Clickatell, whose technology is used by wireless carriers and business customers to deploy mobile messaging services to end users, is making an aggressive push into the U.S. market starting with its buyout of MultiMode.
The company, which is currently based in South Africa and offers bulk SMS (Short Message Service) and gateway connectivity services in a claimed 170 countries, said the acquisition was aimed squarely at upping its presence in the United States and that it would move its headquarters to MultiModes offices in San Mateo, Calif.
Terms of the deal were not made publicly available because both firms are privately held.
For its part, MultiMode offers wireless technology that allows for outbound, two-way and on-demand messaging to large numbers of people.
Clickatell executives said that the companys ability to help support voice and e-mail communications, as well as SMS platforms, was key to making the buyout offer.
“This should really help us grow in the United States as MultiMode supports a range of messaging systems and U.S. customers are looking for an all-encompassing solution to this question,” said Pieter de Villiers, chief executive of Clickatell.
“We want to become the U.S. leading provider of device agnostic wireless messaging systems and this helps us take an important step toward trying to reach that goal.”
While many carriers and device manufacturers prefer for customers to buy into their own mobile messaging platforms, de Villiers said that companies, especially large enterprises, are increasingly looking for systems that can be set up easily and work with many different types of wireless services and devices.
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Instead of asking employees to turn in their old phones to launch more sophisticated mobile services, the executive maintains that Clickatell customers can work with existing devices right away.
New Applications
Examples of the type of services the companys wireless technologies support range from banks that use the system to send alerts to customers whenever someone logs into their online account, to schools that beam text messages to parents of children who are absent from class, to airlines who use it to inform passengers when a flight is delayed or canceled.
While his company has great success overseas, de Villiers said that the U.S. market remains tied to its roots of services being controlled and limited by carriers and their relationships with certain device manufacturers.
Once people begin seeing other firms use its products to rapidly create new wireless applications on their existing infrastructures, the executive believes that demand for such tools will increase rapidly.
“Most [U.S. carriers] programs today focus on mobile workers trying to get access to the Internet for some small bit of information like a stock quote or a sales contact, but that type of technology wont help enterprises looking to launch sophisticated mobile services on the handheld,” said de Villiers.
“There are a lot of messaging technologies out there, but the reality is that there are very few who tackle applications requirements and end-to-end delivery of applications on the device; beyond that, even fewer like us tell the customer it doesnt matter what types of devices they already have.”
Clickatell and MultiMode have collaborated on messaging and alerting services in the past, including building a worldwide SMS system for database giant Oracle and its customers.
Oracle uses the system for internal messaging and alerting for calendar and e-mail alerts, as well as mobile sales force notifications, IT network events and emergency management.
Company officials said they do not expect any jobs to be lost as a result of their merger.
According to Forrester Research, corporate messaging systems will generate 126 billion individual communications and $8.6 billion in revenue in the United States in 2009, with SMS technology supporting a significant portion of that traffic.
Charles Golvin, analyst with Cambridge, Mass.-based Forrester, said that while new 3G communications applications promise a future that will allow for far more sophisticated communications than SMS, the systems continue to gain popularity, specifically for their ability to distribute information to large amounts of people in a timely manner.
In fact, according to Forresters latest figures, more than 50 percent of all U.S. wireless subscribers polled by the company in 2005 said they used SMS with some regularity, roughly twice as many as reported doing so as late as 2003.
“Theres no question that SMS still has a lot of headroom for growth above it, and the transition into 3G wont negatively impact its growth as it remains a very efficient mechanism for sharing information in a timely manner,” said Golvin.
“You know that someone almost always has their phone with them, so an increasing number of businesses are waking up to the value of that.”
However, Golvin does not believe that SMS has a big future across internal, or “line of business” applications such a field force automation or CRM (customer relationship management) systems.
Those types of applications that demand more memory and offer greater end user interaction will probably use more sophisticated technologies, he said.
“Line of business is more about applications that can be stored on the device and power themselves,” Golvin said.
“Companies are really starting to see the power of SMS as a marketing tool or as a way to share information with customers, but for use internally there may not be as much of a growth opportunity.”
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