BlackBerry Maker Comes Late To The Small-Business Game

Research In Motion--free from the clutches of the NTP patent lawsuit--has its attention back on growing its business, and it has its eye on the potentially lucrative small- and midsize-business market. Yet its hosted wireless e-mail service brings RIM into a tough new market: Businesses already have options from rivals, and some IT directors are concerned about giving up control over the service.

RIM's new service, which it will offer through other providers, is designed for businesses that want to give employees wireless e-mail but don't have the internal IT resources to deploy BlackBerry Enterprise Server and accompanying middleware. The hosted service supports Microsoft Exchange, IBM Lotus Domino, and Novell GroupWise, among other e-mail platforms. A number of RIM partners have signed up to offer it, including EDS, IBM, and Vodafone.

But this isn't a novel approach: Microsoft, Nokia, and Palm already offer similar services through partners. And companies that haven't signed up for hosted wireless e-mail for their PDA-using employees may not be comfortable giving up IT control. With e-mail, security's the big concern: Falsified information in attachments ranked as the No. 1 means of attack among 744 U.S. companies that reported a breach, according to a new InformationWeek Research survey.

Houlihan Lokey Howard & Zukin, an investment banking firm with more than 700 employees, has an in-house BlackBerry Enterprise Server for wireless e-mail. The firm can't imagine going with a hosted service, because the on-site server "delivers on security and compliance requirements," says Fred Weiss, the firm's IT manager.

Still, RIM's service is sure to draw some customers. While mobile e-mail started with the executive crowd, cheaper devices and services are broadening businesses' interest in providing it to more employees. Hosted services will win over smaller businesses that want business-class mobile e-mail without the up-front cost or the personnel to manage the complex systems, predicts Justin Hectus, director of information at law firm Keesal, Young & Logan. But not his firm: It's using Good Technology's wireless e-mail service with its Exchange 2003 server, which is managed in-house.Finding The Niches

For some midsize businesses, even the executives aren't good candidates for mobile e-mail. New York's Bellevue Woman's Hospital has 400 employees--most using Wi-Fi-enabled laptops--and hospital executives are usually on-site, where most e-mails can wait until people are back at their desks, IT director Brett Kessler says. "In an environment where your entire [executive] suite can be counted on one hand, it's easy to pick up the phone instead of sending an e-mail," he says.

RIM isn't betting its entire small- and midsize-business strategy on the hosted service. In March, it started offering a version of the BlackBerry Enterprise Server as a free Internet download aimed at small and midsize companies that will deploy and manage mobile e-mail in-house.

After paying a $612.5 million settlement to NTP earlier this year, RIM is doing better than analysts expected. The company brought in $613 million in revenue in its first quarter, ended June 3, up 9% from $561 million in the previous quarter and up 35% from $454 million in the same quarter last year. Net income for the quarter was $129.8 million, versus $18.4 million for the previous quarter and $132.5 million for last year's first quarter. RIM says it added about 680,000 new BlackBerry subscribers during its latest quarter, bringing the total to nearly 6 million.