SAN JOSE, Calif. – Motorola plans to buy Santa Clara, Calif., wireless software startup Good Technology for an undisclosed amount, the companies said in a joint statement Friday.

Good currently provides e-mail software for the Schaumburg, Ill., mobile telecommunications company’s Motorola Q smartphone.

The deal will give Motorola direct access to technology that could help it compete with Research In Motion’s BlackBerry among corporate users of mobile email. Archrival Nokia bought Intellisync, another mobile e-mail provider, in February.

“They want to be a major (big business) enterprise player,” said Jack Gold, principal analyst of J.Gold Associates. “The way you become a major enterprise player is you get a device that enterprises want. The Q is good right now, but it’s not yet the device that enterprises want. It hasn’t sold in the volumes they thought it would.”

The agreement provides an immediate return for Good’s financial backers, who collectively invested more than $200 million in the company during the past six years. The strengthening of the partnership into an acquisition gives Good the kind of global reach that’s impossible for a relatively small, private company.

Good claimed to have 12,000 corporations using its software, but at least one analyst said the deal was a desperate move.

“The reason they had to sell was they were running out of money,” said Peter Misek, senior technology analyst at Vancouver, Canada-based investment firm Canaccord Capital.

Canaccord research said that as recently as last summer, Good had 250,000 subscribers (compared to almost 7 million for RIM’s BlackBerry) and was burning tens of millions of dollars per quarter.

Neither Good nor Motorola would disclose their versions of these figures, although J.Gold Associates estimated Good has as many as 1 million subscribers and a maximum annual loss in the low tens of millions.

“We’re in a very comfortable cash position,” said Good spokeswoman Reena Mukamal. “By most accounts, we’re a Silicon Valley success story.”

Whatever the final terms of the deal, the market consolidation is most likely to hurt companies that can’t provide an all-in-one mobile software solution, such as mobile e-mail company Visto and handset maker Palm, which uses Good Technology e-mail software.

“The wireless e-mail market has matured very rapidly. What you’ve now got is three competitors: RIM, Nokia and Motorola,” Gold said. “This is bad news for Palm. I think they’re going to be acquired, though I’m not sure who would want to buy them at this point.”

Palm said its openness to multiple software providers was a strength, and stressed its continued partnership with Good, despite the planned acquisition by Palm competitor Motorola.

“We think it’s really important to give our customers choice – choice of an operating system and choice of e-mail solutions. We’re comfortable with that approach to the marketplace,” said Palm spokeswoman Marlene Somsak.

Visto did not return calls for comment.


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