a powerful advantage in its looming competition with Microsoft for control of the booming enterprise mobile messaging market. (See Poised for Takeoff?.)

"Before I met with [RIM], I thought Microsoft would win the applications battle just because they're Microsoft," Daley remarks. "But I am continually impressed by RIM's focus on the engineering side, on building seamless technology and making it all work for the user. They really do have the best technology."

That comment is echoed by enterprise customers whose loyalty to RIM was shaken, but not completely stirred, by the uncertainty of the NTP lawsuit.

"No one else comes close to providing the same functionality and low-overhead maintenance" that RIM does, Pate explains. "We looked at Treos, Microsoft Smartphones, all of them. The best they can do is match Blackberry, so why go through the pain of switching to get what you've already got?"

Rapid App Development One company that made the switch is law firm Keesal, Young and Logan, which has offices in Long Beach, San Francisco, Seattle, Anchorage, and Hong Kong. According to information director Justin Hectus, the firm -- with roughly 80 people using mobile email -- switched from Blackberry to Good Technology Inc. 's GoodLink mobile email system about three years ago because it wanted a solution that could run on any device via any carrier -- and the uncertainty surrounding the NTP lawsuit only confirmed that choice.

"We have five different devices in play, using three different carriers," explains Hectus. "RIM has made some movement on the carrier side, but on the device end, I still think Good is a much better fit."

Hectus adds that Good also offers user-friendly tools that allow rapid development of specialized enterprise applications, including a mobile time entry system that allow attorneys to log billable hours while on the road. Therein will lie the real test: when companies consolidate mobile communications -- including voice, data, and email -- on one device and begin rolling out business services such as field-service and salesforce automation applications. The new Palm Treo 700w, for example, runs mobile versions of Microsoft Outlook and Office, including Word, Excel, and PowerPoint.

The question, as Forrester's Daley puts it, becomes not whether other applications will run on the devices, but how easy it is to get applications from third-party vendors to run.

In that sense, while RIM is considered a proprietary system (particularly by "open standards" competitors such as Good), it may have an advantage, at least temporarily, over its looming rival in Redmond.

"It's not all about pushing Microsoft applications out to mobile devices, but other apps as well," says Daley. "I haven't seen them be agnostic like RIM can afford to be -- and after all, the interoperability idea is not exactly in Microsoft's DNA."

A Deep Well Hectus, whose company uses a Montreal-based company called Pensera to provide specialized applications, disagrees.

"In terms of application development we tend to be more on the customized side," he says, "and I think the one thing Microsoft has done really well is the direct integration with Exchange. That's a great step in the right direction, and unfortunately it's bad news for RIM and for Good in the long run. In the short term the Microsoft platform may not do as well, but it's like everything else: in the long run they will figure it out and get better and better."

One thing Balsillie can count on is the deep well of trust that RIM has built up in mobile email -- not to mention a customer base that still dwarfs its nearest competitors. As law firms, oilfield service companies, and other industries start rolling out new applications to their workers, and integrating their office PBXs with wireless phone systems, RIM has a head start it would be wise not to squander.

"Microsoft is still way behind RIM in my opinion," concludes Pate. "That doesn't mean they won't catch up -- Blackberry needs to be cognizant of them. But Microsoft will have to do some heavy marketing to get companies like ours to switch."

— Richard Martin, Senior Editor, Unstrung

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