Microsoft, RIM make strange bedfellows
Microsoft, RIM make strange bedfellows
Matt Hartley, Financial Post · May 4, 2011 | Last Updated: May 4, 2011 3:07 AM ET
ORLANDO, FLA . Research In Motion Ltd.'s new strategy could best be described as "keep your friends close and your enemies closer."
Of the hundreds of firsttime attendees at RIM's annual BlackBerry World conference here Tuesday, none made a bigger splash than Microsoft Corp. chief executive Steve Ballmer.
The leader of the world's largest software company made a surprise appearance during RIM co-chief executive Mike Lazaridis' keynote to announce a deepening of the strategic partnership between the two unlikely allies.
Under terms of the new agreement, RIM will make Microsoft's Bing search engine and mapping technologies standard issue on all BlackBerry devices, a decision that sees the two former rivals further solidify their relationship in an effort to counter the growing influence of common rivals Google Inc. and Apple Inc.
"This goes way beyond a search box," Mr. Ballmer said during his appearance, adding that Microsoft's services would be "deeply integrated" into RIM's devices.
For RIM, the announcement is the latest in a string of recent realignments in the company's strategy.
That strategy will see Research In Motion begin to integrate its services with those of its rivals in an effort to reestablish its dominance in the smartphone industry.
Over the past two months, RIM has unveiled plans to allow Android applications to run on the new BlackBerry PlayBook, and on Monday took the wraps off a new service designed to enable its business clients to use BlackBerry technology to secure and manage non-BlackBerry devices, namely Apple's iPhones and Google Android devices, which are becoming more popular with RIM's core business user base.
The deal gives Microsoft the ability to increase mobile traffic to its Bing search engine on the strength of RIM's 60 million Blackberry users, freezing out rival Google in the process. Google is the default search engine on Apple's iPhone and most Android devices.
In March, Microsoft and RIM announced a joint venture known as BlackBerry Office 365, a cloud-based version of RIM's BlackBerry Enterprise Server (BES) that inte-grates with Microsoft's coming Office 365 service.
While neither company would say whether any money would change hands as a result of the Bing on BlackBerry agreement, analysts cautiously declared it a win for both.
"The move better positions both RIM and Microsoft against Google, and should deliver a tighter mapping and search experience on BlackBerrys," RBC Capital Markets analyst Mike Abramsky said in a note to clients on Tuesday.
Before the launch of the iPhone in 2007, which kicked off Apple's ascendency in the smartphone world, such a partnership between RIM and Microsoft, two companies that fought for control over the enterprise smartphone market, would have seemed unlikely, if not impossible.
Although the two companies still compete for smartphone customers -Microsoft rebooted its mobile strategy with the Windows Phone 7 platform in November -they appear to have opted for a strategy that borrows from the old adage that "the enemy of my enemy is my friend."
"This relationship is about creating a more robust ecosystem quickly," said Kevin Restivo, Toronto-based senior mobile analyst with market research firm IDC.
"RIM and Microsoft seem like strange bedfellows on the surface, but both companies have pressing wireless needs that need to be filled quickly."
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