Palm Realignment Plan Could Cause Confusion

Palm Inc.'s plan to divide the company into two distinct and specialized business units for better focus-one for the operating system and another for hardware-could actually create more confusion.

Palm Inc.s plan to divide the company into two distinct and specialized business units for better focus—one for the operating system and another for hardware—could actually create more confusion.

At the heart of the conflict is the issue of software development and support. The split, set to take effect later this year, places corporate developer programs under Palms software subsidiary. However, at the same time, the hardware subsidiary is gearing up to sell hardware and pre-packaged third-party software to enterprise customers.

"Customers highest level of frustration has to do with having to deal with multiple players," said Michael Steinberg, president of the New England Palm Users Group in Cambridge, Mass., whose corporate background is in business-to-business sales. "Most major customers like to have a major point of contact."

Nevertheless, Palm officials are sticking by the new alignment and both subsidiaries have new programs in the works, officials said.

On the OS side, Palm is looking to cater specifically to developers in large corporations who design company-specific Palm applications for their employees.

"Theyre not interested in power-app marketing," said Gabriel Acosta-Lopez, who heads up Palms developer community. "The enterprise folks are more interested in training, so theyll receive discounts on training. And theyre also interested in consulting services."

Palm also has plans for consulting services that should launch in the next six to twelve months, which comes as troubling news to current business partners who already offer such services.

"I think thats a mistake," said Fran Rabuck, an eWEEK corporate partner and practice leader for mobile computing at Alliance Consulting, in Philadelphia. Alliance partners with Palm to help corporations mobilize their employees. "They have always touted the Palm economy, but if they take a slice out of that, the loyalty factor starts to slip away."

Steinberg said developers would likely welcome such services.

"Developers have been frustrated with the lack of support," he said. "Palm is trying to change that."

In the past, Palms enterprise efforts have been focused mainly on partnering with Fortune 100 technology companies that serve enterprise users and co-marketing hardware and pre-packaged software with them.

While the software group is parting with that model, Palms Enterprise Business Development Group, which eventually will fall into the hardware subsidiary, appears to be sticking with it.

This week, Palm announced a deal with customer relationship management software leader Siebel Systems Inc., in which both companies will sell new software from Siebel that runs on devices that support Palm OS. Siebel Sales Handheld 7 is the mobile version of Siebel Sales 7, a Web-enabled sales force automation application that customers use for such tasks as managing contacts, tracking deals and forecasting sales. The software will be available in the first quarter of next year, officials said.

Palm will market the software. Service and support will come mainly from Siebel, said Laurie Wood, director of the Enterprise Business Development Group. But she added that Palm needed to be able to provide support for third party software it sells, too.

"My team often raises their eyebrows when I tell them this, but they are responsible for the full life cycle [of a product]," Wood said.

In the past, this has meant working with the software side of the company to gain expertise. This may not be as easy to do when the company splits into two subsidiaries; the OS side of the company cant favor one licensee over another, and that includes the Palm hardware subsidiary, officials said. But Wood said she still hopes to work closely with the OS developers in the future.

"One of our greatest support elements of this company has been [Acosta-Lopezs] team," she said. "My team doesnt have the technical depth or the coding experience."