The next big battleground in the increasingly competitive ISP market will be the same as it always is: e-mail.

by Gerry Blackwell [December 11, 2007]

ISPs have provided e-mail service almost from the beginning, but portal and search engine providers such as Yahoo have upped the ante recently by introducing webmail services that exploit AJAX (Asynchronous JavaScript and XML) to deliver a richer e-mail experience and advanced features such as push mail.

Funambol, a Silicon Valley firm with origins in Italy, says it can help service providers go one better. ISPs can use the company's open source e-mail platform to offer subscribers BlackBerry-like mobile push mail and calendar and contacts synchronization.

"What's going on in the [ISP] industry right now is this whole webmail replacement cycle," says Funambol vice president of marketing Hal Steger. "To compete with Yahoo, ISPs have to have AJAX e-mail. And to make them really competitive, they need PIM [personal information management] functionality too—synchronization of contacts and calendaring."

Funambol has already sold carrier edition licenses to two major ISPs: Earthlink in the U.S. and 1&1, the world's largest webhost, a subsidiary of German-based international ISP United Internet AG.

Earthlink will use the Funambol technology to improve its address book synchronization service. 1&1 is using it to offer a full mobile push e-mail and PIM service—in Germany initially, and then in the U.S. and other countries later. Its installed base is 72 million e-mail account holders, half of whom don't currently use their 1&1 mailboxes, but might, the company believes, if they could get mail pushed to their mobiles.

"It just so happens that 1&1, the biggest webhost, is doing it now," Steger says. "But in a quarter or two, I think you'll see the number two, three, four players do something similar. They'll have to or they won't be competitive."

Funambol attended ISPCon recently and talked to "dozens" of ISPs. "They're all feeling the heat [to upgrade and improve their e-mail offerings]," Steger says. "Many will be buying our software."

ISPs and webhosts are not the only targets. The company is talking to portal providers as well and says it will announce a deal in January with "one of the three largest in the world." Steger says it has already signed a $1-million deal with a major mobile handset manufacturer to pre-load Funambol client software on its phones.

Enterprises can also use the technology and "hundreds" have already downloaded the free source code, Steger says. The company doesn't make any money from enterprise customers who use it to develop their own e-mail/PIM applications.

The origin story
Funambol (usually pronounced foo-NAM-buhl) started as Sync4j, an open source project to create a handset-agnostic mobile synchronization platform. Its starting point, Steger says, was the realization that mobile application developers faced a tough task compared to desktop developers because of the plethora of handset operating systems in use.

Today there are an estimated 3.3 billion cell phone users on the planet and the number of different devices and operating systems is "mind boggling"—with "dozens or hundreds of new models coming out every quarter."

Sync4j leader Fabrizio Capobianco and his partners sourced funding and launched Funambol as a for-profit enterprise in 2005. The name, from Latin, means tightrope walker, because the company is "balancing the needs of commercial customers and the open source community," Steger explains. Capobianco is now company CEO.

The first commercial offering is the push e-mail/PIM software, but the technology could be used for other synchronization applications too. The company sees its mission as bringing AJAX-based Web 2.0-style applications to the mobile realm. It refers to the first product as a "Mobile 2.0 messaging."

Can Funambol compete with already well-entrenched push e-mail services/technologies such as Research in Motion's BlackBerry, Visto Mobile from Visto Corp., and Motorola-owned Good Technology Group.

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