RIM deal with Palm signals the emergence of BlackBerry as a software platform

Waterloo (Ontario) - The announcement this morning of an agreement between Research in Motion and Palm to provide BlackBerry Connect secure e-mail for the forthcoming Treo 650 smart phone, may be the latest milestone in the migration of BlackBerry outside of its traditional home base of dedicated e-mail hardware, and toward the fuzzier realm of the software platform.

Just three weeks ago, RIM introduced the BlackBerry Connect service to the US market, by way of announcing a deal with cellular carrier Cingular, via the Nokia 9800. Early last week, RIM extended its Nokia deal to include support through its Eseries smart phones. Then late in the week, RIM followed up with announcements of e-mail service to T-Mobile customers through Yahoo Mail, plus a BlackBerry unit designed exclusively for Sprint's Nextel unit. One way or the other, RIM is extending its core service through the nation's major carriers.

It's as if BlackBerry service were a given, as if there was never a pending injunction against RIM in US District Court, which could completely shut down RIM's entire American operation unless the Supreme Court decides to hear its appeal. One look at the US telecom industry tells you that at least a majority of carriers, and many of the world's phone manufacturers, believe all will turn out positively in the end for RIM - even if, as one prominent US patent attorney predicted, the company may end up paying over half a billion dollars to settle.

As a pre-emptive move, therefore, BlackBerry Connect is providing e-mail integration with Exchange. "So if they can keep a broad base of handsets compatible with their mail synchronization technology," Rubin added, "then that's a good defense against competition from Microsoft."

Another incentive for RIM's move toward software platforms could be cost reduction. John Barrett, director of research for Parks Associates, reminded us that manufacturers have learned from Microsoft's huge success that it's better to provide the software-based heart and soul of most every device in the market, than to produce the one great device that everyone wants. There's a common joke in the IT industry, said Barrett, that every manufacturer wants to be a software platform provider, the same way every movie actor wants to be a director. "Everybody knows that, in the long run, it's hard to make much money off of hardware," he told TG Daily, "because it just gets commoditized. But if you offer some kind of software platform [with] a lot of hardware players incorporating it, you've got better margins. That's definitely part of the motivation for Research in Motion.

"It's a very attractive business," Barrett added. "If you can offer some kind of proprietary standard for any kind of hardware device that is very common, you're essentially a little baby Microsoft."

With experts continuing to predict a hefty settlement of RIM's dispute with NTP, is the fact that RIM may need plenty of cash on hand part of its incentive to extend its platform as fast and as far as it can? Ross Rubin believes NTP is not RIM's big problem, settlement or no - it's Microsoft. "Every time Microsoft sells an Exchange upgrade," he told us, "that customer becomes a candidate for bypassing their software. So [RIM] needs to make the case for the superiority and compatibility of their software."

On the other hand, Rubin believes we shouldn't mistake all these recent alliances with manufacturers like Nokia and Intel, and carriers like T-Mobile and Sprint, as votes of confidence from these companies in the dispute's outcome. If RIM were suddenly to disappear in the US, he said, both carriers and manufacturers would still have plenty of alternatives on hand...and there's always Microsoft. "I'm sure that RIM's competitors would greet them with open arms in the event that RIM could no longer provide a service to them," said Rubin.