Oracle, Microsoft, IBM, Sybase and others have made a good living selling the back-end software that runs companies' computer networks, from e-commerce software used for building and running Web sites to database software that collects and stores corporate information.
But as more consumers and workers use cell phones and other handheld devices to connect to the Net, the software makers are revamping their business strategies and parlaying their software expertise to target the burgeoning wireless industry.
"This is the hottest area with untapped potential and lots of investments," said John Rymer of Emeryville, Calif.-based Upstream Consulting. "The software companies are racing to supply the enabling software for people to build applications for this thing called m-commerce (mobile commerce), where you can shop or conduct business through a cell phone."
Though the software companies have dabbled in the market in the past few years, their efforts have heated up in the past six months as handheld device sales have boomed.
Oracle and Sybase recently launched new companies dedicated to the wireless market, with Oracle creating a consumer Web portal that allows people to get free information including news, stock quotes and restaurant reviews. Microsoft last month announced a new Windows operating system strategy aimed largely at wireless devices.
Analysts say that traditional software companies, though not generally connected with the wireless industry, are poised to benefit from the wireless boom. Their existing customers, from Web sites to large corporations, need to move their content and services--originally intended for display on PCs and laptops--to mobile devices. And they need the software to do the transformation.
According to market research firm The Yankee Group, the number of mobile phone owners will reach more than 1 billion by 2003, and about 60 percent of those phones will have Net access.
The software makers have similar wireless strategies, with some minor differences. They are creating and developing new wireless software and are furiously forging new relationships with service providers, handheld device makers and consulting firms.
Oracle, IBM, Sybase and Microsoft sell mobile databases that allow people with handhelds and laptops to link to corporate networks remotely. For example, Safeway in the United Kingdom allows people with Palm devices to buy their groceries wirelessly, IBM executives said.
Beyond that, however, their strategies begin to diverge.
Microsoft, which has invested heavily in wireless efforts in the past few years, also sells software for wireless device makers and content that service providers can offer consumers.
The software giant in December began selling Web browsing, email and other software that cell phone makers such as Ericsson, Sony and Samsung are building into their phones. The company also offers a Web version of its Microsoft Network consumer portal site.
MSN Mobile's customers include Nextel Online, a company in which Microsoft invested $600 million last year. Microsoft has also struck alliances with Motorola, British Telecom and AT&T to offer wireless services.
Oracle's new subsidiary, OracleMobile.com, is offering a service that repurposes and hosts content from Web sites and corporations, making all the information accessible on wireless devices. The company also is partnering with European telecommunications company Telia to provide mobile Net services internationally.
OracleMobile's new consumer portal--which competes with Phone.com, TellMe Networks and others--is free. But the company hopes to eventually generate revenue from advertising and a small cut in transaction revenue. The company has already partnered with Amazon.com, eBay and others to gain content for its portal.
IBM is also focusing on both carriers and corporations with its software and services. Big Blue recently inked deals with Internet services companies, such as Razorfish and Agency.com, which will sell IBM's tools for developing and managing content on wireless devices.
Sybase, which spun off its wireless and mobile division last month, is focusing entirely on the corporate market and building new software for businesses that use mobile devices, said Sybase chief executive John Chen. For example, the company recently announced software that can connect Palm and Windows CE handhelds to SAP's business software, such as accounting and human resources applications.
Several software companies say their forays into the wireless arena are paying off. For Sybase, wireless software sales accounted for $76.3 million, or about 9 percent, of the company's $870 million in revenue last fiscal year. The company expects overall wireless software sales to rise 30 to 35 percent this year.
IBM executives said wireless software sales accounted for $250 million in sales last fiscal year. That's small change for a company with $87.5 billion in total revenue last year, but IBM executives say the market potential is huge and believe the portion of the wireless market IBM plays in will reach $83 billion in sales by 2003.
"Last year, the mobile Internet market got hot and the market exploded for us," said Jon Prial, marketing director for IBM's Pervasive Computing division. "The $250 million is a good start, but we expect to get more than our fair share of the $83 billion."
Other players entering the market include BEA Systems and iPlanet, the Sun-Netscape Alliance. Analysts agree the market potential is huge for the software makers. The money is in the software that integrates existing business applications and content that companies have with the new wireless possibilities.
Mobile devices are "becoming central to the future of computing," said Gerry Purdy, president of wireless industry researcher Mobile Insights. Mobile computing is "becoming mainstream when it used to be fringe. We're finally seeing applications that give people defined benefits. "