The Ovum View (Part II): Will Microsoft take it all?

Ovum analyst Jessica Figueras continues her review of the battle for the mobile email market...

Another question posed by convergence is whether there are any opportunities for synergy between wireless email for consumers and corporate users. At present, the two seem to be worlds apart: on one side, a pure hosted model for consumers offered by Comverse, Mobeon and Openwave, on the other, a semi-hosted model for corporates offered by Lotus, Microsoft and RIM. On this basis, it is not a particularly viable option for operators to offer a common wireless email platform from which to serve both communities - after all, consumers are unlikely to start buying their own mail servers in the near future. Given these differences, it may not sound as if the market is ripe for convergence any time soon. You might be forgiven for thinking the operators would do better to forget all about convergence and steer clear of any opportunities offered to them by dangerous adventurers such as Microsoft. But here we must broaden our focus outside wireless email because this is only one part of a much more important endgame. That endgame is ownership of the underlying wireless platform - a software offering that can wireless-enable any application, for any device, on any network. In the context of the platform battle, it will soon become obvious that wireless email is barely more than a side issue. Once we start looking beyond wireless email to platforms it is clear that not all of today's vendors can deliver - or even compete. IBM/Lotus, Microsoft and Openwave are clear contenders but the way is less certain for specialists such as Mobeon and RIM which have open platforms but little market clout. They will also have to compete with platform heavyweights such as BEA and Oracle, wireless middleware specialists such as 724 Solutions, Aether Systems and Brience plus in all likelihood wireless infrastructure providers such as Ericsson and Nokia. While the divide between operator-focused and enterprise-focused vendors still exists to various degrees amongst this group, during the next few years it will start to blur as genuine convergence of the underlying platform starts to take place. For instance, Openwave has been extending its offering to create a coherent platform - Services OS - which provides infrastructure services that could, in theory, be extended to a wide range of applications - not just consumer applications. Although Openwave does not target enterprise applications today, it has recognised the future importance of this market with its strategic investment in (and right to buy) Brience, the enterprise wireless middleware vendor. Arguably, Brience partnered with Openwave in order to get an opening into the operator market (more specifically, ASPs and portal operators), but as economic conditions improve, the two are likely to step up their joint focus on enterprises. Together, the two companies have a powerhouse of a platform, with strengths in both operator and enterprise fields, hosted and non-hosted services. In contrast to the relatively channel-specific platform provided by Lotus, Microsoft and Openwave operate (or want to operate) in a truly multi-channel environment, where the same underlying platform can be adapted for any use. In Microsoft's case, this is the .NET platform (comprising servers, operating systems and development tools); in Lotus', it's the IBM WebSphere platform (comprising servers, database, development tools and management). So it is unsurprising that both companies have a very different type of wireless platform from Openwave. For both Lotus and Microsoft, the software that enables wireless access to their email platforms (and other enterprise applications) is little more than a thin logical layer that relies heavily on the functionality provided by the platform back at the enterprise: that is, the platform that also underpins fixed applications. But there are few reasons why this should not be an operator platform as well as an enterprise platform. This goal is exactly what Microsoft has in mind. The company is already using its early wireless email offerings as a springboard to get into the operator community and open platform discussions. For example, Microsoft's .NET My Services initiative (previously known as Hailstorm) would allow operators to create new hosted customer services based on a set of Microsoft-hosted web services. Operators that adopt the initiative could feasibly use it to create their own wireless platforms, allowing easy wireless access for both consumer and corporate email users, as well as for a whole raft of other consumer and corporate applications. Whether this scenario will take place depends heavily on Microsoft's ability to do something more specific for the needs of the operator community. Operators may not be keen on becoming Microsoft cheerleaders when they could be the customers of more compliant suppliers such as Openwave. The sheer number of potential players in the market for platform ownership makes consolidation inevitable. Most of the smaller specialists will be swallowed up by platform owners looking to plug gaps in their offerings. Standardisation will also play an important part: as wireless standards gradually converge with those in the fixed world, there will be less need for dedicated wireless infrastructure. The main process of consolidation will be mostly complete by 2004. But until then, today's wireless email competitors still have everything to play for. To ensure survival, competitors need to be sure about where they stand in the platform battle. It is unlikely that small vendors with standalone wireless email offerings will be able to survive independently, unless they can carve out niche specialist markets for themselves. But potential platform owners also have a major task on their hands. They will need to invest significantly in building complete, open and flexible platforms, which can handle the wide range of applications that will be required over the next five years. To do this, they need to balance the relative merits of partnership, in-house development or acquisition. Building strong strategic partnerships is the key task for all players. In the short term, the wireless operator community is the most important focus, as these players form the gateway to the market. But as today's technology offerings mature into mainstream service offerings the enterprise market will also become a viable target as corporates start to take advantage of stable standards and cheaper prices. Vendors that wish to survive convergence and consolidation need to partner wisely, to enable them to target both constituencies. This research is taken from the HostedServices@Ovum Advisory Service.
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