Selling the Joy of Text

Any comedian can tell you that good timing can mean the difference between killing and bombing. Lenny Bruce, Bill Cosby, Richard Pryor, Jerry Seinfeld — all the greats understand rhythm and know precisely when and how to deliver a punch line. Even though the best timing in world can't deliver hacks like Carrot Top or Louie Anderson from mediocrity, the concept is universal. It even extends to the wireless space, where U.K.-based messaging software developer Gordano believes the time to add short messaging service (SMS) to its suite of products marketed in the U.S. is now.

The SMS feature is integrated into Gordano's e-mail package, allowing end users to receive e-mails or calendar alerts directly to their wireless handsets. Gordano is providing SMS at no additional charge in hopes that the new functionality will boost messaging suite sales — and because U.S. customers aren't quite sure what to make of SMS just yet.

“People don't understand how useful SMS is until they use it, and that's a tough wall to break through,” said Brian Dorricott, Gordano's managing director and CEO. “IT managers think it's just one more thing to manage, and that's a barrier.”

SMS has taken off in Europe, however, and its success is owed largely to young people who used the service to pass notes back-and-forth in class, Dorricott said.

The service migrated next to the adult community and established a significant following once users figured out that SMS can be used in situations in which a voice call may be inappropriate, but the message is considered important enough that it can't wait for the recipient to get back to his or her computer to access e-mail.

For instance, imagine a shopkeeper who wants to update an interested customer with a price or the availability of a product or service. If the shopkeeper doesn't want to bug the customer with a phone call, but wants to get the info into the customer's hands as soon as possible to clinch the sale, SMS is the answer, Dorricott said.

“It fills the gap between voice and e-mail,” he said. “It's more urgent than e-mail, but not as intrusive as a phone call.”

Demand for the service across Europe grew rapidly — so fast that it took everyone a little by surprise, Dorricott said. The reason, according to Andrew Cole, who heads up the wireless practice for Adventis, is because GSM became the standard throughout Europe and SMS was built into the GSM protocol. “European carriers never really had to market SMS,” Cole said. “It just happened through a grass-roots movement.”

Regardless of whether it was by design or accident, SMS developed into a significant revenue generator for European carriers, which, according to Cole's estimate, account for about 14% of their revenues. “There's clearly a need for it and carriers need to focus on it,” he said.

Dorricott said that now is the time to hit the U.S. with SMS because the interoperability issues that prevented subscribers of competing wireless carriers from messaging each other mostly have been solved. But Cole isn't convinced. He said the U.S. wireless industry is still trying to work out the kinks, a process that has been complicated by multiple protocols and the fact that interoperability is still several months away. He also said billing issues would get in the way of a successful implementation by U.S. carriers.

“Bucket billing makes it difficult to monetize the service,” Cole said. “Also, carriers have trouble billing their own customers on a per-usage basis. To do it for other carriers is out of the question.”