Will Your Customers Take SMS into Their Own Hands?

As SMS explodes in the wireless world, we’re seeing all sorts of innovation to take advantage of this. Last year’s launch of Multi-Tech Systems (www.multitech.com) SMSFinder product was one of these interesting approaches – a hardware access device approach to sending and receiving SMS.

The SMSFinder is a relatively inexpensive ($999, $700 street), turnkey SMS gateway for small/medium businesses. Just add a GSM SIM card and a messaging account with a carrier and any SMB can begin to leverage two-way text messaging with its clients, partners and within its own employee base. It’s easy to set up, easy to manage, and easy to use. I can import up to 20,000 names to send messages to.

Multi-Tech has now opened the box to applications developers via a built-in HTTP/TCP API. The world runs on APIs these days, and this move by Multi-Tech starts to put a different face on a box that heretofore was limited to outbound calling. Now you can do two-way messaging.

The first question: Does this lower end, hardware-based approach really make sense for small businesses in the face of network-based and API-driven services like those offered by Clickatell (www.clickatell.com) or direct email-to-SMS transmission to each carrier? After all, Clickatell is disgustingly easy to get set up, easy to use, and it’s relatively cheap compared to traditional carrier alternatives, depending on your volume. And email-to-SMS gateway options work, as long as your email gets there and they don’t cut you off for spamming their servers.

The answer is a pretty straight forward cost analysis: “Can you save enough money in using your own SIM card to recoup the hardware cost?” The key factor is the carrier’s service used. Consumers, for example, can pick up unlimited messaging packages for about $20 per month (on top of a voice package – so maybe the total spend is $60 or $70 per month). Clickatell’s retail rates start at about $0.05 per message and go down. So if you can use an unlimited messaging option, if you send more than 1400 or so messages a month, you start “making money” to pay back for the hardware. If you create a family plan with your present service and add another “phone” for $9.99 and then buy unlimited SMS texting on it, you can get by for a lot less, in the $20-$30 range per month. That drops the breakeven even lower.