If the popularity of RIM’s BlackBerry caught corporate IT departments by surprise, the threatened shutdown of BlackBerry messaging because of the patent infringement lawsuit by NPT was a second surprise. That has led proactive enterprise CIOs to take another look at their BlackBerry dependency and explore ways to reduce their risk by finding other suppliers of handheld email.

What they are finding, at events like the 3GSM conference in Nice, France and CTIA in Las Vegas in April, is that they have choices now, especially in the form of new Smart Device technology running Microsoft Windows Mobile (http://www.msnbc.msn.com/  id/11327938).

For the CIO or CTO of a large financial enterprise, moving from BlackBerry to Windows Mobile makes sense in a number of ways.

To begin with, they don’t have to build out a new infrastructure to support Microsoft Windows Mobile. Organizations that run Microsoft Exchange 2003 SP2 in their infrastructure, already have the capability to run RIM-like functionality on their Windows Mobile devices, but at a far lower cost.

RIM (Research in Motion) is essentially a hardware company with a hosted middleware product. As financial services firms understand better than anyone, middleware is acceptable when it is the only alternative, but it slows processing, grows into unwieldy architecture, and adds costly complexity to the enterprise. It’s much better to work with technology that runs on a single platform, or at least adheres to a single standard, than it is to add middleware to a technology stack.

Admittedly, until now BlackBerry pretty much owned the world of secure push email through local wireless carriers across North America and in several other areas around the globe. Almost everything RIM has done in the last three years is about a mobile messaging platform, parts of which are a hosted service. The drawback to a hosted service for messaging is that an enterprise IT manager has to not only pay for managing the firm’s own RIM infrastructure, but the firm also must pay the service fees for their messages traveling through RIM’s NOC (Network Operations Center).  In other words, RIM controls a switch that it can turn on and off. That gives RIM the power to turn it off if they want to or if they are forced to turn it off, which is what nearly happened over the NTP suit (http://www.msnbc.msn.com/id/11659304). NTP has five or six patents on the way email messages are sent to mobile devices. The way RIM works, if a company wants to send messages from Microsoft Exchange to its RIM BlackBerries, it has to install BlackBerry servers, route the message to RIM’s NOC, which in turn sends it to a wireless provider and then to the user’s device. RIM makes money on a client access license, middleware (BES – BlackBerry Enterprise Server), a service fee it receives through the carriers, and finally the hardware. This means that companies which rely on BlackBerry for their messaging are dependent on a network that can be shut down, by lawsuits or software. It has, in fact, gone down before for a software upgrade which cut off over two million users for several hours. Not the best sort of infrastructure to rely on for line of business applications like market data, much less trading.

With Microsoft wireless messaging, a company owns the basic infrastructure – Microsoft Exchange Server – and contracts with any number of competing wireless providers to deliver the messaging to the field through their data networks. Microsoft wireless devices are already widely deployed – FedEx has 45,000+ users of Windows Mobile handhelds to manage delivery services, the NYSE uses Windows CE devices on the trading floor.  And recently, eSpeed (a division of Cantor Fitgerald) announced the availability of a Windows Mobile solution for US Treasury and Foreign Exchange trading and market data (see page 34).

Microsoft is well known for its success in line of business applications, and we provide an open-based operating system for those wireless devices. When you develop on a Microsoft desktop or server using our standard .NET toolset, the same toolset is used to develop on Windows Mobile devices. By contrast, BlackBerry runs on a proprietary version of Java and Symbian, so it uses its own proprietary language and development tools. With over 900,000 Visual Studio developers out there, it is easy to find someone to create an application for your business, and create it quickly.

GMAC, for example, developed a mission-critical application for their commercial real estate group in under 90 days. That’s typical for mobile device development on our platform – it is quick, you can manage it from behind your firewall, and the architecture is open, standard .NET.

Unlike BlackBerry, Microsoft doesn’t require any middleware on top of Exchange. If a company has Exchange 2003 SP2 it doesn’t have to install any new software; it just turns on the mobile messaging component that comes with Exchange and all the firm’s users with a Windows Mobile device – from notebook computers to SmartPhones – can just turn it on and it works.

No one can turn it off on you either. The firm owns the Exchange license and therefore has full control of the mobile messaging, just as you control the firm’s email and instant messaging over a LAN.

For the users, it means that if they own a Treo 700w and have a Verizon wireless voice plan they can add a data plan and receive messages from the corporate network. All the messages flow securely through the carrier network, through the company’s firewall to the Exchange server, and that’s it. No one outside the organization has a piece of the messaging. Each Windows Mobile device runs software that enables their email, calendar, contacts, and even tasks to be securely transferred to their device in real-time push.

One very practical impact is on cost. With RIM, a user pays about $300 for the device, plus $100 a month for a client access license. The middleware sits on a BlackBerry server, and each server costs $4-5,000 plus yearly upgrade costs.

With Microsoft, you already own Exchange, and a wireless carrier’s data fee is about $20 - $50 a month for unlimited data (based on the carrier plan).  The only other costs you incur are device costs. No extra client access licenses, no extra server costs.

I have found it remarkable that among the many financial services firms I have talked to, almost no one had a backup plan in case BlackBerry got shut down.

Microsoft-based mobile solutions with push email are coming out now through mobile operators. Microsoft Windows Mobile software is licensed through OEM’s like Palm, HP, and Motorola, and subsequently tested by mobile operators prior to their release. Palm has launched the Treo 700w on the Verizon wireless network that works like the BlackBerry and offers push email. Sprint has introduced a new Pocket PC called the Sprint 6700, which also supports push email out of the box. In the next two or three months we will see just about every carrier in North America introduce push email that runs on the Microsoft Mobile PC operating system.

For financial services firms, this choice of hardware providers – HP, Motorola, Palm, Samsung – and a selection of wireless carriers means they won’t get locked into a single provider, and competition usually leads to better pricing and rapid improvement of features and network reach.

Mobitor, a San Francisco based mobile CRM firm that supports financial services applications, reports increased customer interest in the Microsoft mobile platform since the BlackBerry-NTP lawsuit made firms realize how dependent they were on a single potential point of failure.

From my conversations with firms across North America it is clear that if there is one killer app it is a direct connection to line of business applications without building new versions of software or adding complex middleware. Users are growing to expect that if they want to access information and then act, it shouldn’t matter whether they are on the phone, at a desk, working with a notebook computer or operating from a SmartPhone.

Now anything that can go through Microsoft Exchange can be accessed through a SmartPhone with QWERTY keyboard, like the Treo 700w or on a notebook computer with an EVDO wireless card that can support 600-800 kilobit per second downloads – DSL speed on a mobile device.

Since financial services firms became aware of their BlackBerry vulnerability, I have been working with several leading Wall Street companies in pilots using Microsoft technology to provide messaging, market data, and trading. Some are looking to replace RIM, some want to run Microsoft alongside it, at least for now.

This market is only going to grow. Soon the ubiquity of technology will be as widely accepted in American business as it is among young people text messaging in Scandinavia or Asia. Walk out your door and you will have access to information, no matter what you are carrying – whether it is a small mobile device or a laptop. You don’t even have to do anything to stay connected. And from the viewpoint of the enterprise network manager, it is pretty much a no-brainer to invest in it when it runs on Microsoft licenses they already own.

Speaking of Asia and global markets, one of the fastest growing areas of mobility is Mobile Payments, or Micro-Payments. Banks, mobile operators, and vendors are teaming to provide seamless payment systems using mobile phones. A perfect example is paying for parking or food services using your cell phone. With the growth of mobile phone ownership globally, these “pocket wallets” are primed for use as barter since the technology behind these devices is tied to carrier billing systems. Why not pay for your goods and services while paying for voice and data usage, all securely through your mobile device? PayPal in the US recently announced the use of cell phones as a payment system. PayPal members can pay for goods using secure text messaging.  With over 100 million members using PayPal (a unit of eBay), “Will that be Cash, Credit Card, or Cell Phone?”

Mobile payments are exploding in markets outside of the US and clearly starting to take hold within the US markets. Microsoft is poised to make its mark in mobile payments by offering software to take advantage of easy integration of payments systems and mobile device hardware. More to come.

This is a market poised for explosive growth. Although if you work on Wall Street it looks as if everyone has a BlackBerry.  In reality, RIM has only two to three percent of the mobile messaging space, or about 4.5 million users worldwide, and about 2.5 to 3 million of those are in the US. A large percentage of those users are in the financial services space. Windows Mobile currently has more than 45 percent market share of the mobile device space and growing. 

Competition is fierce and customers are demanding a mobility platform that can not only meet their mobile messaging needs, but also solve real world business problems and improve business processes. Microsoft is leading the charge by offering solutions that lower TCO and increase ROI all at far lower costs than its competitors.

by Adam Kornak
Enterprise Mobility Specialist
Financial Services Group, Microsoft