Modelesis

Last week was marked by two interesting announcements concerning instant messaging (IM).  First, BlackBerry announced that its signature Messenger app is gaining a Channels functionality that comes across as a Facebook/Twitter mash-up, and that it’s coming to Android and iOS this summer.  Later, Google announced their revamped Hangouts strategy to unify and enrich IM across its different platforms and offerings.  In this post, I explore some of the commonalities between both strategies, as well as single out my perceptions about the main drivers behind these changes at both companies.

How Social is IM?

You would expect that IM, being the one app providing direct, real-time messaging interactions with others, would embody the definition and essence of social.  However, it is not the case.  Social these days simply means much more than little text messages.  It’s all about broadcast/multicast capabilities  being able to share rich media, and annotating the text with moods, emoticons and other tools to raise its expressiveness.  To witness, most large social networks have in fact absorbed IM by virtue of having some kind of messaging baked in.  It’s telling that this is just one more feature: nothing too fancy, as long as it works.

However, this is changing quickly, in both directions: the “traditional” social networks are improving their chat and IM modules, and the “chat-only” social networks are looking forward to invade the realm and screen time users devote to the other networks.  This has fueled, among other things, the launch of Facebook Home and the Chat Heads functionality in its standalone applications, as well as the rise of IM ecosystems that bridge the mobile/PC divide and build in more sophisticated features, such as Line.

It is in this light that the launches of BBM Channels, cross-platform BBM and Hangouts have to be seen.  And indeed, some has been written about this already.  But I believe there is a bit more to each side than what can be evidently gleamed.

BlackBerry: It’s All About the Revenue

Yes, you read that right.  A lot of the commentary about cross-platform BBM has been about how BlackBerry is really betting on the strength of the BB10 platform to sell on its own, bringing down barriers to a product that so far has been deemed, not a product that sells BlackBerry as such, but one that certainly helps stem the tide of users migrating off BlackBerry.

However, think about this.  What has kept BlackBerry a stronghold in developing markets such as Indonesia and South America?  My theory: low cost service plans.  By offering bundles for Facebook, Twitter and BBM, BBRY and its carrier partners have been able to lure in customers that need just the essential internet services while on the go, which coupled with a market of cheap second-hand BB devices (this is critical) has helped carriers in these regions substantially expand their user base.  By partnering with BBRY on this, carries avoid having to replicate traffic control and billing functionality that BBRY has had time to effectively master and grow globally (occasional outages notwithstanding).

These subscriptions, and the BBM fees portion of more full-fledged service plans, bring in about 1 billion dollars revenue for the beleaguered Canadian company every fiscal quarter.  And under pressure from Android, iOS and the brethren of free, cross-platform IM alternatives, this revenue has kept more or less solid, but it feels less and less so by the day.  In fact, you can now use BBM and all other BlackBerry services on their new devices without either you or carriers having to pay BBRY a cent for it – a reflection of the market pressure over this business model.

So what do you do?  You enrich the platform, and you open it.  My guess is that by providing BBM on Android and iOS, BBRY will be able to offer carriers the possibility of selling low-cost service plans that bundle basic social tools (Facebook, Twitter, BBM) with a much wider variety of low-cost hardware than the current BlackBerry offerings, while keeping a high degree of control over the resulting traffic and the overall platform.  Heck, if BBM Channels really takes off (at least at BBRY current user base scale), the plan may only imply traffic between BBRY and the carrier, further justifying the deal.  This may provide a much-needed opportunity for sustainable, even if modest, service revenues growth for BlackBerry.

Keep in mind this is only helpful in emerging markets.  You have a lot of low-cost Android there eroding BBRY’s market share; you may as well throw iOS support in for the minimal, but affluent and influential, proportion of customers using iPhones in those markets.  For larger markets, BBRY expects that their pricey Z10 and Q10 devices will help them regain a modest but meaningful proportion of the high-end segment it used to rule.  So the strategy would seem consistent in that respect: sell high-end BB10 devices to the high-end segment, based on the platform differentiation that a few users still ascribe to BlackBerry (security, strong email messaging, “getting stuff done”), and open services to a wider base in the low-end segment, where virtually no one, except perhaps Nokia, can compete with Android.

Consistent, but not guaranteed to work.  Only time will tell.

Hangouts: Empowering Google+ and Taking on WhatsApp

For Google, the story is a lot more obvious.  By their own admission, the IM strategy at the company was badly fragmented and ages behind what the competition has been doing.  But in addition to that, Hangouts is a way to bring in more active usage to Google+.  I find it interesting how this contrasts with Facebook: the blue social behemoth grew a large user base out of offering core social networking features, and is now gradually enriching its messaging proposition.  The red Web leviathan, on the other hand, has built it, but they haven’t come yet; so the idea here is to use a more complete and robust IM solution to usher users into all Google+ has to offer.  The way media sharing works in Hangouts is the most basic example illustrating this.

A particularly interesting aspect of Hangouts to me is having it available on iPads.  So far, the big stars of IM have all been either mobile-only, locked-in to specific platforms, or generic IM clients that cannot be properly exploited for ecosystem integration purposes.  So WhatsApp cannot be run on the iPad (not with any ease, anyway – I think it can run on jailbroken iPads, but I’m not sure), and iMessages is an iOS-only proposition, whereas IMO is a jack of all trades and master of none.  By enabling Hangouts on many types of devices, Google is making the point yet again of making their Web services the actual platform users know and care about.  In order to do this, it must get a strong holding on that staple of modern mobile browsing and overall household internet usage – the tablet, of which Apple is supreme king.

This is also one less thing for Android users to download and configure, being baked right into the platform.  Along these same lines of greater platform integration that this move provides for Google, one expect Hangouts will pave the way to additional credible, stable applications for which GOOG has so far relied on third parties which, in many cases, have not lived up to users' expectations.  A “Find my ' droid”  service comes to mind as something that has been clamored for previously, yet Google has inexplicably still not provided.  There is, however, a thin line to close when providing services that your partners (as in Play Store developers) are somehow providing today.  You need to ensure a solid core ecosystem without scaring smaller shops out of your platform.

The Battle Lines Have Been Drawn

So we’re bound to have an interesting summer watching the large (and not-so-large-anymore) technology companies duking it out over…  IM.  It has become that crucial.  It may help define who actually gets to be #3 in the mobile space, depending on how much traction BBM gains and whether Google opens up Hangouts to Windows Phone, natively or via API (though the way those two have been dealing recently makes this unlikely to happen any time soon, in my opinion).  It may help define who actually gets to be #1 in the social space in the longer run – and here I stress help define, for obviously many other factors come into play there.

Or it may just be another interesting fight through which technology evolves and we all benefit.  It’s IM FTW in 2013 either way.  L8r.