Poised for Takeoff?
Speaking to investors this morning in a conference call just two days before what could be a climactic hearing in the legal dispute between Blackberry maker BlackBerry and NTP Software, Good VP of worldwide sales and marketing Terry Austin foresaw a confluence of forces broadening the enterprise market for handheld messaging, including a raft of new devices from Palm Inc., Motorola Inc. (NYSE: MOT), and HP Inc. (NYSE: HPQ), plus the entry into the market of the 800-pound gorilla: Microsoft Corp. (Nasdaq: MSFT). (See RIM Ruling Foretells Changes.)
In a related development, the U.S. Patent and Trademark Office on Wednesday issued a final rejection of one of the mobile email patents at issue in the RIM-NTP dispute. This marks the first official invalidation of an NTP patent by the Patent Office, which has issued preliminary rulings rejecting all five of the NTP patents. (See NTP Patent Rejected.)
Meanwhile, U.S. District Judge James R. Spencer, presiding over the patent dispute between RIM and NTP, rejected late Tuesday a request by the U.S. Justice Department to hold a separate hearing on exempting government users from any potential shutdown of the Blackberry service.
RIM's legal dispute, Austin stated, has only hastened trends that were already developing for competitors like Good: "It's accelerated inquiries, it's accelerated downloads of [Good's] server software and the installation of the server software, it's accelerated migration [from RIM to alternative solutions]. The pace of all those things has picked up dramatically."
Since December, Austin claims, some 1,200 enterprises have downloaded the company's GoodLink server software and more than 250 have installed it. Making the switchover from Blackberry, however, could be an expensive move for many enterprises: according to a report from analysis firm J. Gold Associates, the one-time cost to businesses of switching from RIM to an alternative provider will be $845 per user.
Good Technology is counting on adding new subscribers, not just luring anxious former Blackberry users. Calling the enterprise push-email market "thinly penetrated," he cited an oft-quoted figure from Datamonitor : Of the approximately 650 million corporate email in-boxes, only about 6 million have been mobilized -- pointing toward huge growth over the next year or two as enterprises get handheld email devices into the hands of more and more employees.
"Messaging is the first critical mobile application for enterprise customers," says Austin, "but the really profound trend is mobile computing, as more and more computing tasks and data access migrates or coexists with the laptop and the handheld device, and an increasing number of these apps are enabled for handhelds."
Stuck in the $300-$500 range for the last few years, the price of handhelds is set to decrease, according to Austin, as software standardizes, manufacturers' gross margins shrink, and more devices -- including the Motorola Q, new versions of the Palm Treo, and new HP handhelds -- reach the market in the next 12 months. "We'll see a significant lowering of the price of handsets this calendar year," Austin contends.
That broadening of choice is being largely fueled by a company that Austin sees as an unlikely ally: Microsoft, which has released its own version of push email as a free upgrade to Windows Mobile 5.0 operating system. (See Microsoft Gets Pushy.)
The Microsoft initiative seems like an obvious competitor to Good, but Austin sees Microsoft as "unlocking demand" in the enterprise market for wireless email and other mobile applications.
"The introduction of Windows Mobile 5 is a huge benefit to us -- it will lower the price point and we'll see scale manufacturers coming into the market in a major way," Austin explained. The release of the Palm 700, for instance, running Windows Mobile 5.0, "is very appealing for a significant number of enterprises who resist buying anything other than a Microsoft OS. It gives us a nice alternative to those accounts."
— Richard Martin, Senior Editor, Unstrung