“No one ever got fired for buying IBM.”
It’s a saying that has been floating around the business world for years. It highlights both the complications technology shoppers face as well as the challenges of selling such technology. And those going up against IBM Corp. and other technology giants understand its significance.
The saying “is a combination of the fact that we’re a very stable company … and our level of expertise in the area,” said Norm Korey, vice president of wireless solutions for IBM. “We can tap into resources that most people can’t.”
IBM is one of several major technology firms now using its vast resources to target wireless. The emergence of these business titans has forced the rest of the wireless enterprise industry-those startups and wireless-specific firms that have been working to develop the market-to react. And some are not expected to survive the resulting shakeout.
“We have to be careful how we pursue those larger enterprise deals,” said Mark Springfield, senior product marketing manager with wireless enterprise startup Xora Inc.
The company sells a software platform called EnterpriseOne that extends business applications from Siebel Systems Inc., PeopleSoft Inc., SAP and others out to mobile devices. But Xora has found more success with its GPS TimeTrack product, which traces employees’ work schedules. Xora, founded in 1999, counts 50 employees. In comparison, IBM’s Korey estimates that close to 10,000 IBM employees in some way contribute to the company’s wireless business.
Xora’s Springfield said there are innumerable challenges in competing against behemoths like IBM, Oracle Corp., Microsoft Corp. and others, and sometimes the greatest task is simply getting noticed. Once, Springfield said, Xora received a request for information from a potential customer that basically stopped the company in its tracks-the request itself included more than 100 pages of questions. To fill out the RFI would have taken Xora weeks and wouldn’t have assured it the win. Springfield guesses that the purpose of the RFI may have been to slim down the field to only those companies big enough to complete it.
“There’s no doubt that the IBMs, Siebels, Oracles and Microsofts of the world are certainly going to have a stake in this market,” said Stephen Drake, program manager for the mobile infrastructure software division of research and consulting firm IDC. “There’s no doubt these players are going to have a large effect on the market.”
Growing out of the boom of the 1990s, the wireless enterprise market rose to serve the perceived needs of mobile workers. Dozens of startups hoped to use wireless to give traveling businesspeople and mobile workers access to corporate information. Analysts and industry watchers, flush with the triumphant roar of wireless, predicted a wireless enterprise market worth billions.
But economic stagnation quickly tempered the hopes of a wireless revolution in business, and most corporations cinched up their purse strings. Numerous wireless firms succumbed to the famine. Others holed up in industry niches like fleet management or health care in an effort to wait out the storm.
Today, a handful of veteran wireless firms remain, while a range of other players have begun to test the wireless enterprise waters. Wireless carriers have targeted business users as a choice market, while numerous enterprise software vendors hope to boost sales with wireless components to their offerings. For instance, Oracle added wireless elements to its 9i Application Server, and also sells a 9iLite product for mobile devices. Microsoft last year folded its Mobile Information Server middleware platform directly into its Exchange server, adding wireless components to one of its flagship enterprise products. And IBM offers its WebSphere Everyplace Access middleware platform, which the company said extends corporate information to wireless devices. IBM also sells associated servers, routers and devices to go along with the middleware platform.
“The role that IBM plays here is to act as a single point of contact,” said IBM’s Korey, adding that IBM’s true calling is that of systems integrator, working to connect various enterprise products.
And such a strategy may well work to dominate the market.
“As large enterprise vendors such as IBM, BEA Systems Inc. and Oracle build integrated application environments, they are simultaneously overcoming many of the mobile-computing challenges that pure-play mobile-computing vendors address,” wrote research and consulting firm Yankee Group in a recent report. “In the final analysis, IBM is the best equipped to implement a comprehensive mobile-computing solution, while Microsoft and Oracle are well positioned.”
However, Yankee Group tempered its view of the market with a nod to the competitive potential of the smaller companies, pure-plays that deal only with wireless.
“If Aether, Everypath, JP Mobile or Broadbeam survive two more years, they can return from their niches to provide a broader cross-industry platform,” the firm wrote.
“I’m of the school of thought that some of the best of those smaller players will be able to compete,” said IDC’s Drake. “What we’re seeing is that the strengths of the smaller players are bubbling to the top, and they will be able to compete against the biggest ones.”
Indeed, one medium-sized company has managed to do just that. According to IDC’s 2002 survey of the wireless enterprise market, IBM, Oracle, Microsoft and the other giants did not command the top spot in terms of revenues. A company called iAnywhere Solutions Inc. did.
iAnywhere sells several complementary wireless enterprise products, including its M-Business Server for delivering Web-based content to mobile devices, its Manage Anywhere Studio for software management on mobile devices, and its Pylon platform for wireless e-mail. The company counts 340 employees, making it several times larger than many wireless enterprise startups. It also has one major ace up its sleeve-its parent company is enterprise software giant Sybase Inc. iAnywhere’s main product is Sybase’s SQL Anywhere Studio database server.
“Our parent company … is a larger company with global resources that gives us a lot of backing,” said Brian Vink, iAnywhere’s vice president.
Smaller wireless enterprise players have adopted a variety of strategies to counter the competition from big companies.
Founded in 1999, Orsus Solutions Inc. counts 70 employees and has raised $70 million in funding. The company sells its Speedwise software product, which extends applications from Siebel, Oracle and others to wireless devices. The company uses sales of Speedwise to promote its Orsus Mobile Framework, which is a set of tools and a platform to develop and deploy mobile applications.
Even though companies like Oracle and Siebel already offer wireless extensions to their products, Orsus’ Ben Reich said the company sees little competition from bigger players. He said Orsus’ products work four to five times faster than extensions from other companies.
Further, Reich said Orsus bypasses potential competition from bigger players by teaming with them-beating them by joining them. Systems integrators like Siemens and Fujitsu resell Orsus’ products, which means Orsus doesn’t have to directly face down its bigger competitors. For example, Orsus scored General Electric Co. as a customer through a resale agreement with systems integrator TCS.
“Usually it’s our partners that are doing the competing,” said Reich, Orsus’ chief operating officer. “It’s not a David-and-Goliath story anymore.”
Wireless middleware company Defywire Inc. takes a different approach. With just 30 employees and $4.5 million in its latest round of funding, Defywire hopes to score customers through its holistic approach to the market.
“True middleware provides you a highway for all your sources of information,” said Jill Stelfox, the company’s chief executive officer. “Other solutions pr
ovide you with one exit ramp on that highway.”
Defywire’s Mobility Suite allows businesses to push enterprise applications out to wireless devices. The company’s PicoTop Mail product allows wireless users to access their corporate e-mail. Stelfox said some of Defywire’s customers have raised concerns over the company’s long-term viability-again raising the question of stability-but she said the company can allay those fears.
“The features and benefits of our products really outweigh those concerns,” she said.
In Xora’s case, Springfield said the company has some specific advantages over bigger players precisely due to its small size. The company is much more nimble and can more quickly respond to customer concerns. And, more importantly, he said smaller companies can dig into markets that might not sustain a bigger company.
“In the small and medium-sized business market, we very rarely find ourselves nose to nose with competitors. We’re able to go after markets where the margins are smaller,” Springfield said. “It would just look like small potatoes to an IBM.”
Although it may be true that no one has ever been fired for buying IBM, Springfield said that’s not a concern in smaller markets “because IBM’s not here.”
