Microsoft's Bing search engine and maps partnership with Research In Motion has sparked renewed speculation about a possible acquisition of the struggling Blackberry maker. But while such a deal makes sense on some levels, partners on both sides just don’t see it happening.
The Microsoft-RIM speculation is certainly understandable: RIM used to dominate enterprise mobility, but its market leadership position has been steadily shrinking. RIM's cycle of innovation has slowed in recent years and it's having a tough time attracting developers, in part due to the complexity of building apps for the Blackberry.
Meanwhile, Microsoft is struggling for mobile relevancy despite the largely positive market reception to Windows Phone 7. Some industry watchers feel a RIM acquisition would catapult Microsoft back into a position of mobile relevancy while also saving RIM's bacon.
Yet there are many more reasons why a Microsoft-RIM deal wouldn’t make sense, and following are five examples.
1. The Cultures Are Very Different
There's a reason why Blackberry World attendees gasped earlier this week when Microsoft CEO Steve Ballmer appeared onstage: RIM and Microsoft have had a symbiotic relationship over the years but they're very different from a corporate culture perspective.
"RIM views themselves as innovators and free thinkers. They are known for being very arrogant and have a superiority complex when it comes to wireless technology," said one RIM partner, who requested anonymity.
"They also have strong nationalistic Canadian pride -- it would be a tremendous blow to their collective egos to have an American giant like Microsoft swallow them with cash on hand," the source added.
Steve Beauregard, president of Santa Monica, Calif.-based RIM partner Regard Solutions, also believes a RIM-Microsoft deal would be extremely illogical.
"Culturally, RIM and Microsoft would clash worse than Sean Penn trying to marry Dr. Laura Schlessinger," said Beauregard. "RIM is known by carriers, partners and customers for dictating terms with little flexibility. Microsoft, on the other hand, was among the first to build a channel friendly eco-system of partners."
2. Microsoft Doesn't Want To Get Into Hardware
Microsoft isn't in the hardware business, nor does it want to be. That’s why the software giant is paying billions of dollars to Nokia to develop and promote Windows Phone 7.
Given Microsoft's disastrous experience with Danger, which cost $500 million to acquire and resulted in the widely ridiculed Kin devices, the Nokia deal likely represents the limit of its mobile hardware ambitions.
Then there's the question of what RIM assets Microsoft could even want. "I don’t see any RIM technology that Microsoft desperately needs, and buying market share in the mobile business is very problematic since market share can change in a flash," said Allen Nogee, an analyst with In-Stat in Scottsdale, Ariz.
Next: Development And Technology Clashes
3. Development And Technology Clashes
RIM's BlackBerry architecture is based on Java but the company is now in the process of moving to the Unix-based QNX, which powers the Playbook tablet. Microsoft moved away from Java after Sun sued it back in 2002, so there seem to be a lack of development synergies to justify an acquisition.
"RIM’s Java-based technology would not be harmonious with Microsoft's .NET stack," said one Microsoft partner, who asked for anonymity.
Blackberry originally worked exclusively with Exchange, and Exchange is still its primary e-mail server platform. Again, it's hard to see how acquiring RIM would help Microsoft on the e-mail front. "Exchange ActiveSync provides push e-mail capability for free, so Microsoft investing in Blackberry Enterprise Server would seem ludicrous," said the Microsoft partner.
In light of RIM's struggles with the governments of India and several Middle Eastern governments over Blackberry encryption, a Microsoft acquisition of RIM would also likely complicate those situations.
Another factor: In RIM's e-mail solution, the NOCs have access to e-mail for various countries, so those countries would have to feel comfortable with such an acquisition," said Chris De Herrera, a Los Angeles-based Windows Mobile MVP and editor of the Pocket PC FAQ .
There are other areas where Microsoft's and RIM's views differ technologically: NOC based e-mail architecture also goes against Microsoft’s philosophy about having the Exchange Server communicate directly, according to De Herrera.
"Microsoft generally does not support integration with third party solutions, and when they do so, they do it for as short a time as possible. RIM is integrating with Lotus Notes as an example of the kind of clash," said De Herrera.