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Dell, Good ally on business handhelds

Start-up Good Technology and the PC leader shake hands on a pact to collaborate on corporate sales and, down the line, to codevelop a handheld device that will bear Dell's brand.

MENLO PARK, Calif.--Dell Computer and wireless start-up Good Technology announced Tuesday they will work together to provide handheld devices and services to business customers.

As previously reported, the two companies will sell Dell's servers and handheld computers alongside Good's wireless software and services under a nonexclusive alliance.

The goal of the partnership is to work toward providing handheld devices that are "as easy to it is to deploy (a PC)," said Good CEO Danny Shader.

Sunnyvale, Calif.-based Good is looked upon as the chief rival to market leader Research In Motion and its BlackBerry messaging devices. Dell has been reselling the BlackBerry device since 1999. Some analysts believe the computer giant's endorsement of Good's technology spells trouble for RIM, potentially threatening the already weakened resale agreement between the BlackBerry maker and Dell.

Dell has risen to the No. 4 market share position in handheld shipments in the first quarter.

During its fiscal fourth-quarter earnings call earlier this month, RIM said that it had more than 534,000 subscribers to its messaging service. Good would not give out subscription numbers, but Shader said more than 750 companies have signed up for Good's software and the service.

The two companies have been embroiled in a series of lawsuits over patent infringement, copyright and trademark infringement, misappropriation of trade secrets, breach of contract and other actions.

Both companies develop and sell devices, software and services for wireless access to corporate information from a handheld device.

Businesses have not adopted wireless devices as quickly as expected, said analyst Tom Sepenzis of equity research firm ThinkEquity Partners. Part of the reason, said John Medica, an executive in Dell's product group, is that previous devices were based on proprietary systems that essentially required companies to customize their networks to work with the devices and services.

Through the alliance with Good, Dell will work to use operating systems and technologies that are used by more than one hardware maker so that the devices and services will be more able to work with a customer's network.

Sepenzis said there was some truth to that, but other factors such as the decline in business spending on technology and the spotty performance of next-generation cellular networks were also to blame.

"This alliance could potentially be a big deal if Dell's (branded) device can sell in high volumes, which would help to bring down the prices of devices and services and broaden the audience for these kinds of devices," Sepenzis said.

Initially, the partnership involves the companies collaborating to sell Dell's PowerEdge servers with Good's messaging-server software, named GoodLink. That effort begins immediately.

In the second half of this year, Dell is likely to begin reselling Good's G100 handheld devices, Medica said.

Next year, the partners will begin selling a jointly developed Dell-branded handheld computer designed to take advantages of next-generation 2.5G cellular networks, he added. The device will likely run Microsoft's Pocket PC operating system and will include GoodLink handheld software. No other details of the device were available.

The announcement was made at an event at the offices here of venture capital firm Kleiner Perkins Caufield & Byers, a major investor in Good.

Dell is the No. 2 PC seller in the world and holds fourth place in the overall server market.