RIM offers free BlackBerry Enterprise Server Express to drive revenue

Successful open source vendors utilize business models that build a large user base through free software and monetize the adoption through some other product or service offering. In dated business terminology, the free offering is considered a loss leader whose business case is supported by other offerings in the portfolio.

I’ve previously written that RIM needs to more effectively utilize open source software in its business practices. Well, RIM just demonstrated that it’s learning from successful open source vendors.

RIM introduced the free BlackBerry Enterprise Server Express (BESX), which offers wireless synchronization of BlackBerry smartphones with Microsoft Exchange or Microsoft Windows Small Business Server. While BESX is targeted at SMB customers, RIM still offers BlackBerry Enterprise Server (BES) as a priced enterprise-grade product with additional enterprise-friendly features.

It’s interesting to note that BESX isn’t necessarily being implemented to build a user base that RIM will later monetize with BES. Rather, BESX is an attempt to build a user base that can be monetized through the sale of BlackBerry devices and ongoing monthly fees. This becomes vividly clear when one considers RIM’s revenue sources [PDF].

The Devices category, not surprisingly, represents revenue from selling new smartphones. The Service category represents the monthly fee that RIM receives from carriers for every active BlackBerry device on the carrier’s network. The Software category represents revenue from the sale of packaged software such as BES.

While the Software category represents more than $250 million in fiscal 2009 revenue, a respectable sum by most measures, it contributes 2 percent to RIM’s bottom line. By making BESX free, RIM hopes to make it more cost effective for small businesses to promote the use of BlackBerry devices by their employees. As this occurs, RIM will capture Device and ongoing Service revenue.

Build adoption with free software and monetize adoption elsewhere in the offering portfolio — seems like a very smart decision by RIM.

Follow me on Twitter: SavioRodrigues.

p.s. I should state: “The postings on this site are my own and don’t necessarily represent IBM’s positions, strategies, or opinions.”

This story, “RIM offers free BlackBerry Enterprise Server Express to drive revenue,” was originally published at InfoWorld.com. Follow the latest developments in open source, mobile computing, and BlackBerry at InfoWorld.com.