March 23, 2006



Posted: 07.01.05

RIM Begins to Make Enterprise Application Progress

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By Tony Rizzo

Back in mid 2003, the management team at Research In Motion (RIM) started making noise about a new goal—5 million subscribers. Though the timeframe for achieving this was vague (a general sense of things was 2006-2007), back then it seemed a rather lofty prediction. So, how’s RIM doing? By now we’ve all heard the company recently surpassed the 3 million mark. Though most of the other players in the mobile office space would love to have even a fraction of those 3 million subscribers, what is more interesting is that subscriptions to mobile e-mail aren’t quite as important as what appears to be the next stage of evolution for RIM’s BlackBerry devices—a standardized hardware platform for delivering many kinds of custom mobile applications.

Many of RIM’s competitors tout software-only solutions that support a myriad of mobile devices. This is all well and good when the individual mobile office user has the choice, but as enterprises begin to get their arms around just how many BlackBerry devices are now sitting within the enterprise, they are beginning to see opportunities not to expand choice but rather to limit it, by standardizing on a well-known, well-understood device. IT departments like standardization; it makes support, maintenance and deployment much easier. Ask SAP why it has done so for its large-scale sales force and the answer will be, “All of the above.”

RIM, meanwhile, would love nothing better than to become an entrenched device within the enterprise. But simply serving as a mobile e-mail/mobile office tool isn’t going to be enough to get it there. The secret is to broaden the scope of what a BlackBerry device can provide to the mobile user, and that comes down to the ability to deliver custom applications. RIM has spent a great deal of time in 2005 working to strengthen its applications capabilities—much more than it had in the past (past efforts amount to almost nothing). Why the push now?

Contrary to what a lot of onlookers used to say about RIM becoming a pure software player, the truth is that RIM is anything but a pure software player. Those BlackBerrys deliver a huge chunk of RIM’s revenue every quarter, and for RIM to continue to earn that revenue it has to establish a way to create sustainable upgrade cycles for hardware. RIM is hard at work on a variety of new device designs, and some of them are going to raise the “coolness” bar a good bit.

But the cool factor alone isn’t going to cut it. What the company has to do is get enterprises to deliver custom applications so there is a dual-pronged reason for IT departments to declare BlackBerry the standard. Hence the concerted push to get enterprises to build applications. Mobile office services plus applications plus large numbers of devices equals entrenchment. Entrenchment equals insurance on hardware upgrade cycles.

Where does this leave the Mobile Enterprise reader? For the astute reader, in a position to ensure that those upgrade cycles are contracted for ahead of time and at prices that should end up favorably for the enterprise longer term. I’m firmly in the camp that advocates taking a very proactive stance here—cost savings based on standardization will accelerate as more and more enterprise users become mobile and as enterprises push out more applications to these users. As both a hardware and software company, RIM is in a good spot. With a bit of homework, the enterprise can turn that to its advantage.
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