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SMS vs. mobile email: Which is the 'killer app'?

SMS -- yes, what your kids call text messaging -- is widely used in the enterprise. But can SMS surpass mobile email?

Maybe the kids are on to something.

Day in, day out, pre-teens and teens bombard friends with text messages, flooding in-boxes and inching up cell phone bills at 10 cents a pop. But it appears the kiddies may be early adopters of a technology that some experts suggest may be more valuable to enterprises than mobile email.

Short Message Service (SMS), more commonly known as text messaging, is getting more use than mobile email. And although that use may not be ringing mobile email's death knell, it may open some eyes among enterprise network engineers.

Kathryn Weldon, an analyst with Current Analysis, said there are several obvious reasons why SMS is a more attractive alternative for mobile communication. One driver for SMS is its availability on pretty much every cell phone sold -- high end or low.

"It makes a lot more sense for certain field positions [where mobile email could be considered] overkill," Weldon said. Warehouse and manufacturing plant workers may not have a need for mobile email, she said, but there still could be instances where they need to receive information quickly.

Actually, the use of SMS vs. mobile email is to some degree divided along class lines, with mobile email preferred among white-collar executive types, while the blue-collar workers in the field are quickly zapping and receiving short messages.

SMS is more limited than email, however, since each message can contain no more than 160 characters. Some service providers are waking up, though. Weldon said certain carriers are offering a sort of "SMS on steroids" that can handle up to 500 characters per message.

SMS is also inherently cheaper. For mobile email, a company needs a server, a slew of devices, and licensing agreements. SMS can be built into typical cell phone plans. Some plans offer unlimited SMS for a fixed price or charge roughly five to 10 cents per message sent or received.

Some are comparing it to the alphanumeric pagers of yore.

"If you're doing pager replacement, it makes perfect sense," Weldon said.

Daniel Taylor, managing director of the Mobile Enterprise Alliance, agrees that SMS has its niche, but not as a two-way form of communication. Instead, he said, sets of applications that rely on SMS for sending information could keep the short bursts of communication alive.

"It's very easy to envision a world where SMS remains a mainstay for mobile applications," Taylor said, adding that most IT managers want to avoid back-and-forth messaging from field agents and workers. Instead, sending out automated messages or integrating SMS into applications to send information and updates to workers may be more suitable.

"The last thing they want is someone calling back to a dispatcher five times in an hour," he said. "[SMS] can really focus in on the applications, and you can build applications around it. Managers can be alerted by SMS when something happens, like when a worker goes out of a certain range or when a truck hasn't moved for a long period of time."

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SMS would be more useful for field workers who frequently get dispatched to job sites. Instead of sending that worker an email, waiting for him to read it, and then waiting for a response, an instant message is sent telling him where to go and when.

"Technically speaking, it already is the killer mobile application," Weldon said.

But Cliff Raskind, director of wireless enterprise strategies at Needham, Mass.-based Strategy Analytics, said that although it appears that enterprises around the world are spending more money on SMS, the mobile email fire isn't ready to fizzle out just yet.

"I don't think the mobile email frenzy is going to die down any time soon," Raskind said.

The allure of email, he said, is that it can transcend both the fixed and wireless worlds. SMS is simply wireless, and more limited than email.

"People have access to email in their fixed world, and they want to keep that access when they're mobile," he said, calling mobile email a "Jack of all trades."

Also, because SMS is available on pretty much any cell phone, Raskind said, it becomes tough for IT to manage its use and create policy governing what employees can send over the air.

SMS nevertheless represents a solid portion of wireless enterprise revenue in North America, he said. This year, it will hold 46% of wireless enterprise spending, while mobile email is roughly 27% of the overall $5.6 billion pie.

In North America, more than 31 million will use SMS by the end of 2006, whereas just over 5 million will rely on mobile email. SMS will continue to dominate through 2009, though email will start closing the gap. Nearly 38 million users will be sending text messages by the end of 2009, while close to 16 million will use mobile email.

On the revenue side, SMS will still show strong numbers, growing from $2.6 billion in 2006 to $3.7 billion in 2009. Mobile email will see more growth as well, jumping from $1.5 billion to $2.6 billion over the same period.

"SMS still is a really important cash cow," Raskind said.

And with SMS being inherently cheaper than mobile email, it may still represent a relevant and cost-effective means of communication for certain users.

"It's definitely a revenue generator for the carriers, and it's very easy to use," Taylor said. "But it's really a function of price more than anything else."

Raskind added: "There are segments that are going to be looking at mobile email down the road who just can't justify the cost. But there will be a lot of users four to five years from now who can find a use for mobile email over SMS."

Raskind was also quick to point out that with SMS – though it is tough for IT to manage -- there are still some areas where it is still used.

"SMS isn't a complete outsider when it comes to wireless IT," he said. "There are certain line-of-business applications and CRM applications that use SMS as an alert mechanism."

But despite SMS's impressive market share and strong presence in the enterprise, Raskind notes that it may not take on the "killer app" role.

"SMS does not have the legs that mobile email does," he said. "It's still experiencing a modest growth rate within the arena of business." But its market revenue is expected to increase by only about $2 billion by the end of the decade, growing from $13 billion to $15 billion globally.

Mobile email, on the other hand, "will see much more aggressive growth," he said.

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