Beaten back by a lackluster economy and ambivalent wireless users, an assortment of veteran wireless data players has sought refuge in the company of network operators. By targeting wireless carriers, these companies are looking to find a stable customer base amid a cutthroat business market.
Indeed, the hardships of two such players-Wysdom and 724 Solutions Inc.-serve to highlight the difficulties many wireless companies have faced since the high-tech meltdown.
Wysdom once sought to be “all things to all people,” said Simi Grosman, the company’s senior vice president.
Founded in 1995 as Wyrex Communications Inc., Wysdom began business as a consulting and systems integration company for carriers including Sprint PCS and AT&T Wireless Services Inc. In 1999, Wyrex spun out Wysdom as a stand-alone company, which managed to raise a significant $63 million in total funding. During the late ’90s boom, Wysdom worked to sell wireless applications, software and services to almost any company that was interested. Wysdom mainly ran up against 2Roam, Aether Systems Inc. and others looking to sell wireless products and services to businesses.
However, Grosman said, the economic slowdown quickly stifled Wysdom’s aspirations. As spending on wireless slowed, Wysdom executives realized the wireless enterprise market could only support a select number of players. Indeed, some of the market’s mainstays-including 2Roam-were forced to shut down. In an effort to avoid a similar outcome, Wysdom decided early last year to convene the company’s business around what it considered a more stable and profitable customer base-wireless carriers.
And, Grosman said, it seems the company made the right choice.
“In the last three to four months we’ve been really inundated with RFIs (requests for information) from mobile operators,” Grosman said, adding that Wysdom expects to reach financial break-even by the end of this year.
Wysdom sells its MAP-OS software product to wireless carriers looking to manage and control their data applications. Grosman describes the product as an operating system for wireless networks. The software works to connect the various aspects of a network-including billing systems, unified messaging services, customer care centers, messaging services, security systems and location and data gateways-ensuring each piece of the network can communicate with other systems. For example, Wysdom’s MAP-OS product can integrate text messaging, location-based services and billing functions so that a user could order a taxi based on location and charge the cab fee to his phone bill.
“The advent of an OS allowed you to add peripherals … without changing anything,” Grosman said. MAP-OS “is very similar to a true operating system. It’s really a true service delivery platform.”
Indeed, Wysdom counts Eurotel Praha in the Czech Republic, Orange Switzerland and TIM in Latin America as customers. Wysdom typically competes with Appium Technologies, Redknee Inc., IBM Corp. and others offering application frameworks to carriers.
As Wysdom was forced to refocus its business on wireless carriers following the high-tech bust, so too did 724 Solutions.
“The financial services companies were not just cutting spending … They were stopping spending,” said John Sims, 724’s chief executive.
Founded in 1997, 724 was one of the first companies to look at the market for mobile commerce. The company started out by selling wireless technologies to financial institutions, which would allow users to conduct banking and brokerage transactions on their mobile phones.
At first the company found major interest-it raised $200 million in its initial public offering in 2000 when it counted Citibank, Wells Fargo and Bank of America as customers.
But, the company discovered, “people don’t change their behavior very easily,” Sims said.
Mobile-phone users found black-and-white, text-based screens unappealing, and 724’s financial customers saw little demand for their mobile products. As banks shut down their services, wireless providers felt the sting. Indeed, wireless players Brokat and W-Technologies were forced to shut down due to the market’s failure.
But 724 found an out. In 2001, the company merged with Tantau Software, and acquired the company’s IP network software and technology. Early last year 724 decided it needed to refocus its business, and used Tantau’s products to go after the wireless carrier market.
Now, 724 offers a wireless data gateway that allows network operators to manage and control data traffic. The gateway manages users’ requests for data, and connects users to content providers. Additional features allow operators to offer multimedia alerts and manage multiple content provider relationships.
“We are that single point of access,” Sims said.
724 counts Sprint PCS and Radiolinja in Finland and Estonia as customers. The company’s competitors include Openwave Systems Inc., LogicaCMG and others.
“We have really refocused the company on the mobile operators,” Sims said.
Whether the company will be successful is still up in the air-724 reported shrinking total revenues and a $3.9 million loss for its first quarter, but also increasing revenues from wireless carriers.
