RIM Blackberry has an uphill battle ahead

I have been using RIM’s Blackberry for a couple of years now and I can’t imagine how I survived without it. It has been a tremendous productivity booster.  As a customer-facing professional, I am able to be very responsive since I can respond from wherever I am, without having to worry about booting my laptop and looking for internet access. It has indeed changed my life. Unfortunately, beloved RIM is facing some unprecedented challenges. Alex Frankel has published a well-researched article (via Slashdot) in the July 2005 issue of Technology Review chronicling the rise of RIM and how it has managed to survive and grow rapidly.   Alex only briefly touches upon the challenge from Microsoft and does not cover it in great detail. In the company I work for, lot of my colleagues have bought Treos and other smartphones, but since we run Blackberry Server software on the backend,  these  colleagues are not able to use their devices for corporate email as they are not supported.  Given that Blackberry Server software is installed in 42,000 corporations worldwide, it makes for a formidable entry barrier. Enter Microsoft Exhange Server 2003 version which has built-in-for-free Activesync functionality ( that has features similar to Blackberry Server software). To understand Microsoft’s strategy read Engadget’s Peter Rojas and The Register  commenting on this topic. Microsoft Exchange Server is the dominant corporate email platform per many analysts (read this Forbes article covering this topic) and so all the corporations get Blackberry like functionality without having to pay for the Blackberry server software and at the sametime allow many types of devices to handle corporate email.  Both Palmone and Symbian  have licensed Microsoft’s Active Sync protocol that allows this communication to happen and of course, Microsoft’s own Windows Mobile operating system supports Active Sync. That pretty much sews up the entire smartphone market as Palm, Symbian and Windows Mobile are the top 3 operating systems in the smartphone world. Therefore this move from Microsoft threatens RIM from both ends – its vaunted DMZ strategy on the server side and its devices strategy on the client side. There is also a third angle to this –  RIM charges a hefty monthly fee ($30-40/month)  for its service which could become uncompetitive with the cellphone service providers data access plans costing half that much ($15-20/month).  So this is a triple-whammy for RIM that strikes at its core business model. Ironically, its the tight integration with Microsoft Exchange that enabled Blackberry’s rapid adoption. It was only later that RIM started supporting Lotus Notes. There are still a few more advantages  that RIM has such as the fact that it offers the entire end-to-end integrated secure service using its own data centers. But the fact is, IT departments of large corporations have been running secure back end environments  supporting cell phones, modem pools, internet access etc. for a long time, so its a matter of time before they master how to run this Microsoft Exchange server add-on quickly. In fact, my company is installing this version over the summer. So I will be able to observe first hand, how it is able to handle the various devices that come in to the network. This will be one interesting battle to keep track of.