Mobile e-mail is a hotbed of technology - and legal action - with one supplier, Visto, and a patent holder, NTP, suing others. So when we got Daniel Méndez, co-founder and senior vice president of intellectual property at Visto on the phone, we asked him why.
Visto has a reputation for suing other companies in the field. It's sued Microsoft. RIM, Good Technology, and it's also sued Seven. Why is this?
Patent disputes are commonplace in other fields such as the pharmaceutical industry, but the emerging nature of [the mobile e-mail] space gives it visibility. The reason it is in the news, is because mobile e-mail is very pertinent. If there were litigation in an area that didn't matter, you wouldn't hear about it.
The customer base is visible, but so far it is only scratching the surface, reaching one or two percent of the total market. The user base of RIM and Visto adds up to six million, and there will be about 600 million to a billion [mobile e-mail accounts] in a few years. That's why it is in the news.
There's a joke in the mobile e-mail world, that we've been saying this is the year of mobile e-mail - for the last 16 years. It's taken a while to mature and it's not quite there yet. But some of us who were working on this space ten years ago created intellectual property in products that are coming into their own, now.
Visto started about ten years ago. What we set out to do is exactly what we do today, to give people the ability from their smartphone to get e-mail and personal data. We have been selling this for a very long time.
One of the things we did was establish an intellectual property portfolio which was pertinent and prescient to the emerging market.
There must be a big difference between now and ten years ago. How were things then?
Ten years ago, it was a completely different story. There were one or two so-called smartphones, but nothing compared to the hundreds of form factors we have today, and most people did not have the dependency on e-mail we have today.
Some people in the industry realised this would be the wave of future - not maybe, but when. We approached different companies and said they could offer mobile e-mail to their employees, but they had a lack of understanding of the basics that we now take for granted.
How do you see mobile e-mail now? What is the competitive landscape like?
What we have today is a situation very analogous to the early days of PC. RIM's early success will be an albatross. They have put together whole system, and that provides you with a temporary advantage. Because it is a closed system, they can control all the pieces and provide a better user experience to their customers.
People like Visto who concentrate on the software cannot provide the same level of ease of use. In fact, we can provide it, but we cannot guarantee it on all platforms...
As networks mature and new devices appear in their hundreds, the situation changes, and people who concentrate on one aspect of the industry, like Visto, are better poised for success. It's not the existing pie that we care about, but the total available market that is barely tapped into today.
RIM is trying to move away from a closed system, but because so much of their revenue depends on devices it is difficult.
In the same way, Apple had a closed system in the early 1980s, and has difficulty hanging onto market share.
If you're talking about a closed system designed around one application, maybe Wang would be a good comparison?
The Apple comparison is a bit more kind, I'll stick with that one.
Ultimately we're looking at a market that is barely getting started. There are many form factors; there is no one size that fits all.
RIM will become one more player, among hundreds of different choices. They have expanded to provide software for four or five devices - but Visto provides software for hundreds of devices.
The other mobile e-mail vendors concentrate on software. Is there more competition there?
Over the last few years, the number of viable competitors has contracted. There were dozens of people a few years ago, but now just a handful remain in this space: RIM, Visto, Good and Seven. I would take our chances over anybody in this space.
What about the new arrival - Microsoft (which arrived last year)?
Microsoft is focused on providing software to their Windows mobile devices. They pay lipservice to other devices, but the proof of the pudding will be in the eating.
When Microsoft really hates you they say they will support you and do a poor job of it. They are trying to push Windows Mobile and push Exchange.
By comparison, Visto is completely source agnostic. It doesn't matter whether you have Domino or Exchange - Domino is a very important part of market.
Microsoft will care more about Windows Mobile, and yet Symbian is a very important part of the market. We work with Java devices, also a growing segment. We are very different from Microsoft.
But Microsoft has a big selling point. For companies that have the latest version of Exchange, and Windows Mobile devices, they can do mobile e-mail for free
Things are never "free." Although at first glance, MS is giving for free, ends up costing more and I think buyers will see through that. Total cost of ownership here is a big issue. The cost of the software is not the entire story.
You have to take data traffic, and pay the operator for that. We work closely with the operator; we are branded by the operator, and can be bound closely to their data handling. One thing we can do is get cheaper data plans.
We believe you end up paying for it one way or another. With Microsoft, you get the software for free, but you are forced into the Windows Mobile camp and may end up paying more for those products. If you choose Visto, you can choose Symbian, windows Mobile or other handsets. Competition results in lower prices.
How about Good Technology? It's software focussed, and it's technology agnostic?
Good is US centric; it doesn't have a big presence in Europe. It's Exchange only; they say they will support Domino this year (announced this week), but we've been doing it for a long time.
Also we support a larger number of devices than Good. They support only a handful.
The biggest difference is that Good is following a branded strategy, while we are partnering with operators, letting them leverage their relationship with the user.
There are arguments in favour of a branded strategy. It allows IT managers to buy mobile e-mail separate from other telecoms services and have more control.
Good is a small company, about the same size as Visto. Their ability to service a customer in Europe and look after an IT shop is limited. So is ours, that's why we partner with people [mobile operators] that have more impressive resources.
The conventional wisdom says operators are not very good at selling to enterprises. It's true, when they are selling a bleeding edge type of product. But the days when mobile e-mail was something people hadn't heard of - those days are gone. Everyone understands the productivity benefits.
When a technology reaches maturity, operators have resources to bring to bear that allow them to package plans that a company the size of Visto, Good (or Rim for that matter), would not be able to do by itself. We can do things that Good cannot do on their own.
Mobile e-mail is more fulfilling-demand than pushing-products. Operators can be more effective at this than someone like Good selling directly.
So what about Seven/Smartner. That takes the approach you suggest, selling through operators.
Seven is similar to Visto - it sells to operators as a white label product. But Visto won a case against Seven in the US, and Seven is faced with the real prospect of being enjoined from cellular networks in the US. I think their position does not merit being mentioned in the same breath. They do not have the same strength as the others. I do not consider them to be a long term player in this market.
Seven claims a large share of the market however. With more than a million users, it is second only to RIM. Does that count for anything?
They claim to have a lot of operator customers. But nobody has a lot of market share. Anyone who is talking about market share is taking their eye off the ball. There are a billion potential users, and we have 6 million users so far, between us.
I don't spend an ounce of my waking time thinking about how the market looks today. When there's 100 million users, I will want to know what our share is. I think the more important question is, how are they positioned as the pie starts to expand. I don't think they're well positioned at this stage.
Tomorrow: Technology directions, the user interface, and new data types.
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