Competition In The Air

August 18, 2003

BY MICHAEL KRAUSS

Yesterday was one of those days in the air.

Raging thunderstorms at Chicago’s O’Hare International Airport, and I’m stranded at the end of a long day at Boston’s Logan airport. We’ve all been there, whether it’s San Francisco or LaGuardia, St. Louis or Tampa. Crowded terminals. Delays. No dinner. Uncertain departures. No effective way to connect with the office.

I’d spent the day locked up in conference rooms in an office near Route 128 outside Boston. No Internet access. No way to download the large files I wanted to edit. The only communication was via cell phone on bathroom breaks and during the sprint to the airport in the rush hour. No way to replicate. Even leaving the gate area to go to the United Airlines Red Carpet Club for a slow paced wire line download was risky. The plane might depart at any minute; or it might not.

When I finally got aboard for the three-hour flight to Chicago I didn’t have the day’s email or my files. I was simply a prisoner with no control or access to the world.

Well, all that’s about to change.

Chicago based Boeing Corporation and a Seattle based start-up, Tenzing Communications, Inc. are engaging in an aggressive, behind the scenes, fight to give you connectivity in the air.

In June, Tenzing drew first blood in what may become the latest version of the VHS versus Beta controversy. They announced that United Airlines would be the first domestic carrier to offer two-way email connections with Verizon AirphoneR JetConnectSM.

In the announcement, Tenzing reported that JetConnectSM will provide email, instant messaging and text messaging services for a cost of $15.98 per flight and $.10 per Kb of data over 2 Kb/message.

That’s a nice service for short messages, but I had a 648 Kb PowerPoint presentation file I wanted to upload from my office server. And, who knows what other documents my colleagues might have sent. By my calculation, had JetConnectSM been available last night my fees would have been $80.58.

“When you go into the service you only see the first Kb of the email,” said Michael Pinckney, VP Marketing for Tenzing in a recent interview. “You could decide whether you’d want to spend the money.”

Pickney, who recently joined Tenzing after stints at two Seattle area start-ups (Nimble Technology and Capital Stream) is the former product manager for Excel at Redmond, WA, Microsoft and led marketing for e-commerce industry products there. He also was a research director at Stamford CN based Gartner Group.

“Our view is that email is the killer app of the Internet and we want to bring that to the airplane. We think people want to be connected and want to be productive. Our focus is very much on the business traveler and making that time in the air valuable.”

On the other side of this battle is David Friedman, the newly appointed Vice President of marketing for Irvine, CA based Connexion By Boeing. Friedman is a veteran of the wireless, land-based and satellite based communications wars. He most recently helped U.S. Cellular, a Chicago based wireless communications company grow to nearly $2 billion in revenues. He’s previously held marketing and product development positions at Hoffman Estates, IL based Ameritech (now SBC) and at Princeton, NJ based, RCA Communications (which was sold to GE). He’s also worked with several Internet start-ups as a consultant.

So the marketing leadership appears seasoned and balanced on both sides.

Boeing recently completed successful air trials of Connexion on Lufthansa and British Airways. In an interview, Friedman reported, “Overall satisfaction levels with the service were 93%.”

Boeing is offering users the opportunity to connect their own laptops or PDA’s through a standard computer cable connector into a server on the airplane. The signal is then unlinked via an antenna on the plane to a satellite and then down to an earth station. “There’s a flat fee of $30 per session,” says Friedman, and Boeing promises “DSL-like speeds” or high-speed connectivity.

Industry observers seem impressed. Brendan Gallagher, editor of InFlight Magazine was quoted recently in a Chicago Tribune article saying “Connexion, from a technology point of view is absolutely dazzling.”

Even Tenzing’s Pinckney credit’s Boeing with having an impressive service. “Our competition wants to bring your entire office into the air. We don’t think the airlines or the people who fly them want to pay for that,” he says.

Adds Pickney, “Boeing has a very difficult sell to the airlines because their solution costs over $1 million/plane and adds hundreds of kilograms of weight. It requires the addition of an antenna on the airplane. That causes drag and fuel costs go up. The cost in terms of fuel, equipment and lost cargo weight is huge. The worst thing is they have to take a plane out of service for ten days for the installation.”

For his part, Friedman seems confident. "The big challenge right now is what do we rollout and when? What’s the evolution plan? What kind of products do we want? How do we provide the best customer service? What kind of device do we need? How do we enable it? That’s the exciting part,” he says.

“I love the competition,” adds Friedman. “ It keeps us focused, but our ultimate focus is firmly on the customer need.”

“It’s real simple, Tenzing offers a solution for a certain segment of the market. Their aim is on the lower end. They’re utilizing existing infrastructure in airplanes. If you don’t care about speed… If you don’t care about sending large files or attachments…” he pauses. “We’re looking at the passengers needs. We know they want a broad band type offering and better cost,” says Friedman.

Says Tenzing’s Pinckney “What’s a better car, a Ferrari or a mid-size BMW, the Ferrari costs $300,000 and the mid-size BMW costs $40,000. The object is to get the kids to school.”

Win, lose or draw, you come away incredibly energized after speaking with Friedman and Pickney. These guys aren’t down sizing; they’re driving for market share. They’re competitors ready for the fight. It feels like McDonald’s versus Burger King; Apple versus IBM or Coke versus Pepsi. It actually feels great after all these months of cost cutting and budget reduction.

Who’s going to win? I wouldn’t venture a guess. They’re both experienced marketers with strong product offerings and well-heeled backers. It’s anybody’s guess.

I do envy them. Flying home in a thunderstorm without access to email sure isn’t any fun. Launching products that connect passengers in stormy weather could be the most exciting marketing job out there these days. I hope they hurry. I need to read my email and download my files.

Michael Krauss is a partner with Marion Consulting Partners and can be reached at Michael.Krauss@Marionpartners.com or news@ama.org.