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Old 03-07-2005, 12:14 PM   #1 (permalink)
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Default [2005-03-06] BlackBerry vs. Good Technology, CEO interview

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AlwaysOn: If you could reach out to the AlwaysOn world, what kind of people would you like to talk to that could help you achieve your strategic objectives.

Danny Shader: (Mr. Shader is the CEO of Good Technology, whose GoodAccess and GoodLink products extend mission-critical enterprise applications to mobile employees.)x We think that in a standards-based world, we're not the only app on the device, so we're interested in people who build applications complimentary to ours. We're also interested in talking to people in the device business.

AO: What are examples of complimentary applications that you have today as partners?

Shader: We have an unannounced partnership with a company that provides extra functions for device security. We have significant partnerships with more than 300 Microsoft Solutions providers that install Exchange servers and GoodLink servers. We also have partnerships with all of the major hardware makers and all of the major carriers.

AlwaysOn: What brand or company has caused you problems competitively?

Shader: Today, the only company we really end up competing with is Blackberry. And it ends up being not Blackberry vs. Good Technology but Blackberry vs. standards, and standards tend to win. The biggest thing we have to worry about is screwing up ourselves. If we let a customer down on a mission-critical application, that customer probably won't want to do business with us again. We're in the subscription business, so they can fire us tomorrow—that tends to keep us honest.

AlwaysOn: What about carriers and devices?

Shader: This is obviously a gigantic and growing category; one only needs to look at Blackberry's success to see that.

AlwaysOn: Is Blackberry public?

Shader: They are public. They have a $16 billion market cap—well, over a billion—but 71% of their revenue last quarter came from hardware, up from 56% four quarters ago. As you can imagine, the people who've been the historical innovators in the cellular industry are very interested in participating in this category. We view ourselves as an enabler for them. Similarly, the carriers don't typically want a sole source, particularly from a completely integrated, vertically proprietary stack. So, carriers are very interested in standards. Obviously, the operating system vendors who enable the device makers are also very interested in the business.

So all of us who are betting on standards have this interesting dynamic where we all want standards to win, but we all want to earn our fair share of that business as well. That competitive dynamic is what drove the PC industry to be so huge, and it's what's going to drive this thing to be much bigger than anybody can imagine today. Good's opportunity, again, is to serve customers well and earn the right to have our place on those standards-based devices and operating systems over time.

AlwaysOn: Yet you seem to believe that mobile is the next big era in computing ...

Shader: With cell phones becoming incredibly powerful, the line between cell phones and computers is blurring. But the modality—the way people use them—is very different. Today, a lot of people think of their laptops as mobile, but I think laptops are portable—xmeaning you take them from place to place, interact with them, and then turn them off. These handheld cellular things, on the other hand, are always on, always connected, and always available for instant interaction at the point of business.

The first thing people seem to want to do is send e-mail, but it goes way beyond that: They want to access corporate data. Notice I didn't say corporate applications,x because the application interface is different when you're in a truly mobile environment—walking down the street, dealing with customers, and so on—but the data sources are the same. So a significant amount of the work that people are doing on laptops today is going to migrate into these handhelds, which means it's going to be a gigantic category. But because the data sources are the same and because some (but not all) of the same applications are going to need to run, people are going to want to use standard development tools—which means that the standard operating systems are going to win in this world.

AlwaysOn: So in the global playing field, will today's mobile device will be tomorrow's computer?

Shader: I wouldn't call mobile devices computersx because the word computerx connotes certain things. But it's clear that in Asia and Europe (for different reasons) people are using their cell phones for more than just telephony. But, frankly, that's what the GoodLink/Blackberry phenomenon means in the United States. When I worked at Amazon, Jeff Bezos [Amazon's CEO] said something to me before I left that I thought was very profound. He said, 'If you're sitting on an exponential growth curve, you tend to overstate growth in the near term and understate growth in the long term.' I think this is one of those exponential curves where it's growing pretty quickly, but it's nothing like what we're going to see as the standards continue to solidify and more of what you can do on laptops you can do on a mobile device.

You can take a bunch of people using handheld devices and put them at a lunch table together, and instead of talking with each other, they'll interact with their devices. You can go home and have your PC sitting on your desk, and you'll sit on your couch with your device. There's something deep that I don't understand that causes people to want to interact with these things far more than you think they should.

AlwaysOn: Not enough love from our mothers ...

Shader: You'll see it: You take a bunch of people from Good out together, and we'll all sit at a table and interact more with our devices than with each other. We're all tapping into some matrix that I don't understand but I think is profound.

AlwaysOn: Is anybody arguing?

Shader: I don't think anybody is arguing that this is the next great big wave of computing. In our business today—mostly because it's a device-led business—we're selling more Treos than anything, but we're about to see this huge wave of interesting Windows mobile devices coming up. There are some really interesting Nokia devices coming (not to mention the existing Nokia 9300).

These devices you wear, you carry them with you, so there's a huge personal preference element—which in turns means there's going to be a huge diversity in the kinds of things people want, so there will be many, many shapes and sizes. The only way the economics will work—the only way anybody will be able to scale the production of devices in a variety of shapes and sizes—is for the operating system to be standardized, the silicon to be standardized, and the application to be standardized. Then, there can be a proliferation of shapes and sizes. The operating system vendors are making that possible; Palm Source makes that possible; Nokia makes that possible.

AlwaysOn: What does Blackberry have by itself?

Shader: First of all, they have a terrific product. It's a really wonderful combination of hardware and software, and they do promise to deliver a Blackberry connect, which is some subset of Blackberry functionality, on other people's devices.

I think that's what's happening now with Palm Source, and Microsoft is enabling the industry to compete with Blackberry. Good's job for our shareholders is to add as much value to that world as possible so that we can take advantage of that market for our customers. Customers who choose standards and choose us are safe because if we fail to perform, somebody else will step in. That's how it works in a standards-biz world.

This is the second part of a two-part conversation between AlwaysOn editor-in-chief Tony Perkins and Good Technology CEO Danny Shader. In Part 1, Mr. Shader spoke about what it takes to serve enterprise customers and what he believes will be the killer mobile apps of the future.
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