Carriers: Helpers or Hurdles?
For the solutions that you guys are working on, to what degree is it important that you work with carriers? Do any of you have products that you need the cooperation of the carrieras with BREW applications, for examplewhere they're only delivered through carriers?
GUR: We are actually working with a few carriers and talking to quite a few more. We've done that both for our existing products as well as the enterprise solutions that we have been building. Now, the carriers' position and capabilities are undecided as yet. And they also vary from carrier to carrier, from market to market. Some carriers see themselves ultimately becoming dumb pipes just like ISPs. Most of them want to have some kind of control over those traffic-producing applications.
However, since there are such a variety of applications, especially in the solutions marketplace, they simply can't get a grasp of the market, and ultimately if they do not provide the development services, then sooner or later they find themselves at a loss.
So sometimes they just become a player interested in helping other playerssort of doing some matchmaking between the solution and the customers. Sometimes they actually damage the process because they want to be involved but they don't understand enough about it.
DevX: They want a piece of the action.
GUR: Yes, they want a piece of the action, but the action is too complex for them to handle, and they can't really build internal divisions that would understand all the different IT systems. It's just like it was with the Internet providers: Seven, eight years ago, all of them wanted to be a portal. All of them wanted to supply all the services. Most of them wanted to be involved in enterprise use as well as consumer use of the Internet. Now most of them have backed out of that.
With business solutions I think they can play a much more important role. There, since they hold the relationships with the customers, they already have a billing relationship and a sales and marketing relationship with them, it makes sense for them to be involved in those capacities as channels, as resellers, as billing agents and so forth.
What's happened over the last couple of years is that some carriers have had limited success, especially with games, and whether it's enterprise applications or games, it's all crammed into one category. They call this content. And they've built a content division that is in charge of promoting these products. The original or early success was mostly with this kind of entertainment and games. These content divisions are very geared with billing and promoting games, and the same people, you just can't expect them to sell serious business-type applications. So this is impeding the progress of the market.
DevX: And these are horizontal products that are in high volume, and the more complex the sale becomes and the more particular the segments are, the more difficult it becomes.
SENICK: I concur. I mean, the carriers have a stronghold on the distribution channel, especially here in the U.S. But their primary focus is adding new lines or selling lines, and anything that is remotely complex, that takes up more engineering resources or any customization on their behalf really becomes too complex.
When the carriers start to evolve their process to grow revenues with their existing customers vs. new additions, I think that's when we, as a software company, will definitely begin to see more acceptance from the carriers.
Expanding the Customers, Not the Services
DevX: Do you find that having to work through carriers limits your ability to expand your product line into other types of corporate desktop applications? Do you get pigeonholed working through the carrier model?
SENICK: No. I don't know if we get pigeonholed. We try to keep an open distribution model. The market's not yet developed enough for that to be happening.
I think we're still on that growth curve. I think this year and next year is where we'll see selected carriers around the world begin to adopt our software. A lot of it is just dependent upon the devices. Our application is pretty large, and requires a SmartPhone for processing as well as memory. As that horizontal push for SmartPhones begins to grow, we will see the carriers gain more interest when they see that customers have the devices to offer our software on.
DevX: Would you say that the companyyour company, Craigis expending more energy in trying to expand your existing product line on more devices as opposed to trying to develop new applications?
SENICK: Yes. At this time we are focusing on getting on more devices vs. more applications.
DevX: Glenn, you're in the same kind of space with file and printing
BACHMANN: Yes, we are in the same space, and I think we're in a mix. We aggressively seek new ways to get our software in the hands of customers with device licenses, getting our products bundled with other hardware, other software, the handhelds themselves, and things of that nature. At the same time, we're always looking for extensions to our existing applications as well as new applications, which makes sense for the customer and the carrier and the handheld manufacturer.
Going back to your earlier question: 'Is the carrier an impediment for us or a value to us?' At this point the real tipping point, for us in file and print services, is customers who have in their hands a device that's capable of supporting things like documents and e-mail with attachments and editing and a keyboard. Those things are just coming to market in terms of the phone space. They're already there in general PDAs.
But once those devices are in customers' hands and they have great applications like Craig's Quick Office, the need for file and print services becomes obvious. For us to raise our arms and scream and make a lot of noise, 'everybody needs file and printing,' the immediate question back is, 'What am I printing?' And the inevitable answer back to your average handheld user is going to be documents, PowerPoints, spreadsheets, e-mail.
I think the carriers can play an important role in terms of making the applications visiblemaking sure that their customers are aware that these capabilities are there. But it's really just getting the customers used to using their handheld for more than a phone, their calendar, and a little bit of e-mail. Once they start making more robust use of all the capabilities that are on the PC, then we really see a big success story on our side.
DevX: Then they start looking around for more stuff once they begin to realize the possibilities.
BACHMANN: And that, of course triggers: 'OK, now that they're doing that, what else can provide to them?' We've reached a certain point in the maturity of our applications where it's not that existing customers need our applications to be more functional. It's that there needs to be a base usage of them in the first place.
DevX: That's where we're starting to see the volumes take off for this year and next year. So it truly is at the uptick of the growth curve. We're excited about the marketplace.
BACHMANN: As are we.
DevX: That's good because I hear that the games guys are all talking about having had a good year. So it's nice to see it's shifting into other areas of software.