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Nokia set to clash with Microsoft in new "wireless middleware" code market

The market for wireless middleware is at the centre of a $1.7 billion battle, says Ovum, the analyst and consulting company. It's the already-cash-strapped operators, says Ovum, who have most to lose ...

The battleground is for wireless content developers, and the question is which platform they will adopt - what, in effect, will be the basic standard on which software is created?

"Wireless vendors are increasingly finding themselves competing with IT vendors to supply middleware to operators," is the message from analyst Jessica Figueras; who predicts that "winning the platform battle is a matter of survival, for operators."

The new report, Wireless Middleware: Enabling Services, Driving Change, shows that industry players are all jostling for position, hoping that their network, their device or their software technology will become the most important platform for delivering wireless services.

Ovum's report focuses on "platform ownership." It sees a battle between "device platform owners" like Microsoft (with PocketPC and Smartphone at one end, and the IP network platform at the other) versus Nokia (with Symbian and its own advanced network infrastructure) seeing a new market for "wireless content developers."

Operator spending, which Ovum forecasts to grow to $1billion by 2007 in a total market worth $1.7 billion, looks attractive to companies like Nokia and Microsoft; but operators fear that placing vendor-owned device platforms centre stage "will commoditise the role of the network," says Figueras. "Wireless middleware promises to help them maintain control by making it possible to service multiple device types."

Ovum estimates that the total market for wireless middleware software will grow from $714 million in 2003 to $1.7 billion in 2007. The enterprise market will account for $421 million of the total wireless middleware market this year, against $294 million for the operators market. But Ovum forecasts that sales to operators will ultimately supersede sales to enterprises with operator spending growing to $1 billion, making them a prime target for vendors.

Mainstream IT vendors such as IBM, Oracle, Sun and Microsoft, plus a whole raft of start-ups, have their eye firmly on this opportunity. This means increased competition for wireless equipment vendors such as Nokia, Ericsson and Motorola, who currently absorb most wireless operator spending.

"The emergence of wireless standards has thrown open the market for wireless middleware. Converging standards mean that mainstream IT vendors can increasingly sell to operators, without necessarily having to support dozens of telco-specific standards and technologies, says Figueras. 'Carrier-class' isn't the badge of exclusivity that it used to be. And wireless vendors will find their total share of operators spending dwindling rapidly."

The process of convergence will also affect relationships between IT and wireless vendors. "We expect them to partner much more closely from now on," said Figueras. "The wireless vendors might have the relationships with the operators now, but it's the IT vendors who have all of the software architecture expertise that wireless operators desperately need. In the longer term, we should even expect to see consolidation between the two groups."

A detailed report series on this topic area entitled "Wireless Middleware: Enabling Services, Driving Change " authored by Jessica Figueras, Michele MacKenzie and Neil Ward-Dutton is available now. For sales information, please contact Ovum at www.ovum.com, or call +44 (0) 20 7551 9021.