Aether is obtaining a key wireless ally

Critical Path deal seeks to develop messaging services


June 14, 2000|By Mark Guidera | Mark Guidera,SUN STAFF

Aether Systems Inc., the fast-growing wireless services company in Owings Mills, will announce today that it has joined with one of the largest providers of Internet e-mail hosting services to develop and market a broad range of mobile messaging services for the corporate market.

The alliance with Critical Path Inc. of San Francisco is aimed at establishing an early lead in what is expected to be a highly lucrative but fiercely competitive market: wireless e-mail and document services "anytime, anywhere on any device," to borrow an industry phrase.

The two companies hope to create an electronic mail powerhouse for business customers interested in providing their workers with access to e-mail, company documents, personal calendars, and Power Point and other presentation documents via cell phones and other wireless devices, said executives.

Aether and Critical Path plan to tell industry analysts today that they aim to begin offering a menu of wireless messaging services to corporate customers by the beginning of next year, said executives.

"We look at this as the fastest way to get into the wireless world. Aether is the clear leader in wireless enablement," said Lee Llevano, vice president for wireless solutions at Critical Path.

Evan Deoul, Aether's vice president for wireless Web services, said the venture with Critical Path is a key to getting in position to grab a share of the expected surge in interest from businesses wanting to provide workers with mobile messaging and document services.

Analysts estimate that by 2004 virtually all cell phones and palm computers will be able to have limited access to the Web, with 700 million customers worldwide. Eventually, analysts predict, a sizable portion of the traffic on those and other handheld devices will be in the form of e-mail, instant two-way messaging and notices or "alerts" that a document or other data, such as a stock quote or a memo from the boss, has arrived.

For Critical Path, the deal provides quick entry into this boom market through a partner with a wireless data network to handle the transmission and management of high-volume e-mail and other data via wireless devices that have a modem.

Aether, which lost $33 million on $5 million in revenue for its most recent quarter, believes that the alliance with Critical Path provides a who's who portfolio of potential customers for its wireless data services.

Critical Path customers include online auctioneer eBay, Internet search engine and portal AltaVista, and Latin American Internet service provider, StarMedia.

"Critical Path provides a tremendous channel for us," said Deoul of Aether.

Aether, he said, hopes to first interest current Critical Path corporate customers in monthly subscriptions to Aether's wireless e-mail and messaging services. From there, the company hopes to see businesses on high-end wireless services that address specific business or industry needs.

"This is a tremendous cross-selling opportunity for us," said Deoul.

Both companies also hope to capitalize on a trend in corporate America to outsource management of their e-mail networks.

Llevano of Critical Path said the company hopes the Aether alliance will attract high-profile telecommunications clients, such as WorldCom Inc.

Such a client could bundle Aether and Critical Path services together and then resell them to its own customers.

"That would get us into some very large enterprise customers quickly," he said. "There will be a strong push on our part to get some strong players ramped up and out the door as a way to get others in."

Deoul said the companies plan to make presentations to potential wireless e-mail customers to determine what types of specific services are needed so they can be developed, while developing new technologies to improve and expand messaging services.

The companies hope to have customers signed on to test the services by October, and to begin offering service commercially by early next year.

Shares of Aether rose $3.0625 to $181 yesterday while Critical Path rose $1 to $45.4375.

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