Jibi-Jabber: RIM’s Related Costs and Changes Needed

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First of all, let me apologize for the lack of an article this past Monday. My birthday was on the 8th and since we all know how birthday’s go, well, that should be reason enough. So after a week of polishing the ol’ brain, it’s time for another episode of Jibi-Jabber.

With the imminent release of the BlackBerry 8800, it would seem this next week will be one of the most anticipated in Research In Motion’s history. On the cusp of something special looming just around the corner, I’m sure shareholders could not be more giddy at this point. Record stock earnings should follow closely behind this week’s release. Oh, to be part of Waterloo these days, right?

With that said, I want to express some of my own personal opinions on needed changes with their corporate solutions business model. Microsoft’s entry into mobile messaging has really changed the entire landscape of this particular market, although some may not necessarily want to pay attention to these changes. Recent reports have shown that, while RIM continues to dominate the handheld market, with nearly a fifth of all units lighting up the horizons being developed by the Waterloo-based firm, Windows-based devices tower over all competition with more-than-half the saturation in the mobile operating system arena.

Currently, in terms of functionality and reliability, RIM has absolutely no competition in the wireless messaging market. This has been the trend for many years now, and you have to wonder if the Canadian-based company has grown quite comfortable in their place atop the kingdom. It is my opinion that RIM needs to change in two different areas: 1) related support costs for enterprise customers, their bread and butter; and 2) monthly service costs.

In researching TSupport costs the other week for a fictional environment consisting of ten (10) BlackBerry Enterprise Servers and 5,000 users for a Tx3 level of service, annual support services rates would total a hair under $105,000. This is in addition to the one-time fees of $300,000 for the server software and user licenses. Throw in about $2,500 per server, as well, and we’re up to $425,000 for the first year of such a large environment, with the $105,000 as an annually recurring fee each year after.

In contrast, Microsoft’s inferior offering operates within your current Exchange environment – no extra software required, assuming you already offer Outlook Web Access to your users. Support costs are included in your enterprise Exchange support contract, an idea that is absolutely ingenious for Microsoft to even think of surviving and competing in this BlackBerry-dominated market. Although it’s a less attractive solution in terms of reliability, functionality and security, Microsoft’s Direct Push has already saved this fictional corporation a cool half-million out of the gate.

With monthly service fees, it seems that BlackBerry data plans tend to run $10-20 per month more than regular data plans, which seem to include support for Microsoft Direct Push. Obviously most of this is completely up to the carrier, but a comparable service for a good percentage less on a recurring monthly basis is quite enticing to the average Joe and, more importantly, Finance and IT departments.

Don’t get me wrong, I personally love BlackBerry and loathe Windows Mobile. The BlackBerry, in some form or fashion, is the only device and phone I’ve used for the last 4 years, with the few exceptions being a Samsung flip-phone (my 7100t was broken and out of warranty) and an unlocked Treo 750v. I’m not at all impressed with Windows Mobile 5.0 nor the devices that run the OS, however I do think, as with all Microsoft products, their offering will get better within the next few releases and revisions.

It is common knowledge that superior products come at a cost, but when the competition starts narrowing the gap at the rate Microsoft has done with Windows Mobile, the superior company (RIM, in this case) needs to start thinking of drastic and appealing change, if for nothing more than to root them with a long-term survival plan.

So RIM, if you’re listening, it’s about time to start re-evaluating your strategies for enterprise and government clients. Free support options sound nice, although I think most of us would settle for affordable. When I present our Tx2 renewal contract, which has increased more than 500% in the last two years, in a few months to management, I can guarantee that there will be a changing of the guard within our preferred mobile messaging corporate standard.