Push e-mail: Seven can take on Microsoft, and BlackBerry
He who woos the operators wins the market says Paul Hedman.
"It's an interesting time for mobile e-mail," says Paul Hedman - and he is in an interesting place. He was chief executive of Finnish mobile e-mail company Smartner, when it was bought by its US rival, Seven, earlier this year.
Smartner's product plugs a gap in Seven's line - so Seven put Hedman in charge of its Europe, Middle East and Africa operations, and charged him with getting Smartner into more users' hands as the (projected) mobile e-mail boom begins.
But what if it's all hype?
But while BlackBerrys are growing fast, the rest of the mobile email boom is still only theoretical. What if it is all hype, and most users will get by with occasionally synchronising their e-mails by hand (or timer), using a product like Microsoft's ActiveSync?
"ActiveSync for mobile users has never picked up really, because of the user experience. That's the key thing," says Hedman. "More and more enterprise customers and operators are discovering the advantage of push e-mail. It's about user experience."
There is a big uptake is real push, says Hedman, and his aim is to get the Smartner mobile email software into more operators' toolbags. "We want to reach eighty operators by year end," he says (currently 55 operators offer Smartner). Then it's a matter of getting those operators' customers to start using the software - one step towards that being Nokia's upcoming announcement of free push email.
The growth of mobile email is all down to the success of RIM, Hedman admits: "RIM has done a great job with BlackBerry, he said. "They have created a market demand."
RIM has more than three million BlackBerry users, and its rate of growth is showing no sign of slowing down. Seven's 700,000 users makes it a strong number two, though, and Hedman reckons it can grow much faster than RIM.
RIM still makes 75 percent of its revenue on hardware, says Hedman. "RIM Connect [the programme for RIM software on other handsets] was never a success. Even though you can run RIM software on other phones, the business model is a challenge. RIM can't slaughter the price, because that would damage its market capitalisation."
"We are number one on all other devices," says Hedman. "Give us some success in the consumer market, and we can give RIM competition." Only five million of the world's 650 million enterprise email accounts are mobilised, and a vastly smaller proportion of consumer e-mail accounts are mobile, so RIM has room to grow very fast.
BlackBerry is not in the consumer market, says Hedman: "Our relationship with Yahoo! and Hotmail will have an impact on volume."
BlackBerrys are only a solution for senior executives, and more of a status symbol, says Hedman. "An enterprise BlackBerry customer will not roll it out over the whole company, because it is too expensive. Normally, they have BlackBerrys for senior executives, but the next level of managers, get the Seven solution."
Ironically, the mid-level executives get a better solution, with a good phone included, says Hedman. The big cheeses usually carry a normal phone as well as their BlackBerry.
Operators are behind Seven, he says: they don't want RIM to own it all, so most sell both BlackBerry and Seven.
Who's afraid of Microsoft?
Microsoft's belated announcement of push e-mail for Exchange and Windows Mobile, is another plus, says Hedman: "I'm happy to have Microsoft in the market. The more we speak about push e-mail, the better."
"Microsoft is not a challenge to us," he explains. "Its solution covers a very limited market segment. It needs Microsoft devices now." Nokia has licensed the ActiveSync protocol, he agrees, but this has been delayed, and "there will be limitations to [Nokia's Microsoft-based push solution] whenever it comes, on the security side."
"If Microsoft gets four or five percent of the market, it will have done a great job," says Hedman. "At the moment, we don't see them at all." Microsoft's solution is not even true push, he claims.
The limitations on Microsoft's push solution, and the delay in announcing it, are probably due to internal discussions within Microsoft, he says, where marketing people for the mobile clients don't want the server to link to too many third party clients.
By contrast, Smartner is already available on the Symbian series 60, 80 and 90 smartphones, as well as on the UIQ flavour of Symbian.
So who are the competitors?
If Microsoft and RIM don't signify, who are the competitors? Hedman reckons Intellisync, Extended Systems and Visto are the main ones, and claims not to run into Good Technology much: "Their business model is enterprise-centric rather than operator-centric."
Some of the competition comes in the form of lawsuits or threatened lawsuits, at which Visto is the acknowledged leader in the push e-mail field. "This is the normal way to do business," says Hedman, "It's like NTP and RIM".
Intriguingly, despite reports that Visto is suing Smartner for patent infringement, Hedman says he has had no confirmation of the lawsuit. "It may just be a marketing stunt," he says.
Seven and Smartner, a merger of minds?
Seven's purchase of Smartner has been more of a merger than an acquisition, says Hedman, with Smartner bringing quite distinct features.
While Seven chased the consumer market with e-mails triggered by SMS message from the client (which may be more suitable for consumers who are light e-mail users), Smartner developed true real-time push, aimed at enterprise customers: "We have real push like BlackBerry," says Hedman.
While Smartner focussed on Symbian and the Microsoft Mobile platforms, Seven worked on Palm, iMode and Java variants for phones.
Also, while Smartner did well in Europe, Seven did well in the US and Japan.
The two companies' technology will be merged in the first quarter of 2006, he promises. "There will be one back-end, with a portfolio for operators or for enterprises to build push e-mail services, either under their own brand or with partners like Yahoo! There will be lots of flexibility." The merged back-end will handle real push and SMS push e-mail.