If ever there was a sexy, highly functional device ripe for the channel it's the BlackBerry. It has mainstream appeal (sports stars, celebrities, even Barack Obama famously has one) and a high enough price point to offer a good margin.
With its patented push email, the BlackBerry device is no longer exclusively the domain of senior executives.
Models like the Blackberry Pearl Flip phone and BlackBerry Storm touchscreen phone have broadened the Canadian vendor's demographic - some 60 per cent of BlackBerry smartphones sold in fiscal 2008 went to consumers.
But the Australian IT channel has enjoyed very little of Research in Motion's success.
Here the BlackBerry is sold exclusively by RIM's three local carrier partners (Telstra, Optus and Vodafone) who have complete control of BlackBerry's retail presence and customer ownership.
RIM has a formal channel strategy for systems integrators and resellers in North America - but not in Australia.
It's a challenge that Barnes Lam, RIM's director of alliances for Asia Pacific, is keen to address.
Lam's last job was running the systems integrator program for RIM in North America before moving to his new base in the Asia Pacific.
Lam argues there is a place for systems integrators to enjoy success with the BlackBerry in Australia but the only way to do it at present is for integrators to partner with those parties that own the customer relationship - Telstra, Optus and Vodafone.
In Australia, Lam says, RIM "aligns our [systems integrator] partners with the carriers".
"Telstra and Optus can't be the be-all and and-all," Lam told CRN. "That's why we have systems integrator partners working with them."
Plugging the gaps
If recent comments from RIM founder and CEO Mike Lazaridis are anything to go by, RIM is unlikely to broaden its retail strategy for the BlackBerry beyond its carrier partners in the near future.
The Canadian vendor has more than 400 carrier partners in 150 countries.
"The most important thing we offer," Lazaridis told me in a recent interview for iTnews, "is our relationship with carriers. We're working very hard to make sure they are successful."
But on the services and integration side, a select few Australian partners have built lucrative business models around gaps in the capabilities of the carriers.
Sydney-based systems integrator Mercury Solutions Centre, which arguably offers the most complete set of solutions around the BlackBerry in Australia, has built a solid business identifying these gaps.
The 23-person company, whose specialty is managed infrastructure services coupled with custom software development, discovered the opportunity after being asked to support a fleet of devices and back-end infrastructure for a large Australian banking and finance customer.
As the broader market has embraced the market over the past 12 months, MSC has built out a complete managed service around the BlackBerry.
Above and beyond the skills of the typical carrier, MSC integrates BlackBerry Enterprise Server (BES) - the server-based software used to manage a fleet of BlackBerry devices in an enterprise - with the existing systems, policies and applications of an organisation.
"Carriers are good at provisioning devices, provisioning a SIM, and providing a certain level of device and network support, they've always done that," says MSC managing director Leuk Andersen.
"But when you talk about a piece of infrastructure - software and hardware - behind a client's firewall, which needs to be a part of change management and security processes a company runs - that is a new area of involvement for a carrier."
Curiously, systems integrators in Australia gain no margin on reselling BES as their North American or European counterparts might. But for the systems integrator, says Lam, the opportunity to sell BES is a "services play" rather than a straightforward box sale.
"Whether or not they get a margin just isn't important," Lam said. "The margins are so small; it's not what the integrator is interested in. They want to sell services - maintenance, after-sales support."
MSC, for example, offers everything from back-end BES integration with legacy systems, to training for BlackBerry users, and several levels of support services - ranging from low-touch, basic "phone a friend" device support to full outsourced management of the BlackBerry solution.
MSC runs its own referral programs, seminars and roadshows and has a strong, direct relationship with the vendor.
But to keep overheads low and focus on what it does best, the integrator relies on carriers to act as its field sales force.
Andersen says the engagement model with carriers varies from deal to deal.
One model involves a basic reselling relationship between integrator and carrier. The carrier brings the integrator an opportunity, the customer signs with the integrator and the integrator rewards the carrier with a referral bonus (cut of the deal).
A second model sees the customer sign a contract with the integrator, whilst maintaining a billing relationship with the carrier. It takes advantage of the convenience of carrier billing, but leaves contract risk in the hands of the integrator.
A third - and the method Andersen says most carriers are looking to evolve to - is for the carrier to own the customer and contract the integrator to fulfil work on their behalf.
Andersen says that at the end of the day, companies like MSC have to make a choice between funding its own direct sales force or "leveraging other people's assets" .
"A carrier has a large access to market - it is a natural conduit to market," Andersen points out. "It would be crazy of us not to use that - you can't beat a sales force that is 300-strong."
Extending the BlackBerry
RIM may be light-on in channel strategy, but the vendor literally offers a world of opportunity for those partners that have software development skills.
The focus at present is on moving the BlackBerry beyond its traditional mobile email function and more broadly into corporate and consumer applications.
"RIM has certainly been very carrier-aligned, which has meant partners follow a similar model," says Andersen.
"But as time goes on, there is a need to look deeper into the relationship between the handset in your pocket and mobile data. RIM is looking more broadly at the application and ISV [independent software vendor] space."
IDC analyst David Cannon says that while RIM has started to see some success with encouraging American BlackBerry users to connect to enterprise apps, there hasn't been much traction in the Australian market.
"There has been a lot of hype around mobile enterprise applications over the last few years, but the reality is that there is very little real world deployment in Australia today," he says.
"The launch of 'off the shelf' application portals like RIM's BlackBerry App World is helping to generate interest and making it easier to deploy enterprise applications [overseas] but there is much work that still needs to be carried out."
Cannon feels a lack of standards and high integration requirements are "holding back this market from reaching its true potential."
Andersen agrees - and says the Australian market is two years behind the US when it comes to accessing corporate apps on the BlackBerry.
"The large banks and financial companies are notoriously self referencing and conservative in the way they look at applications," he says.
But MSC is well placed, he says, to be able to capitalise on the opportunity when the market is ready.
"As an organisation, we have to prepare for when sales force and field force automation, ERP applications, are going to take off on the BlackBerry.
"I've a strong view that quick wins are important. Customers can start off with some push information as step one. There are plenty of scenarios where middle management can gain quick access to sales information.
"Then the next level you offer them is basic functional extensions - where a customer can improve purchase orders or sales quotations very quickly for reduced [sales] cycle time.
"The third area is where we change the way the business works, the true business model differentiator that happens when you put certain features and functions at the fingertips of those in the field."
The carriers, while working hard to train their staff around the idea of a "solution sell", are unlikely to match the skills of the systems integrators once enterprise customers are seeking to connect to corporate applications.
Several carriers have attempted to acquire their way into providing IT services - but Telstra's purchase of Kaz and Optus' buy of Alphawest has not set the world on fire for either party - and more often than not these IT integrators are losing bids to the larger outsourcing specialists such as IBM GSA, EDS and Fujitsu.
Specific to BlackBerry, carriers with their own managed services clients still routinely outsource Blackberry support and integration services to the likes of MSC.
"From our perspective, managing a fleet of Blackberry users and the platform that it runs on is just the very first drinks station in a very long race," says Andersen. "The next part of the journey is providing support around applications.
"It doesn't make sense to be a BlackBerry user and call up one number for support with a BlackBerry problem, but call a different number for the core functions, the ERP tools, intranet, field sales applications you access on that same device.
"As a customer, I don't want three or four companies to call for that support. I want to call one number and have that sorted out and escalated and dealt with."
It's all about the apps
In the consumer market, RIM's Lam says the most lucrative opportunity to partner with RIM comes from developing apps that extend the functionality of the BlackBerry platform.
With three carriers in the Australian market offering BlackBerry solutions at more or less the same price point, what the carriers require most are locally developed applications that help them differentiate themselves.
"The carriers are always looking for a compelling reason why someone should buy a smartphone from them rather than their competitor," Lam reiterates. "Customers aren't just going to differentiate between the carriers on service plans, but on applications."
Those who want in on such business opportunities need only to ask themselves a simple question, he says. "What am I going to offer a carrier that would trigger a customer to walk into a Telstra shop rather than a Vodafone shop, or vice versa, to buy a BlackBerry Storm?
"Or in other words, do I have a compelling application that will attract bundling deals for the carriers? This is not like selling a computer," Lam concludes. "It's not even like selling a cellphone. The BlackBerry is a smartphone. It's about applications."
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