Motorola Finds Symbol A Comfy Fit For Enterprise Mobility Push

Motorola Chairman and CEO Ed Zander wants his company to win enterprise mobility business in large accounts and sees its $3.9 billion acquisition of Symbol Technologies as a vehicle for

September 25, 2006

7 Min Read
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Walk into the shoe department at Bloomingdale's, find a pair of Stuart Weitzmans or Marc Jacobs shoes on display, and then hesitate: It'll take a million years for the salesperson to take your shoe size, run back to the stockroom and return with a pair that fits—if they have them in stock. Right?


Instead, if you tell the Bloomie's salesperson what shoe you like, he or she will simply swipe a Symbol Technologies wireless bar-code scanner over the display pair, enter your shoe size, and send a text message back to the stockroom. If the shoes are in stock, a runner will have them for you in seconds.

Voila. That solution was brought to you by Stratix, a Symbol channel partner in Norcross, Ga. Stories like that are beginning to transform thinking in the IT world.

Now Ed Zander wants to get inside the shoe department at Bloomingdale's.Or rather Zander, chairman and CEO of Motorola, wants his company to win enterprise mobility business inside large accounts, such as Federated Department Stores (which owns Bloomingdale's). And last week, Schaumburg, Ill.-based Motorola agreed to pay $3.9 billion for Symbol to do just that.

"What better way to make our enterprise mobility play?" Zander said in a conference call with financial analysts about the acquisition. "The Internet is about to go airborne, and it will go airborne big time."

Symbol has successfully embraced a solution provider channel with enterprise and networking expertise, delivered highly mobile point-of-sale and transaction technology, and made it work. Despite several years of financial struggles, accounting turmoil and massive layoffs, the vendor has kept its focus on the two areas that Zander and Motorola found too attractive to pass up: research and development that has produced best-of-breed mobile networking products for the commercial marketplace, and a solution provider channel that has the deep reach into large customer accounts that Motorola craves.

"A great customer base," Zander said last week, discussing Motorola's acquisition of Symbol. "It's got a list of Fortune 500 companies that just is the Who's Who."

Since Symbol's channel strategy is almost entirely an indirect one, Zander's path to that Who's Who list now goes through the channel and to companies such as Stratix.Bonney Shuman, CEO of Stratix, said she's upbeat about the deal. "You know, we're just as positive as Motorola is," Shuman said. "What Motorola can offer in terms of a broader product portfolio to us seems to be an exciting opportunity from my company's perspective. Motorola will only enhance what Symbol has done."

The details: Motorola agreed to pay $15 per share for Symbol. It will keep Symbol's Holtsville, N.Y., headquarters open as a Motorola Center for Excellence and let the company become the lead engineering force for all of its enterprise mobility efforts. Symbol's CEO, Sal Iannuzzi, will stay on as a top executive in charge of the operation and will report to Greg Brown, president of Motorola's Networking and Enterprise unit.

NEXT: A closer look at both companies and what fueled their union.

Symbol has been a profitable $1.8 billion company for the past year. Motorola, at No. 54 on the Fortune 500 list, is a profitable $42 billion company. Until the Symbol deal closes, much of its splash has been in the consumer space with cell phones and handheld two-way radios.

As if to emphasize its consumer play, days after the Symbol deal was announced, Motorola announced new vending machines for cell phones. Currently, there are no plans afoot to change any aspect of Symbol's program for its 12,000 channel partners, including resellers, integrators, solution providers and ISVs. As a Symbol spokesman said last week, "If it's not broke, don't fix it."

In fact, the channel operations were a key selling point in the negotiations, especially since Symbol has spent the better part of two-plus years tweaking, building and enhancing its channel."That's one of the reasons we're excited about it," said Motorola's Brown.

"The majority of the revenue coming to Symbol is through its indirect channel. We at Motorola have a robust and muscular indirect channel in the private radio business," Brown said. "We think this substantially expands the [channel] footprint and yet also allows for a high-touch direct sales force and a high-touch channel management group to direct and coordinate those indirect channels," he said.

"I'll tell you, plain and simple, one of the reasons we are very attracted [to Symbol] is the distribution channel reach, and [the] width and breadth this combination affords us, I think, is unlimited," Brown said.

There is concern that Motorola's lack of extensive experience in enterprise wireless channels could disrupt Symbol's enterprise partner program, which was revamped in April 2005 in part to better link Symbol ISVs to solution providers and systems integrators.

"Really, one of the only concerns I have is if there will be any changes to Symbol's channel program, which has been working great as far as we are concerned," said Jeff Lem, president of QData, a Markham, Ontario-based ISV, solution provider and Symbol partner.Beyond that concern, the acquisition should lend added credibility to Symbol and bear a wide range of new products, Lem said. "Those new offerings could certainly expand our market," he said.

How big is Motorola betting on an expanded market for enterprise mobility? Consider that since Zander assumed the helm at Motorola, the company has gotten out of one of its biggest businesses—microprocessors—and now is investing heavily in RFID, wireless networking and commercial solutions. Its combined Network and Enterprise division, run by Brown, is an $11 billion business.

By combining Symbol's 12,000 indirect sales partners and Motorola's 9,000 channel partners, Motorola will possess "a stronger, more dynamic channel strategy," Brown said.

NEXT: What's ahead for Motorola-Symbol and its channel partners.With the deal, expected to close late this year or in early 2007, Motorola will gain access to Symbol's RFID offerings, which are rapidly replacing traditional bar codes in many supply chains, as well as to Symbol's handheld computers, which the company has used to lead the enterprise wireless market.

Tom Robinson, executive vice president of sales at Odyssey Software, a Rochester, N.Y.-based Symbol partner and ISV, said the Motorola-Symbol deal should increase partner sales. Growth in the wireless technology market has propelled a 20 percent increase in Odyssey's revenue over the past year, and a combined Motorola-Symbol should spur that growth even more, he said.Odyssey heard rumblings from Symbol that something was afoot, Robinson added. "We did have a call with our [Symbol] ISV representative, who [last week] gave us a heads up that something was going on," he said. "But at this juncture, we are just going to stand by and see how everything plays out."

Others may have heard rumblings, too. In the days before the announcement, shares of Symbol increased significantly on Nasdaq. Despite speculation that Iannuzzi and Symbol were talking to several potential suitors, Symbol's CEO denied that he simply put the company up for auction.

Shuman was optimistic. She noted that Symbol has invested heavily in the channel and its channel strategy, including an aggressive go-to-market route that has included bringing solution providers into accounts, and has been ready to stand up with channel partners in accounts when asked.

"The past few years has been a very positive channel environment," Shuman said. "All signs suggest Motorola will embrace the channel as enthusiastically."

In fact, Motorola executives did nothing but act with enthusiasm. Its top executives, including Zander, traveled to Symbol headquarters in Holtsville to close the deal and announce it to the media, with Zander saying he was all but blown away by a display of the latest Symbol technology on show in a front room there.Add to that the fact that Zander grew up five miles away from Symbol, in Commack, N.Y., and that Zander rose to prominence in high-tech at another enterprise company, Sun Microsystems, and the exuberance was difficult to miss.

"I think enterprise goes mobile," Zander said. "We've watched workforces go mobile. I think with the tools and technologies that Symbol has and some of the things we do, we can accelerate that.

"This is going to be big over the next several years," Zander said. "This is about betting for the long term, and this is about positioning Motorola in enterprise mobility. You have to make those bets and deliver on them."

Even placing bets, though, can bring a reminder of the growth of enterprise mobility. At some horse race tracks, including Keeneland in Lexington, Ky., it's possible to wager on a race from a table in the track's restaurant by giving your pick to a cashier carrying a handheld wireless mobile device that takes your race selection and spits out your ticket. Wireless mobile retail is everywhere.

"Which is why [Stratix has] been so important to Symbol," Shuman said. "We don't see Motorola touch that space. Retail is a big thing, and that has many different flavors in terms of actual applications. We see that marketplace changing."0

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