Motorola gets serious about the enterprise

Why did a handset maker splash out $3.9bn to buy a company that has created bar-code scanning technology? It's all about the enterprise, says Jo Best.

Motorola's acquisition this week of mobile tech and RFID player Symbol looks to be the start of a grown-up, suit-and-bowler-hat Motorola.

According to the analysts, the acquisition is a canny idea from the world's second biggest handset maker. It allows the company not only to expand its distribution channels and customer base - Symbol's is larded with blue-chip types - but also to broaden what it can sell into enterprises.

Dean Bubley, founder of Disruptive Analysis, says: "Just having a device pitch doesn't really fly - Symbol has a much more integrated approach. Now Motorola can be an enterprise solutions player."

William Clarke, research VP, enterprise communications applications at Gartner, agrees.

The Symbol buy, says Clarke, is Motorola making sensible provisions for the eventuality that its device business, which is currently pouring cash in the company coffers, should find itself in a fallow period. If that should come to pass, bolstering its relatively small enterprise business would be a boon.

He says: "If you look at it, [Motorola] is divesting a lot of things - automotive, their semiconductors unit - and it's good in that it allows focus but they've lost a lot of market share - the wheels have come off their networking business."

Acquiring Symbol should help Motorola get those wheels back on. Symbol's wireless offerings were doubtless a draw for Motorola and can do no harm in sorting out the company's future beyond cellular.

Stan Schatt, VP at ABI Research, told silicon.com: "Motorola is one of the leaders in combined wi-fi and cellular handsets and it's an area where Symbol has been involved, so there's synergy there."

While the network operators see just how far they can stick their heads in the sand about the threat omnipresent wi-fi and the like pose, Motorola has embraced the brave new world like a thirsty man and a beer.

The company is already throwing its weight in no small measure behind the long range wireless broadband technology known as WiMax. The handset maker is working with the tech's chief cheerleader Intel and supplies US operator Sprint with the kit to gets its WiMax network off the ground. Meanwhile Symbol sells switches that operate with the whole spectrum of spectrums, cellular and WiMax among them.

According to Richard Webb, directing analyst for wireless at Infonetics, Motorola's Symbol buy is a sign it believes in a wholly wireless future. "The acquisition of Symbol is focused around Motorola's belief that everything is going wireless and gives Motorola a complementary strength in enterprise WLAN to their portfolio of other wireless technologies, which includes cellular, mesh, and canopy wireless broadband [WiMax]," he says in a research note. "Few other vendors can claim to rival that kind of position in the next generation wireless arena."

The acquisition also poses questions over how Motorola's software strategy will shape up. The company recently committed to moving 50 per cent of devices to Linux within the next couple of years, although it has had a high-profile dalliance with Windows Mobile for its enterprise-focused handset, the Q, aka the 'RazrBerry'.

Courtesy of Symbol, Motorola will also find itself with a brand new service - mobile device management, whereby IT staff can access a device remotely for upgrades or wiping sensitive data should it be lost.

Although such capabilities are traditionally supplied by middleware companies, handset makers are waking up to the potential. Nokia updated its own service, which it sells to carriers, and HP has similar products for its smart phones and laptops.

Analysts agree that Motorola's decision to jump on the device management bandwagon is a wise one. Gartner's Clarke says: "It's Motorola's chance to move up the value chain."

While the Symbol acquisition may be one of Motorola CEO Ed Zander's shrewder moves, challenges remain. Networking giant Cisco targets the vertical markets and customer types that made Symbol so attractive. And it could prove difficult to integrate both the businesses and their software roadmaps.

Symbol itself is far larger than Motorola's enterprise unit so Symbol will in some senses be running a part of Motorola - yet question marks still hang over how much Motorola will boss its acquisition.

ABI Research's Schatt says: "There's a question over what degree of autonomy Motorola will give Symbol. Symbol has been very successful and has a very strong set of resellers. How will this change effect the channel? Will partners remain happy with Symbol?"