Geoworks Corp. announced the latest stage in its continuing transformation last week with the
introduction of a consulting division called the Professional Services group.
The business unit was created to
provide software development, strategic consulting, project management and quality assurance consulting services to
the wireless industry. Nokia Corp. was named its first customer.
The company also appointed a new president and
chief executive officer-Dave Grannan, formerly vice president of marketing and business development. Former
president and CEO Dave Thatcher resigned. Jeff Peterson was named vice president of the new group.
With the
creation of the Professional Services group, Geoworks is distancing itself from the company’s original focus of
designing operating systems for mobile phones. Rather than place its operating system in competition against other
mobile handset operating systems, Geoworks now will try to help others create their own.
The Professional Services
group is a survival tactic for the struggling Geoworks, which was close to going out of business when its operating
system business lost popularity.
For a time, Geoworks looked like it could become an industry powerhouse. In early
1997, its stock value was in the mid-$20 range and it enjoyed a secure relationship with handset manufacturers Nokia
and Toshiba Corp. Its GEOS operating system was one of the only operating systems developed for the smart-phone
market, a relatively new concept at the time. The GEOS system was used in Nokia’s 9000 and 9000i Communicator
lines and won many accolades for its ability to bring Internet content to wireless phones.
But the good times ended.
Geoworks’ stock began shrinking in value to $7 in March 1997, where it stayed with minor fluctuations for the
remainder of the year.
This June, Geoworks was dealt a major blow when its biggest customer (in terms of revenue)
Nokia, teamed with L.M. Ericsson, Psion plc and Motorola Inc. in the Symbian initiative-a group formed to create
wireless handsets with Internet connectivity based on the EPOC operating system. The company’s stock dropped
further, to $3, and continued down to an all-time low of $1 in October.
Geoworks took another hit when software
giant Microsoft Corp. announced its intentions to enter the space by creating its own operating system for wireless
handsets, a thinner version of Windows CE.
These newcomers commanded much greater resources than Geoworks
could ever hope to match, let alone exceed. To compete directly against these giants would have been
suicide.
“It was clear that there were going to be a lot more players and more competition,” said Bob
Bogard, Geoworks public-relations manager. “If we wanted to exist strictly as an operating system company, it
would have been much more difficult. By diversifying, we are able to maximize our chances of revenue coming
in.”
In other words, if you can’t beat ’em, join ’em.
The first stage of diversification materialized when
Geoworks introduced a new product, the Premion Interface+, a graphical user interface that could run over any
operating system. The November announcement sparked an initial jump in the company’s stock price, to $5.68.
The
Professional Services group is the next stage.
“We’re going to companies, whatever the operating system used,
and offering our services, for a fee, to guide their process through.”
In doing so, Geoworks hopes to salvage
its 15 years experience in the operating system field. Although Geoworks will continue to market its GEOS operating
system, the product now plays the least important role at the firm.
“The key to this is time to market,”
Bogard said, adding that Nokia or other handset manufacturers may get to the market first by making use of Geoworks’
OS experience.
There is some speculation the Professional Services group was initiated by Nokia-the idea being that
while Nokia sided with Symbian’s EPOC, the company also wanted Geoworks’ intellectual property to make EPOC
more scalable.
Officials at Geoworks, however, insist the Professional Services group arose independently.
“This involved jointly working with Nokia,” Bogard said. “But even if Nokia hadn’t joined as the first
customer, we still would have created the division.”
Geoworks stock rose to $5.28 following the
announcement Jan. 12, up from the $3.50 price it was trading at early this month. At press time, the stock was trading
at $5.
