VDC Research: Enterprise & Government Mobility Market Blog

Apple’s Efforts in Education: Two Steps Forward and One Step Back

This past Thursday, in an event shrouded in secrecy and laden with anticipation, Apple announced the launch of three apps designed to transform the role of technology in education.             

Honoring Steve Jobs’ passion for education, Apple set lofty goals for these newly released apps.  Rather than defining the financial opportunity for these transformative products, Apple opened this event with an overview of current challenges we face in education.  Phil Schiller, SVP of worldwide marketing for Apple, noted today’s textbook prices upwards of $100, the “one size fits all” approach taken in many classrooms, and our nation’s educational curriculum falling behind that of other industrialized nations.  Citing the fact that only about 70% of entering freshman graduating high school in four years, Schiller set the stage for the reveal of three new apps: iBooks2 - now offering textbooks, an enhanced iTunes U enabling colleges to create course apps, and iBooks Author to simplify development of these engaging new e-books.

As usual, this announcement by Apple succeeded in exciting imaginations around the potential for future opportunities to enhance student engagement and promote interactive learning.  Yet, while Apple may have succeeded in setting the ball in motion, we’ll have to wait and see who will step up and take this to the next level.  As exciting as it was to see an Apple event spotlight education, these apps are not destined to transform today’s classroom environment.

In conversations with schools currently employing iPads in classrooms, we have heard that Apple’s educational platform is “still not congruent with how students are learning.”  Beyond the media capabilities enabled by the iPad, students looking to research a topic now look towards tools such as Wikipedia and Twitter as sources for data. Further, with many schools having adopted the 16GB iPad, VDC believes teachers will be hard-pressed to make use of these iBooks textbooks, which may each consume as much as 3GB or more of disk space. 

In all, while these apps are unlikely to represent the future of education, Apple’s announcement has whetted the appetites of students and teachers around the world as we await the release of further advances in educational technology.  VDC will dive deeper into issues around content ownership, content development, accessibility of these educational tablets, and more in future blog posts and in VDC’s first Education Services report – set to publish in November, 2012.

 

RIM Leadership Change...From Within

What likely was way overdue Mike Lazaridis and Jim Balsillie stepped down as co-CEOs of RIM. However, in an unusual twist, they were also responsibly for selecting their successor, COO Thorsten Heins, a five year RIM veteran. Needless to say, the overwhelming reaction to this selection was not positive as many expect 'much of the same' with insider Thorsten at the helm (one viable scenario to move forward with an Heins is that he would be better positioned to set up RIM for a sale). RIM as the next Kodak is the easy observation to make here. And while RIM clearly has its work cut out for it and the prevailing trends are pointing in the wrong direction the rush to dismiss RIM and its iconic BlackBerry brand is premature.

So what should be on Thorsten's short list?

1. Refocus on the North America market. RIM has clearly been making strides in markets outside of North America. While that is clearly important and should continue to be a focus for RIM, it has come at the expense of their core North America business. However, at the end of the day, smartphone brands are established and validated in North America. Not having a seat at the table comes at a major cost.

2. Hire Fresh External Marketing Talent. Much has been the made about the turnover in RIM's marketing department and rightly so. It has been too long since RIM users expressed a truly visceral experience with their BlackBerry devices. Remember CrackBerry? What is painfully clear is that RIM is at its core an engineering company and has grown up marketing and messaging to similar engineering/IT types within enterprises and government organizations. RIM's focus on pushing 'Flash' with its PlayBook launch is perhaps the prime example of this. It is not only that consumers have greater influence with technology decisions today but the marketing department within organizations has similarly usurped power and influence from the IT department on key mobile solution discussions. RIM has missed that transition and will now need to aggressively close the gap.

3. Speeds and Feeds Comparisons are Less Impactful Decision Criteria. The PlayBook may be a great piece of hardware but these devices are not purchased on speeds and feeds comparisons. It is not about Flash.  It is about the experience individuals have with these devices and the extended (apps) eco-system available to truly leverage these connected devices. Not having native email with PlayBook 1.0 was a major oversight. While PlayBook 2.0 (when its released) represents a massive upgrade, developer support for this platform is in need of a major boost. Another key issue - especially for core enterprise customers - is that security concerns no longer represents the barrier to mobile investments it used to. While security is clearly still a 'concern' or 'consideration', it is mostly no longer keep organizations from investing. RIM was able to successfully leverage thier best in class security to mitigate these concerns. With other platforms closing the security gap, RIM's security advantage is being marginalized.

4. Retrench in Core Enterprise and Government Segments. While this may seem somewhat counter-intuitive to the previous points, the fact remains that RIM continues to have a major marketshare footprint in many Enterprise and Government segments. While difficult, it is possible to speak and appeal to both corporate and individual decision makers. Their devices need to be great consumer devices, however, at the same time, provide all the management, security and support capabilities necessary in corporate environments.

Time is likely not on Thorsten's side. While he will need some time to put together his own strategy for the company moving forward the key will be execution. There is little room for failure and RIM will need to hit all its key milestones. Especially the pending PlayBook 2.0 and the launch of BB 10.0 later this year.

BIG Again! NRF's 2012 BIG Show Brims With Traffic

National Retail Federation Expo 2012 took place in NYC this week and highlighted the future of retail. The attendance from solution providers including hardware, software and services providers was highly significant as well as visitors. Following a strong 2011 performance complemented by the holiday sales, the general outlook for retail remains strong, while the pace is expected to be slower than 2011. Nevertheless, NRF is projecting retail industry growth of 3.4% in 2012 to $2.5 trillion.

Members from VDC's Mobile and Wireless Practice spent Monday at the show meeting with a variety of established and emerging vendors. Some of our early impressions include:

Apple exhibits at NRF!

While Apple does not do tradeshows, based on the bevy of iOS devices on display at the show it clearly does not have to. A perhaps not so outrageous prediction of ours for 2012 was Apple's (and specifically iOS's) continued expansion into the retail market. Much of what we saw at NRF certainly confirmed this expectation. From customized sleds that convert the iTouch or iPhone into a secure mobile payment platform to sophisticated business intelligence applications designed for iPads, Apple's presence was widely felt. Secure payment solution providers such as Ingenico and VeriFone introduced their solutions targeting the iOS platform which are capable of processing both credit and debit cards, making them usable globally. While the mobile vendors typically selling into the retail segment continue to debate the Windows vs. Android scenario, Apple/ iOS - with no major push of their own - is establishing itself as a strong retail mobile platform. This only confirms another trend we are tracking in that Chief Marketing Officers are usurping power from traditional IT decision makers when it comes to which mobile solutions to deploy for highly visible and customer facing retail applications.

Are tablets right for retail?

The uptake in tablets appears to be noteworthy given that small form factor devices have traditionally dominated retail. In addition to small form factor vendors like Motorola which has been among the leading vendors in retail with their rugged handheld solutions debuting their ET1 tablet, rugged large form factor vendors such as Panasonic and Motion Computing are also going after the highly promising retail market with their recently introduced rugged tablet solutions. While tablets clearly have a role to play in retail operations - especially for customer facing applications and for solutions such as interactive displays - retailers are still evaluating the true potential of these devices. A recent survey did not perceive store associates equipped with tablets as providing superior service in comparison to those equipped with other mobile computing and communications solutions. While we expect tablets to represent a strong platform for certain retail workers and workflows, 2012 may bring more pilots and evaluations rather than large scale rollouts.

Consumer WiFi, mobile payments and mobile scanning providing more immersive retail experience

Similar to themes we have been discussing throughout 2011, customer engagement is expected to play a huge role in this move. More and more store associates are being equipped with mobile devices in order to lookup customer and product information during their interaction with customers. Most retailers we spoke with also talked about public WiFi for their shoppers to drive a more interactive experience while evaluating next generation presence applications.

Likewise, mobile payments and mobile POS solutions were in high demand during the show as many solution providers introduced their newest products. Not only answering the customer's product-related questions but also completing the transaction at that point of contact is becoming highly valuable for retailers as the traditional in-store environments which may have limited number of POS machines can result with long lines and lost revenue for these organizations. Thus, this enables the associates to not only sell the inventory in a particular store but to also order an out-of-stock product through their online/ mobile site and have it ship directly to the customer or the store based on the customers' preference. Hence, the up-sell and cross-sell opportunities that can be achieved through this interaction are very significant. Tracking how traditional retail POS vendors respond to this trend will be especially interesting as many of these have the most at stake. One interesting solution was from Wincor Nixdorf - a leading brand of traditional POS solutions. They are extending their mobile capabilities with their TP Application Suite, which provides two hardware independent modules: TPiSCAN supports all self-service solutions in the checkout area. TPiSHOP offers the possibility to implement mobile self-scanning either on retailer-owned devices or on individual smartphone of the customer.

Following a dynamic 2011, expectations for retail technology solutions - especially customer facing mobile solutions - remain robust in 2012.

Seeking Growth in the MEAP Market; Pyxis Rebrands as Verivo Software

Although Pyxis’ transformation into Verivo Software represents a significant development in the enterprise mobility market, this event underscores a larger transformation we will see play out in the mobile enterprise application platform (MEAP) space this year: consolidation.  

Earlier this week, after securing $17 million in a round of funding led by Commonwealth Capital Ventures, Pyxis Mobile advanced the company’s rebranding initiatives with the launch of Verivo Software.   While this move has surprised many industry watchers, CEO Steven Levy reports that these efforts have been in the making for over a year.  Although 2011 was a growth year for MEAP vendors such as Pyxis, it is our view that expectations were not met. Pyxis’ Levy hopes the rebranding efforts will enable the company to enhance its positioning as a market leader in the MEAP segment.  

Beyond a transition from the company’s 13,000 square foot headquarters to a 40,000 square foot space, Verivo states that the new funding will enable the company to:

• Open new offices in Europe in Asia
• Develop products to further enable companies to launch better app, faster
• Explore new partnerships and M&A opportunities
• Recruit additional software experts
• Expand its platform and API for third-party developers

 

From the looks of it, Verivo is on a path to expand its global presence and product offerings.  Levy’s intention to pursue additional M&A’s in coming months is of particular interest.  Pyxis’ strategic partnership with Good Technology in October of last year served to strengthen the company’s platform with enhanced security and mobile device management (MDM).  With customers increasingly look for “one-stop shop” solutions that enable internal management of everything from app development to mobile device management and provisioning, MEAPs who partner effectively will be well positioned for growth.  As discussed in VDC’s 2012 Predictions for Enterprise Mobility Software research note, the growing importance of the channel will see Verivo and other players in the MEAP market seek out strategic partnerships to integrate these point-solutions into more comprehensive software solutions. 

Competitors such as Kony Solutions and Antenna Software aren’t standing still – this past December, Kony announced that its KonyOne platform supported HTML5, we expect Antenna to announce a revamped strategy in Q1 as well …

A Look Back at 2011

Funding:
appMobi  
• January: $6M in Series B funding (angel investors / not identified)
Paydiant
• February: $7.6M in Series A funding led by North Bridge Venture Partners and General Catalyst Partners
Apperian
• March: $9.5M from North Bridge Venture Parrtners, Bessemer Venture Partners, Kleiner Perkins Caufield & Byers’ iFund, CommonAngels, and LaunchCapital
MobileIron
• May: $20M in Series D funding from existing shareholders Foundation Capital, Norwest Venture Partners, Sequoia Capital, and Storm Ventures
Fixmo
• June: $6.5M in Series B funding led by Panorama Capital
 o Current investors Rho Ventures Canada, iNovia Capital, Extreme Venture Partners also participated
• November: $23.4M in Series C funding from Kleiner Perkins Caufield Byers, Paladin Capital Group, and Horizons Ventures (Hong Kong)
App47
• June: $1M in Series A funding from Valhalla Partners
Square
• June: $100M in Series C funding led by Kleiner Perkins Caufield & Byers
VIVOtech
• June: $24M in Series C funding from EDBI (Singapore), SingTel Innov8, Motorola Solutions Venture Capital, Alloy Ventures, Citi Ventures, Draper Fisher Jurveston, DFJ Gotham, First Data Corporation, Miven Ventures, Motorola Mobility, Nokia Growth Partners, and NCR
Lookout
• September: $40M led by Andreessen Horowitz
 o Current investors Khosla Ventures, Accel Partners, Index Ventures also participated
Mocana
•September: Undisclosed amount from Intel Capital
 o Shasta Venture Capital and Southern Cross Venture Partners also contributed
MeLLmo
• September: $30M led by Sequoia Capital
Nukona
• September: (undisclosed) led by Citrix Startup Accelerator and other angel investors
Enterproid
• October: $11M in Series A funding led by Comcast Ventures, with Google Ventures and Qualcomm Ventures also contributing
Zenprise
• October: $30M in Series E funding led by Greylock Partners
• Current investors Rembrandt Venture Partners, Ignition Partners, Bay Partners, Mayfield, and Shasta Ventures also participated
Sencha
• October: $15M in Series B funding led by Jafco Venture
• Current investors Sequoia Capital and Radar Partners also participated

Major Aquisitions:
Microsoft: Skype — $8.5B (May)
Google: Motorola Mobility — $12.5B (August)
HP: Autonomy — $10.3B (August)
Oracle: RightNow Technologies — $1.5B (October)
SAP: SuccessFactors — $3.4B (December)

Minor Acquisitions:
Adobe: Nitobi Software
Akamai: Cotendo and Velocitude
Alcatel-Lucent: OpenPlug
Antenna Software: Volantis
appMobi: TapJS
BMC Software: Aeroprise
Emptoris: Rivermine
Facebook: Strobe Inc.
Fixmo: Conceivium Business Solutions
Intermec: Vocollect and Enterprise Mobile
Juniper Networks: SMobile Systems
McAfee: tenCube
Motorola Solutions: Rhomobile
Nuance Communications: Noterize
Software AG: Metismo
Visa International: Fundamo

Partnerships:
Microsoft and Nokia
Sprint and Clearwire

Themes:
RIM's Fall:
• Playbook a massive failure
• Market capitalization decimated
• BB 10 OS pushed back
• RIM an acquisition target
Post Job's Apple
Android's rise
Patent battles
Spectrum battles
BYOD
Tablets in the workplace

2011 brought a wave of change to the mobile industry, attracting investors and driving significant acquisitions across the market — in 2012 we expect to see further innovation and maturing in the mobile ecosystem.

We will be following these trends into the New Year, with our first Mobile and Wireless report publishing in March of 2012: “A Classic ‘Attack from Below’ – Gauging the Impact of Best-of-Breed Mobile Upstarts.”

Also, make sure that you check out our mobile software prediction for 2012!

Mobile Impact: Vertical Market Spotlight - Transportation and Warehousing

The potential for efficient, flexible and effective coordination of transportation processes and networks lies in the emergence of internet-based information and communication technologies. Technologies such as RFID, e-commerce and telematics provide proven potential for the improvement of efficiency in coordination and transaction processes. In particular, these technologies provide opportunities for improved flexibility in coordinating supply and demand in dynamic supply network environments.

Warehouse processes

Mobile solutions have been helping organizations optimize basic warehouse processes for some time now – key processes such as reception, put-away, picking, shipping, and inventory management. Most importantly, these technologies are enabling organizations to reduce and/or eliminate human intervention. RFID-enabled products are playing a significant role, as multiple items can be read at the same time, eliminating the need for individual scans of pallets or cases. RFID can significantly reduce or eliminate problems due to human errors, which warehouse and transportation environments mainly relate to product counting and stock control, particularly in receiving and picking activities. For example, RFID can eliminate manual and visual verification of each received product, and speed up the receiving process and help to avoid bottlenecks at distribution centers, warehouses, and store entrance docks. Additionally, RFID integration into warehouse activities can promote cross-docking business models, where products move from inbound vehicles to outbound vehicles without any need to be stored, thus significantly reducing labor intensive and costly activities such as put-away and picking.

Given the potential of mobile technologies such as RFID to improve warehouse operations, numerous trials have taken place to verify the potential in supply chains of transportation intensive organization such as CPG manufacturing and retail. Publix Super Markets Inc., a Florida based supermarket chain has been actively using Electronic Product Code (EPC*) labels to improve the distribution of produce as it moves from suppliers to multiple distribution centers. Another notable example is Ballantine, a large fruit supplier – the company has been using RFID tags with their produce shipments to retailers like Walmart in order to gain competitive advantage and to deliver a fresher, more consistent product to consumers.

Fleet management systems

Fleet management systems enable logistics managers to monitor the daily distribution process of goods to customers (e.g. retail outlets) while monitoring important parameters (e.g., load temperature etc.). These systems record the position of the delivery fleet and the product temperature in real time (via temperature loggers), using a telematic unit that is fitted in each vehicle. The position of the vehicle is then relayed back to a central monitoring centre using GPRS technology. The data received is typically stored in a database and can be displayed on a variety of platforms, including mobile.

Fleet management systems are critical for the supply chains of CPG manufacturers and in retail distribution, were GPS/GPRS hardware is routinely integrated with refrigerated containers and/or trailers. By monitoring their assets in real-time (for any changes, such as refrigeration status and human or system errors) and using fleet management systems to predetermine routes and delivery times, these organizations can proactively detect any route violation(s) and have alerts generated an alert at their control center – allowing dispatchers to take necessary action(s) to avoid longer transportation times, which might affect the quality of the products.

Vehicle-routing systems

Vehicle-routing software is critical for transportation intensive organizations – these solutions enable firms to optimize their vehicle usage (e.g. minimize transportation time, distance travelled, etc) while bringing the ability to maximize vehicle / capacity usage.

The principal advantage of using automated vehicle-routing systems is that they can take into consideration a larger number of constraints and calculate more alternative solutions than can ever be done manually. Vehicle-routing software incorporates advanced scheduling methods (routing algorithms) that can generally be relied upon to provide very efficient solutions. For mission-critical scenarios, a vehicle-routing system can enable the scheduler to make fundamental changes to existing routes to allow late or urgent orders to be planned into the schedule while the system checks for any implications (missed delivery windows, legal infringements, etc.).

To learn more about the enterprise mobility opportunity in transportation and warehousing, click here for the executive summary to our recently published (November 2011) Report.

Growth of Enterprise Apps Ecosystem to Drive Tablet Adoption in 2012

Although 2011 was a big year for tablets with notable large deployments (e.g., American Airlines, SAP, and the Department of Veterans Affairs), the perception of tablets as a complementary/companion device remains. The aforementioned deployments are early evidence of potential this device class may offer to transform today’s enterprise.   The extended battery life, portability, and large screen size of tablets enable enhanced computing capacity and usability over the smartphone, while preserving the portability, connectivity, and long battery life appreciated by many smartphone users.  While tablet use and adoption has currently centered on the consumer market, we believe that the growing ecosystem of enterprise-class applications will drive tablets into the enterprise in 2012. We project that the global market for tablets will exceed 100M units by 2014 – while this pales in comparison to laptop penetration in the enterprise, it is significant growth.

Alongside the anticipated advantages these devices will enable for enterprise customers (i.e. in sales, business intelligence, or communication), companies such as IBM have begun to recognize the generous profit potential for companies best able to access this growing software market. Earlier this month, IBM expanded its suite of mobile offerings with the announcement of seven new mobile applications targeted at enterprise users.  These social networking apps cater to users of iPad and Android devices, offering software to facilitate capabilities ranging from instant messaging and reduced calling costs to management and attendance of online meetings. Salesforce.com’s anticipated Touch.salesforce.com (a tablet-optimized HTML5 mobile app) will also be impactful, as it will seamlessly enable users to access their Salesforce applications across tablet and smartphone platforms.

We expect that the market for tablet-optimized enterprise applications will experience substantial growth in 2012, led primarily by large ISVs and by innovative startups. As enterprises and IT organizations become more comfortable with mobile devices and tools, we expect to see tablets expand across the enterprise. This growth will spur further innovation and technological advances in software applications, driving new uses for this device in the enterprise.

2012 Enterprise Mobility Outlook

As 2011 comes to a close and we again face the ominous task of putting together our predictions for the coming year. Considering what transpired in 2011, it is hard to imagine a year as face-paced and filled with opportunities. Clearly enterprise mobility has evolved from a niche point solution to a mainstream segment of the IT landscape. There were numerous developments that signified 2011 – from Motorola landing a large managed services contract with Sears and Lowes deploying over 40K iPhones for their store associates to the introduction of the first rugged Android-powered tablets and mobile POS gaining momentum. 2012 is promising to be just as dynamic. Some of the most influential issues and trends we believe will shape the enterprise mobility dialogue in 2012 include:

1. Consumer vs. Enterprise Lifecycles: Security Issues Loom Large. 
2. Mobile Payment to Reach Critical Mass…especially for Many High Growth Customer Facing Applications. 
3. Rugged Android…Is the Market Ready?
4. Mobility Budget/Cost Pressures Loom Large.
5. Can RIM recover in 2012? 
6. The Cloud Vulnerabilities Continue for Mission Critical Enterprise Mobility.

We will be posting the complete research note on our website shortly. Stay posted...

Google to Compete with Dropbox

Google revamped Insync - its version of Dropbox - and made it available for public by removing registration limits. Insync has now moved past beyond beta stage and is available with its sync and file sharing capabilities. With this move, Google has become a clear competitor to Dropbox, SugerSync and Box; allowing Insync users to automatically sync, update, manage and share their files. While the main and most obvious target group appears to be the Google Docs users, Insync can also access files that are stored in your PC or Mac.

Despite the growing user base of Google Apps, Insync is targeting small businesses as well as many individuals that are not currently using a file sharing service and/or the ones that are using competing products; along with its pricing and "8x cheaper than Dropbox" marketing campaign. Dropbox is charging $120/year for 50 GB storage, while Insync is priced at $20/year for 80 GB; making it a viable alternative in today's cost conscious business world.  Even though many companies remain to be skeptical on file sharing platforms and Google Docs as a result of the security and privacy concerns, both Open Office and Google Docs; along with Dropbox and its competitors are expanding their user base. 

These products boost collaboration in today's increasingly mobile world with their easy access and permission levels (i.e. read and write or read-only). While it is too early to tell the performance, accessibility and security of Insync in comparison to other publicly available applications, the product is lacking mobile support as well as a dedicated mobile app. Considering Google's commitment to the mobile industry; mobile Insync app or the added Insync functionality to the company's current mobile apps would land on the app stores shortly. If the company is able to achieve the seamless integration with its Google Docs apps and provides support for any mobile device, Insync and Google Docs could be a very powerful productivity suite.

Mobile BI...Unlocking the Power of Mobile Devices

With mobile workers equipped with any variety of powerful smartphones and increasingly tablets, organizations are looking beyond traditional email and messaging applications to see how they can leverage these devices. One such opportunity is mobile BI solutions. While this is certainly not new - VDC has been tracking mobile BI for several years now - several factors suggest that demand is about to pick up substantially. When we first looked at the opportunity for mobile BI in 2009 approximately one in ten organizations stated that they had some level of investment/deployment or evaluation of mobile BI solutions underway. Fast forward to 2011 and that ratio has now reached 30-35% of organizations.

Mobile BI solutions have also developed substantially and are capable of fully leveraging today's powerful mobile technology. The solutions are no longer relatively limited snapshots of BI reports but rather represent tools with powerful querying capabilities with dynamic data access. These capabilities are also fundamentally changing the role and value-add of analytics and business and customer intelligence as the information is being made available to a much broader group of users - many of whom may have previously not have had access to this intelligence.

One of the fundamental questions challenging BI solution providers is their approach to application development. Namely native or HTML5/browser based solutions. Vendors are mixed in their approach with some also opting for a hybrid approach. Today the richer and more dynamic solutions typically are designed as native application for a specific device. However, as HTML5 solutions evolve and address many of today's limitations we expect them to be increasingly favored based on their cross platform appeal. VDC will be dedicating much of our research in 2012 towards looking at a variety of emerging enterprise mobility applications such as mobile BI. We look forward to continuing this dialog.