Palm Offers Subscription Model

Attempting to change the way enterprises purchase and manage smartphones, mobile-services startup Movero Technology Inc. and Palm Inc. said today they are collaborating on a subscription model aimed at small and medium-sized businesses (SMBs).

For between $20 and $40 per device per month, a company can lease a Palm Treo plus a bundle of Movero services that includes change-of-service requests, lost or stolen device replacement, erasure of corporate data on lost devices, and so on. The rental model, says Movero CEO Bruce Friedman, is designed to eliminate the primary barriers to companies' adoption of mobile email: high costs, poor carrier service, and downtime associated with lost devices.

"This gives us, and Palm, the ability to penetrate the enterprise and SMB market much more deeply," says Friedman.

Founded in Austin, Texas, in 2003, Movero helps companies manage mobile devices over their lifespans, from procurement, to billing, to support and upgrades. Offering its services as a brandable product via service providers, system integrators, and the like, Movero had $6 million in revenues in 2005 and about double that figure last year, says Friedman. The Palm hook-up, known as "Business Essentials for Mobility," is its first foray into a bundled device-plus-service offering. (See Going Mobile? Get Help .)

Essentially, Movero will own the device and the corporate customer will rent it on a 12-month basis. A $300 Treo (the 680, 700, and 750 models are available under this plan) rents for $29.99 with the basic package of Movero service and support; the minimum number of users is 50. Customers can upgrade or keep the same device at the end of the rental period. Friedman compares the product to a cable set-top box: you rent the device and along with it comes an array of services.

At its warehouse in Texas, Movero keeps a supply of Treos on hand for quick delivery to subscribers.

"When you lose a device, that's usually the key moment when you decide to shop for a new device," observes Friedman. "In an enterprise, you become captive to the replacement policies of the carrier, usually around seven to 10 days. If you're an attorney, you can't be without your smartphone for a week, particularly if you're using it to get your email."

Along with the assurance of next-day replacement, companies avoid the upfront capital costs of purchasing devices and the time and tedium of manually processing change-of-service requests through the carrier. (The Movero-Palm package is available for all U.S. carriers.)

Most importantly, says Friedman, the subscription model "abstracts away the customer from the carrier contract, so that they can upgrade their technology at regular intervals."

For Palm, there's no loss of upfront revenue because the device maker is still pre-selling the Treos to the carrier; Movero then works out the rental terms with each carrier. The deal represents another avenue into the enterprise market that Palm has long targeted, says Joe Fabris, Palm's director of wireless solutions.

"What we're looking at, is this will move more Treos into the organization, because it gets rid of that capital cost, and you can do exciting things with the turnover of smartphones," says Fabris. "If you're an IT manager, you look at this and say this is great, it's a manageable cost, it's budgeted, you know what you're going to pay for the life of the devices, and you can upgrade to different models over the course of the program."

The bundle has attracted only a handful of enterprise customers to date, says Friedman, but with the formal launch today he expects rapid uptake in the coming months.

"We've got companies with 50 devices right up into the 15,000 to 16,000 range," he says. "This changes the game for enterprise smartphone procurement."

— Richard Martin, Senior Editor, Unstrung

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