Monday, November 20, 2006

Motorola buys Good: the Palm opportunity

Motorola buying Good has been a strange transaction.

Two things pop up, in my opinion:

1. It was announced on a Friday
2. It was announced with an undisclosed amount

Every PR agent on the planet will tell you that you do NOT announce anything on Friday. You are not going to get press or move the stock price. When you spend 500 millions on a company (as later reported), you are supposed to be proud of your acquisition and make a big deal out of it. Why would you not disclose the amount? Because you feel it was too expensive and you signed a bad deal?

I am not sure if we'll ever know, but it sounds to me like someone in Motorola was not really convinced about this acquisition. How would you? Good was getting crashed by Microsoft on the server side (zero dollars is hard to fight), with Palm OS disappearing (it was the only thing they had left to make money). They were about to disappear... And they got bought for 500 millions. Looks like a good deal for the investors in Good, which poured 200+ millions in it. They must be so relieved ;-)

The acquisition has been clearly a reaction to Nokia Enterprise buying Intellisync. Moto had to show something in the enterprise as well, they went with Symbol first and Good second. They were kinda forced to.

Motorola is not an enterprise company. The are a consumer company. Symbol and Good will not help them selling more RAZR. They will help them to have an enterprise story (a "story", not a business, since I will be surprised if they will get 10% of the revenues from enterprises compared to what they are getting from consumers...). Same for Nokia, where the acquisition of Intellisync has not really been a great success... The goal (for both)? Make sure Microsoft does not eat the entire smartphone market.

Here lies the only good reason for Motorola I could come up with: avoid Microsoft to control their destiny in the enterprise (Motorola is shipping the Q, with Windows Smartphone on it), to then protect their consumer business. Which is the only one they really care about.

Now, would you spend 500M for something you really do not care about? Yes, if you have a lot of cash ;-) But you will not make a big deal out of it. You keep it quiet as much as you can.

Next step, if they are smart: you make sure to avoid the mistake to move Symbol and Good into the consumer space. They do not get it. They will never get it. They are close protocol, closed source, close everything... All the people in those companies just get enterprises only. You better keep them separated from your core consumer business.

If Moto is thinking about using Good for a consumer push email and multimedia sync play, they are setting themselves up for a big failure. If they plan to migrate the Good client on Mobile Linux, I just hope they target it to enterprises only. The consumer market is going to be open. It must be open as in SMS open, as in Voice open. Carriers need it to make money... Interoperability is the only way to move data on mass market mobile devices to the next level. You do not do it with a proprietary approach. You do not do it with the Good protocol.

In any way you look at this market, you see four big silos appearing: RIM, Microsoft, Nokia/Intellisync, Motorola/Good. All proprietary. All closed. All enterprise focused. Anybody trying to go horizontally on the mass market (supporting a billion devices) with a proprietary approach will be crushed (and acquired). Honestly, I will be surprised if Seven and Visto will be around at the end of 2007. The only possible approach for the mass market is going with open standards and a leveled play field. And open source, if I might add ;-)

Now, what about Palm? They are not a silo. They do not have a server, no push-email, no multimedia over-the-air synching. They could have been RIM but they missed it, because they never developed a server component. Their entire story around push email was Good, now gone to a competitor... It must be tough to be on Palm's board these days...

However, this actually might be a great opportunity for Palm.

If I can suggest a strategy (I am a Palm fan, after all): go open source. From the device (with Mobile Linux: throw away the Treo 700w that is a piece of #!#@) to the server. Forget the enterprise market and focus on consumers, moving smartphones to the rest of us. When I look at the Treo 680, it points to the right direction. Cut a niche for yourself, move out from Palm OS to Mobile Linux. Embrace open source on the server side (no suggestions here ;-) and remember why you made it initially.

It was HotSync who made Palm. Synching your data with your PC via a cable was the reason for using a Palm. The next level is over-the-air synching. Your PC becomes a server in the cloud, powered by Palm (who once was a MVNO, if you remember...). You sync your email, PIM, pictures and music over-the-air, with multiple devices. It is your consumer mobile hub. Powered by Palm. Do it open, with SyncML, and you'll be a player. Stay the course, support Microsoft and proprietary approaches and you'll be another Symbol, bought by a silo.

I know I am biased, but this looks like a good opportunity to me...