Elata Makes Iberian Inroads
This deal follows its win at Hutchison 3G UK Ltd., which was announced earlier this year (see Hutchison Plugs Its Java Hole). Amena has deployed elata's Senses platform throughout its network in order to launch targeted, personalized services before the end of 2003. With more than 6 million subscribers (about 19 percent market share), Amena is the number-three operator in Spain, behind incumbent Telefónica Móviles SA, which has about 18 million subscribers, and Vodafone Spain, which has 8.2 million customers. However, as Amena's forthcoming campaign has not been officially announced, the operator is not releasing any more details about the range of services or specific handsets that will be involved at launch. Elata, currently in 15th place in Unstrung's Top 25 Startups, says its platform automates the process of targeting specific services to customers depending on their customer profile, and it allows the operator's back-end system to "recognize" a device as it connects to the network (see Elata Recognizes Devices). This means that as services are requested, they are delivered to the customer's device depending on what the system knows about the capabilities of that device -- for instance, whether it is Java- or MMS-enabled, which operating system it uses, its screen resolution, and so on. The Amena deal is one of the two at-the-time-unnamed deals mentioned by elata back in October (see Elata Lines Up Further Deals). We wondered what it might be worth to the middleware startup. "This is great news for us, and is worth a significant amount, though we can't release a figure," CEO Gavin Freed tells Unstrung. "But this is another great entry point for us to the carrier community, and is particularly pleasing because it shows that carriers are starting to understand what this platform can achieve. The carriers are very focused on generating revenue from services on their existing networks, and they need a way to deliver multiple services to different device types." Freed says elata was up against its main competitors -- 4thpass Inc., now owned by Motorola Inc. (NYSE: MOT), and Mobilitec Inc. -- in the Amena tender process. Unfortunately, Freed can't name any other carriers that elata is involved with in Europe (or Asia -- see Elata Opens Singapore Office), but he expects to announce more operator deployments throughout 2003. He also mentions that a certain "well-known name from the carrier community" is due to join the company, but he's keeping mum on the moniker. Whoever he is, "He should be on-board in February," adds Freed. So is elata hitting an operator sweet spot, as it claims? Well, yes, but according to Ovum Ltd. senior analyst Jessica Figueras, elata's system does not focus on the current primary concern of mobile operators -- content sourcing. "Elata has done a great job in tying in with systems that help the operators offer customers services based on their profile," says Figueras. "Others in the Java download sector, such as 4thPass, Mobilitec, and even Nokia Corp. [NYSE: NOK] and Openwave Systems Inc. [Nasdaq: OPWV], deliver content to the device but do not connect to the personalization systems." Figueras adds: "[Operators] are really focused on how to connect to third-party content providers. It's not too difficult for the operators to customize a connection to a handful of content sources, but that just doesn't work when you want to source content from thousands of different companies. The operators need a system that will automate that connection process so they can manage and track the content running across their networks, and that's not what elata primarily focuses on. Its system mainly helps to deliver that content to the customer, and it's good at doing that." Elata, naturally, believes it is also strong in third party content management. "[Our system] links in content management systems and content providers or aggregators, and has APIs [application programming interfaces] and rich management interfaces for both the content provider and mobile operator. It is actually a key part of the system," says Matt Hooper, elata's VP for marketing and alliances. "This manages the staging, categorization and publishing of third party content, and the ability to automate pricing and revenue share usage of applications between operators and content providers." Given this level of functionality, Freed is more than confident that elata is delivering a key carrier requirement, and he boasts that it recently broadened its delivery capabilities by expanding its Senses product to support C-based games in addition to Java. It has partnered with Swedish developer Synergenix to integrate its Morphun C-language gaming engine, which ships in Sony Ericsson Mobile Communications' T300 device. Synergenix claims Morphun provides greater performance and a richer color gaming experience than J2ME applications can deliver. He is also bullish that 2003 will be the year that sees sophisticated content delivery and the proper marketing of such services really take off: "2002 has been the year of Java download, and three months ago I wasn't as optimistic about the state of the market as I am now," says Freed. "But developments like Vodafone Group plc (NYSE: VOD) launching its Live! service [see Vodafone Goes Live!], the launch of the SPV [see Orange Uncovers Its SPV and SPVs Go AWOL], and now the Amena deal are very encouraging, as well as the increase in attractive devices. Before, the window for the mobile user, the screen, was a grubby, black and white one. Now it's a color LCD window, and that helps to create demand. It's devices that drive this market." "I am very optimistic for 2003," he gushes. "We have visible work for the first half of the year, and I believe more and more operators will see the benefit of a system that ties in with their CRM and content platforms. And being based in Europe gives us a great advantage over many of our competitors, as we are right on the doorstep to work with so many of the large mobile operator groups. Having an office in Singapore is also paying dividends for our prospects in Asia."
Nevertheless, Freed adds, there are no plans to set up shop in the U.S. "We don't want to bite off more than we can chew." If a growth surge occurs in 2003, will elata need more funding? It has, to date, raised €10 million ($10.25 million at current exchange rates) from three venture capitalists: Royal Bank Ventures, nCoTec Ventures, and New Media Spark PLC. Freed weighs in: "We have had good interest from the VC community to date, and if the time became right, then yes, we would go for another round of funding." — Ray Le Maistre, European Editor, Unstrung