Palm to acquire wireless software maker

Looking to boost its appeal among business customers, Palm Inc. said Wednesday it has agreed to acquire ThinAirApps Inc., a privately held New York company that develops software for providing wireless access to corporate e-mail and other data.

The acquisition, to be paid for in Palm common stock, was valued by the companies at US$19 million and is expected to close by the end of the year, the companies said in a statement.

Palm said it already licenses the smaller company’s software, allowing employees in the U.S. to access e-mail, calendars and other functions in Microsoft Corp.’s Outlook from a wireless Palm handheld. The two firms have also worked together over the past year to develop server software for accessing data that’s stored behind a firewall, the companies said.

ThinAirApps’ products also provide access to Lotus Development Corp.’s Domino groupware server, as well as to any IMAP (Internet Message Access Protocol) or POP (Post Office Protocol) e-mail system, according to information on its Web site.

If the merger goes ahead as planned, the acquisition will be a “linchpin” of Palm’s long-term enterprise and wireless strategies, Todd Bradley, executive vice-president and chief operating officer of Palm’s Solutions Group, said in the statement.

Combined with its earlier acquisition of Actual Software Corp., the deal would bring Palm the server- and client-side software it needs to offer an end to end wireless messaging system for large businesses, he said. Acquiring the two firms gives Palm more control over the direction of their products, the company noted.

Palm said it expects to retain most of ThinAirApps’ employees, including its engineering team.

As Palm looks to attract more corporate customers, it’s important for the company to have software that provides wireless access to e-mail and other data kept behind a firewall, said Gerry Purdy, chief executive officer of market research company Mobile Insights Inc., in Mountain View, Calif.

“ThinAirApps has focused on providing wireless access to Exchange and other server software, and it seems expected that Palm would at some point want to get a company that could offer these capabilities out of the box, to better serve its enterprise customers,” he said.

Palm will be hoping the merger is more successful than its planned acquisition of Extended Systems Inc., which was cancelled earlier this year. That deal, originally valued at US$264 million, was to provide Palm with infrastructure software for accessing corporate applications from handheld devices. The companies agreed to call off the marriage in May, citing the weak economy.

The goal of that merger was to provide Palm with software for synchronizing personal and corporate data with handheld devices, rather than software for accessing applications, Purdy said. “ThinAirApps is a much smaller company and one that’s more affordable in today’s market,” he added.

Palm leads the market for handheld computers by most analysts’ reckoning, but faces stiff competition from rivals including Microsoft and Waterloo, Ont.-based Research In Motion Ltd., which sells the Blackberry device. All three companies have been looking to boost their share of the lucrative corporate market, saying they can offer secure access to e-mail and other corporate applications.

ThinAirApps has a handful of competitors, including Mobile Airwaves Inc. and Infowave Software Inc., some of which offer products for both Palm devices and Microsoft’s Pocket PC platform. Microsoft may be better off continuing to partner with those companies rather than acquiring one of them, since an acquisition could put it into competition with its partners, Purdy said.

“I think Microsoft has to be very careful, making sure there’s a platform for ISVs (independent software vendors) and its other partners to make money and build to, and not necessarily putting its partners out of business,” he said.

Palm, in Santa Clara, Calif., is at

ThinAirApps is on the Web at

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