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Sendo launch puts phone support in the spotlight

Another smart phone launches: Sendo has promised that its Sendo X (a Symbian-driven model) will ship around the turn of the year. And just how do the phone companies imagine they are going to support it, and the P900 from Sony Ericsson, and all the Palm smart phones, and all the Microsoft ones? Badly, says Intuwave.

The problem is, the phone operators don't know what a pit has opened up beneath their feet. They think they know what they want. Will they be happy when they get it? No, says Intuwave, a mobile software specialist. It's going to cost them all their extra ARPU (average revenue per user) to fund the extra cost of supporting these computers. Because that's what they are: computers.

Sendo remains a minnow swimming among sharks; but it has grown to the point where, yesterday, founder and CEO Hugh Brogan was able to predict sales of four million handsets for next year (calendar 2004) and turnover of around $200 million. That's a successful business by any standards - and to do it in the shadow of an attempt by Microsoft to wind the company up, makes it even more remarkable. So: how did it do it? By doing what the phone operators want, says Brogan. Clever! - but what if they are wrong about what they want ... ?

Several experts agree that they are in for a surprise.

I spent yesterday morning talking with Andrew Wyatt of Intuwave, who released a survey of UK smartphone users this week, and who has more than just a little experience of software support for end-users. He's adamant that his research bears out what many are suspecting: conventional help-desk methods can't make it work. There's too much to do.

Actually, the most frightening figures, for me, were not just the ones that Intuwave's research reveals. Those, goodness knows, are bad enough.

The key fact from Wyatt's analysis is that 44% of smartphone users are doing email with them - and that another 19% would do, but can't. But the scary stats came from analyst Dean Bubley of Disruptive Analysis who reminded our discussion group that (very roughly) a PC notebook has been estimated to cost its owner $3,000 a year in support - the famous "total cost of ownership" figure that Gartner has produced. By contrast, corporate IT reckons that TCO of a PDA or smartphone would be around $500.

By my reckoning, this proves one clear - stark - fact: that corporate IT is not supporting the smartphone. It can't be; because nobody will ever persuade me that a smartphone is a simpler device to operate than a notebook PC.

But people expect them to be. "User expectations of smartphones are based on the experience of voice on a mobile phone. Take the Sony Ericsson P800 smartphone as an example," said Andrew Wyatt. "There are over 12 parameters to set for the email function to work on this device."

Even if the user knows how to set these parameters, there is a likelihood that they will get at least one wrong, "thus resulting in non-functioning email, and a frustrated user." A user who expects "dialtone levels of reliability and simplicity" is going to simply send the device back. Or, which is definitely worse, the user will expect the phone service provider to help.

Intuwave is not sceptical about the smartphone; quite the contrary. It's enthusiastically supportive of the role of this technology in the "real time enterprise" as originally envisaged by Gartner.

Intuwave's white paper on the subject of "zero-latency real time enterprises" notes that "there is a growing desire on the part of IT directors to deploy enterprise applications on smartphones." Intuwave's own research found that 52 per cent of IT managers in the UK's largest companies (with turnovers of more than £250 million) said they would consider deploying smartphones as business tools with only seven per cent saying that they would not (40 per cent were unsure).

But who is going to make this happen? Who pays, more to the point?

Gateway Computers once famously said that "if we take just one support call after selling a PC, that's our margin gone." The margins on phones are harder to measure, but - somewhere between what they cost ex factory and what they cost to the user when sponsored by the operator - they are going to be similar; and providing a feature which causes calls to the help desk will be a great way to eliminate that margin.

Brogan at Sendo speaks enthusiastically about the success of his strategy of allowing the phone operator to control the branding of the phone. That's not quite the same thing as saying that the phone operator knows best, as Rob Schaeffer made clear several times at the post-launch briefings.

For example, it's possible for Sendo to "lock" the Sendo X phone. Not just the conventional way, as with Orange locking the Microsoft-designed SPV so that only approved applications can be loaded, but also so that the startup screen is customised. What Sendo calls the Now! screen (it's the "idle" display on most phones) is live; it can be linked to a specific URL on the Web, for example. Change what appears on that URL, and the phone reflects it in real time; so it can bring you updates, warnings, etc.

It would be quite feasible to be locked down by an operator who wanted to create yet another "walled garden" in which its phone users can be trapped, using only that operator's services: but Sendo made it clear that if they were asked to do this, they wouldn't necessarily comply without comment. Time after time, Schaeffer made the point that "just because we can do this, technically, doesn't mean we'd recommend it to our customers." Indeed, he'd go out of his way to advise them against moves which, in Sendo's view, would not be productive.

Well, what about email?

The Sendo X phone has a pretty basic email client, capable of running up to six accounts. It has the ability to use IMAP mail, not just POP3 - which gives the user the option of only downloading mail which they want (to pay for!) over GPRS, and reading the rest when they get to a proper Internet connection.

Andrew Wyatt again: "Email on mobile phones is fairly basic in today's terms, but as our survey shows, people do want to use their phones and smartphones for email. So the question remains: if email is such a big problem today, how can we expect other functionalities of smartphones to be used?"

The phone providers don't stand a chance. As an example, take the famous example of the modem driver for the Orange SPV. It's a bit of software provided by Orange in the box, on the CD with every SPV - and all it does is allow you to use the phone as a modem, so that you can connect your PC to the Internet.

It's an incredibly limited piece of software; a modem driver. It ONLY works under Windows XP. It's provided by Orange itself. And yet the file itself has been one of the most popular downloads from NewsWireless.Net - and the article describing how to make the driver work remains one of the most-read items on the site. That's because if you actually call Orange and ask for the file (for example, if you've lost the disc) the tech support people are not going to admit to knowing anything about it. They aren't trained in the complexities of setting up the phone as a modem; it takes too long to explain, and the chances of the install going flawlessly are close to zero.

Orange is very far from the worst phone operator as far as support goes. It's not incompetence or idleness or a desire to short-change customers that causes this problem; it's a simple fact that the phone operators are attempting the impossible.

Go back and look at Bubley's point about Total Cost of Ownership figures. A notebook PC is more expensive than a smartphone - a bit, anyway. You can get a perfectly ordinary Dell Inspiron notebook for just over £700; the new Sendo X will cost 500 euros without sponsorship.

So where does the rest of the difference between the $3,000 derived by Gartner for a notebook owner, and the other figure quoted by Bubley - $500 - for a phone owner, come from?

It can't be the complexity. A PC notebook is, to be sure, a complex beast, but the corporate IT support centre knows how to minimise costs. There's a single "disk image" held centrally, which is loaded onto every corporate PC - so when something goes wrong, there's a limited number of possible causes. There's a very strict set of acceptable use requirements, stating what software the corporate user will (and will not!) use. There are rigorous, enforceable policies about downloading other material, from music to "entertainment" onto an office machine; there's an enforceable anti-virus policy, and the whole thing is managed centrally.

That costs money, to be sure. But then start looking at the tricky stuff. Suppose your employee wants to use email. Easy: there's one provider, the corporate Exchange server. If something goes wrong with that, it's the work of moments to fix.

Now consider the phone.

Inside the corporation, each employee typically has their own phone. It's one they bought because they liked it. It may run Symbian; it may also run Palm OS, or it may be Microsoft Windows Powered - it may even be Linux based. It will have the ability to download (and run) Java apps.

If the user can unlock the phone, it can run third-party software from any old source.

None of the data flowing through the phone is monitored, stored or backed up by the corporation unless they are users of something like Afaria from Xcellenet - and even there, it's clear that the support costs of the mobile smartphone are not an order of magnitude less than the support costs of the notebook. Slightly lower, perhaps; but $500 compared with $3,000? Never.

About the only thing that phones are not prey to, is the virus storm that plagues PCs - and it can only be a matter of time before that changes, too.

So who carries the can?

Theoretically, the corporate support system must take responsibility for managing corporate equipment. In the real world, I don't know a single IT department which is suffering from the problems of "too many resources, too much budget" and if they were asked to assume control of the corporation's cellphone fleet, they'd simply have to say: "We can't." Not only are they not expert in managing the four different operating systems but also, they aren't (usually) expert in the problems of wireless. Ask them what "provisioning" means, and they'll probably think you're talking about donuts and coke for a hard evening re-installing the server.

They'll take the view that they take today. They'll say that they need to cover the $500 notional TCO of a smartphone or PDA, and ask for budget for that; and anything outside that simply won't get fixed; it'll be the user's problem.

That works just fine with early adopters, who are the sort of people who not only read the manuals, but join user forum discussions and search for solutions to intractable problems. It won't work with people who expect "dialtone simplicity" from something that "just works" like a phone is expected to work.

So the phone operators will be expected to cope.

"With the growth in smartphone sales, network operators face the prospect of a disastrous 'triple whammy' of rising user support costs, user frustration, and lost revenues," said Wyatt, "unless they are able to manage users' devices much more effectively - and pro-actively."

Intuwave advises the mobile industry to be more proactive. It's something Intuwave itself believes it can do. "We provide customers - handset makers, network operators, enterprises, system integrators, enterprise application developers, and independent software vendors - with a series of innovative products that fully leverage the mobile data value chain," is the company's boast.

Far be it from me to doubt this claim in any way! - but there's a limit to what they can achieve. You can't break the laws of physics, and if you want to stay in business as a phone operator, you can't break the laws of profit and loss, either.

Wyatt believes that one way forward, is for phone operators to turn support from a cost centre into a sales arm. "Typically, in most businesses, the marketing and support organisations are siloed; they don't talk to each other. End to end service will never work in that case." By contrast, he recalls a previous job with Lotus where the original spreadsheet, Lotus 1-2-3, had a problem with printer drivers. "We took that printer driver support department, which was the target of everybody's scorn, and gave it the mission of not just trying to sort out printer drivers, but use the interface to sell upgrades, new features, and so on. They broke every marketing target we set them."

So we face the future where, when our phone breaks down, we dare not trouble the sulky lions in the IT department, and if we ring our phone operator, we'll be subjected to all sorts of "special offers" for upgrades, and ways of increasing the amount we spend. That, or accept that our phone is, after all, not the ideal way of managing email, and use it for talking.

That would certainly make life easier for us, users. Whether it does anything for the network operators and their dream of "increasing ARPU" is quite another matter.