While a handful of mobile e-mail service providers seem most at ease in the courtroom, Fabrizio Capobianco is comfortable on the tightrope.
Capobianco is chief executive officer of Funambol Inc., a Redwood City, Calif.-based software developer that offers a mobile push e-mail service based on open-source technology. The company’s name—a combination of two Latin words meaning “rope” and “walking”—refers to the fine line open-source firms face in the marketplace.
On one hand, the technology is freely available for developers and consumers to use and modify as long as they make those changes public. “On the other hand,” explained Capobianco, “you have to make money.”
Funambol is scrambling to gain footing on the mobile e-mail playground, which continues to be dominated by Research In Motion Ltd., but is crowded with smaller players including Good Technology Inc., Seven Networks Inc., Visto Corp. and Nokia Corp.’s Intellisync. The 5-year-old company, which has Italian roots, offers an application server based on SyncML, an Open Mobile Alliance standard supported by most new handsets.
Like most of its competitors, Funambol is looking to expand the mobile e-mail user demographic beyond the high-powered executive to lower-end business users and consumers. Its architecture is interoperable with Microsoft Corp.’s Exchange Server, IBM Lotus Notes and other popular e-mail platforms, and the company is well-positioned to cash in if mobile e-mail finally gets legs in the mass market, according to Entiva Group Inc.
“With 75 percent of the handsets on the market supporting SyncML, it is poised to become the fastest-growing open source middleware platform,” the firm wrote earlier this year in a research note. “In the future, as more and more mobile SyncML devices are made available, the company will be in a prime position to grab a good deal of market share, without having to require any changes from vendors or users.”
SyncML is openly available on the Internet under a concept called “copyleft”—a play on the word “copyright”—that forces developers who bundle the offering or modify the source to make all changes open source. Funambol generates revenue by charging licensing fees to users who pay to keep such modifications secret.
Funambol demonstrated its offering at the 3GSM World Congress in Barcelona earlier this year, and the service has been deployed by ePLDT, the Philippines’ largest operator. The company has yet to land a deal with a U.S. operator.
“We haven’t been able to crack U.S. carriers yet,” said Capobianco. “They’ve never been fast movers.”
Perhaps as important as Funambol’s open-source technology, though, is the fact that it’s managed to stay off the litigation carousel—so far. Visto has targeted rivals RIM, Microsoft and Good with patent-infringement lawsuits, and RIM—which earlier this year shelled out $612 million to settle a patent suit from NTP Inc.—has filed a counter-claim.
In fact, the litigation craze is generally thought to boost sales from wireless e-mail service providers who manage to stay out of the courtroom. BlackBerry sales slid prior to RIM’s settlement with NTP as potential users feared an injunction would kill service.
But Funambol’s key selling point may be an Achilles’ heel if patent lawyers from rival developers target the company, warned Colin Bush, a research analyst with Ferris Research.
“That’s one of the risks people often talk about with open standards,” Bush said. “Because the source is (accessible), it’s much easier to research for patent infringement.”
The company markets its service to enterprises as well as to operators looking offer a carrier-branded mobile e-mail solution. But competition is forcing service providers to offer bargain-basement prices—witness RIM’s recent move to offer a free copy of its BlackBerry server to single users—and mass-market handsets are quickly becoming more e-mail friendly. Capobianco believes open-source technology will allow Funambol to stay competitive as mobile e-mail gains traction and razor-thin margins force his competitors and their proprietary solutions out of the market entirely.
“I really believe you’re going to have e-mail on every device,” said Capobianco, claiming that mobile e-mail will be commoditized. “When there is a commodity play, open standards wins most of the time.”
