The Bloor Perspective: the future of SMS, Siebel and open source .Net

The month of May was an exceptional one for the text messaging industry, according to the Mobile Data Association (MDA). Person-to-person messages totalled 1.38 billion, a rise of more than 45 million over April 2002. This represented the tenth month in succession for text message volume surpassing the billion figure.

Breaking it down into day-to-day volumes, the UK public sent more than 45 million text messages every day through May 2002. This compares with just 30 million during the same period in 2001 and, in May 2002, this meant volume across the four UK GSM networks tripled in only three years.

The MDA even expects June to trump May thanks to the combined effect of the World Cup, the Jubilee and, believe it or not, Big Brother.

That's it then. Text messaging is here to stay. Sort of. While the text message vendors are trying to keep the market buoyant by building new innovative solutions, like the rather tiresome introduction of multimedia messages, the real world is actually trying to find something useful. Text messages, while good for having a sneaky conversation at an inappropriate moment, are hardly a good value, useful tool.

What's next? Looking at the deal signed recently between IBM and Palm we can gain a few insights. One of the first products this pair will be touting for the interconnected, enterprise-enabled Palm, will be instant messaging. For those that haven't used this kind of thing before, it's simple. The sender and user have a live link to each other through their respective devices. They can type into it, appearing in real time on the recipient's device and they can transfer files and all sorts of other handy add-ons.

This is where text messaging should head. It provides real solutions, real functionality and real communication, for that matter. It's a considerable step-up from current text messaging - and a much needed one.

Ultimately instant messaging is going to be a whopper. Let's hope the MDA is on to it.

*Siebel's quandary*

Siebel has shown signs of a serious slowdown in the CRM market. The company's second quarter figures were down substantially. Net profit was $29.8m, a drop of more than 60 per cent on the corresponding period last year. The next steps to recovery will see the firm slashing headcount as it scrambles to boost its profits.

Siebel's revenues for the second quarter of 2002 came in at $405.6m, a drop from the $477m booked in the first quarter of this year. Licence revenues proved the real bug-bear, however, dropping 30 per cent sequentially to $170.1m - a drop of 41 per cent year-on-year.

This is what really concerned the financial markets. The drop in licence revenues was greater than that experienced by either Oracle or SAP and more than the industry average. It was made worse by Siebel providing few details about its prospects. Certainly it said it hoped for better times but didn't discuss the pipeline - which is obviously critical to making predictions.

With all these problems Siebel is responding in kind with a headcount reduction of about 1,100 staff. That will take the total number of Siebel employees down from 7,100 to 6,000. It's a big cut. Siebel has tried to hold off doing this for some time now and it can't go on any longer if it wants to bring profits back in line.

There was some good news in the form of 200 new contracts signed, sealed and delivered during the second quarter. Fifty-one of these were for more than $1m dollars, which was a slight drop on the previous quarter, and only three for more than $5m, down from 12 for the previous quarter.

But that didn't shed a lot of light on the problems the firm is suffering. Is it just economic uncertainty or is it something more fundamental? The CRM market has been a strange one in its development and, to the untrained eye, it may still look rather immature. However, it could well be the converse, with maturity and sequentially lower sales marking the evolution of the sector. Either way, people will be watching the next results very carefully indeed.

*Open .Net?*

The project to develop an open source version of Microsoft's .Net was to report progress at the O'Reilly Open Source Convention (OSCON) in San Diego. Project Mono was initiated last year with the aim of developing an open source version of the .Net development platform and is led by Ximian, one of the leading open source development companies.

The main driver behind Project Mono was that it would enable developers to rapidly deliver .Net compatible software on Linux platforms. The Mono framework includes a C# compiler, and class libraries compatible with Microsoft's CLI that enable developers to build end user applications and web services.

At the core of the framework is a Common Language Run Time 'just in time' run time engine which allows Linux-based systems to run .Net applications that have been built on Linux, Unix or Windows platforms.

Since the project was announced at last year's OSCON about 10 Ximian developers have been working on the framework and there have been nearly 100 contributions from outside developers. So far over half a million lines of code have been cut.

The first deliverable will be 'Mono Core', pencilled in for later this year, which will mimic the .Net Framework for the Linux and Unix operating systems. There is still much work to be done but so far the team has completed a JIT (Just In Time) run-time engine and a self-hosting C# compiler. Both of these products will be demonstrated by Ximian's chief technology officer, Miguel de Icaza, at Oscon.

So far, the web services market is still warming up with every vendor having some form of pitch to try and entice end users. Ximian's main business is to enhance and develop the Linux platform for the end user and its move into the .Net fray is a welcome diversion to the Redmond giant's usual attempted dominance at anything it touches.

The task is not easy. There are some aspects of .Net difficult to implement on other platforms such as Windows Forms, which are Microsoft APIs. The Project Mono group is not daunted by the scale of its task and must be commended for taking Bill et al head on in an area that Microsoft hopes to use to control the world's applications.

**Bloor Research is a leading independent analyst organisation in Europe. You can find out more at http://www.bloor-research.com or by emailing mail@bloor-research.com .