VDC Research: Enterprise & Government Mobility Market Blog

ITSMs Going Mobile - LANDesk Acquires Wavelink

LANDesk has made its second acquistion since becoming a stand-alone business in September of 2010 (the company acquired analytics specialist Managed Planet in April of 2012) with the acquisition of Wavelink on June 20th. The company has changed hands several times in the last decade — LANDesk had been spun-out of Intel in 2002, was then aquired by Avocent in 2006 — Avocent was then acquired by Emerson Electric in 2009, who sold the firm to Thoma Bravo LLC in 2010. Thoma Bravo LLC is a private equity investment firm that appears to be increasingly focused on mobile-oriented companies to bolster its software and technology portfolio.

LANDesk who is best known for pioneering the management of PCs and servers has long been focused on expanding its systems management product portfolio. Since being spun-out of Intel, the company added a security suite with a best-in-class patch management functionality, as well as application virtualization to streamline application deployments, testing, and rollbacks while minimizing application conflicts.

With Wavelink, the company has added a tenured mobile-oriented ISV to its systems lifecycle management, endpoint security management and IT asset management services. While Wavelink is best known for its strength in device management and terminal emulation software, the company's rugged roots give it strength in managing mission-critical rugged mobile platforms — additionally, Wavelink's Speakeasy solution is a best-in-class solution for voice-driven data collcection.

Thoma Bravo (and LANDesk) reportedly evaluated 17 mobile-oriented ISVs prior to acquiring Wavelink — clearly this was strategic acquisition that will provide momentum as enterprise mobility continues to gain emphasis for LANDesk.

As depicted below, it is clear that there is significant overlap between the management of traditional technology platforms of desktops and notebook PCs and client/server computing environments and modern mobile platforms — moving forward, we expect other traditional ITSM vendors to move in the direction that LANDesk has as well. A firm such as BoxTone is a great example of a mobile ISV with this mindset.

Musings from Miami...2012 Enterprise Mobility Exchange

Tropical storm Debby and the Heat's victory parade aside, I was fortunate to spend a couple of days at IQPC's 2012 Enterprise Mobility Exchange in Miami on June 25 and 26 (full disclosure: I sit on their Advisory Council). The event is designed primarily as a high impact networking forum and attracts largely C-level and VP-level decision makers from Enterprise 1000 firms. Some very interesting topics were included as part of the conference agenda and resulted in a lot of thought provoking discussions. Some of the more interesting included:

1. Enterprise Mobility Strategy: It is NOT about the technology. It is still surprisingly clear that enterprise mobility is new for many organizations. While the use of smartphones and access to corporate communications such as email may be prevalent, it is at the absence of any true mobility strategy. Building block solutions such as device management, security and application design and management services is where much of the conversation is focused, and rightly so. How, when it comes to a mobility strategy, the focus for many organizations is not where it should be. Too many organizations are consumed by a mobile technology strategy as opposed to a mobile business or enterprise strategy. While there are some important technology decisions that need to be made, organization's are typically consumed by these topics and lose sight of the true benefits of mobile solutions. The pace of mobile technology change is so rapid making keeping up with developments almost a futile effort. 

2. Who is in charge? Another common mistake among enterprise organizations is to layer mobility responsibilities onto an existing staff member. This frequently falls into the lap of a network administrator. That is not to say that there are not many sharp and massively capable network administrators, more often than not this approach becomes a recipe for disaster. Fact of the matter is that most IT departments today fall short in their mobile technology acumen. According to a recent survey we fielded 52% of respondents rated their mobile service and support capabilities as considerably or somewhat weaker than their overall IT support services. This represent a major learning curve the market still needs to overcome. While much like wireless networking became networking, enterprise mobility will evolve into something more mature and common place. However, it is not there today and needs to be staffed and supported accordingly. 

3. Mobile Enterprise Strategies: Plan Short Term...Act Short Term. This not only seems counter-intuitive...it actually is. However, when it comes to mobility the idea of a five year - or even a three year - plan is futile. (The only reason I bring this up is because several conversations I had started with "my CIO wants me to design a five year plan..."). This needs to be an on-going constantly evolving endeavor this is not shackled by a plan devised several years back. Any CIO looking to develop a 'five year mobile strategy' should start by looking for a new job.

There clearly remains much work to be done as enterprise mobility solutions become more mainstream. The fact that the Enterprise Mobility Exchange's audience focus has shifted from 'iPad mania' to the practical application of technology in six months is evidence of progress being made. 

Microsoft Acquires Yammer for $1.2B

This past Monday, Microsoft confirmed its $1.2 billion acquisition of four-year-old Yammer – a social networking company targeted at the B2B market. According to Microsoft, Yammer will join the Microsoft Office Division, but will continue to be overseen by Yammer’s CEO and co-founder David Sacks. In a press release, Microsoft stated:

"Yammer will continue to develop its standalone service and maintain its commitment to simplicity, innovation and cross-platform experiences. Moving forward, Microsoft plans to accelerate Yammer’s adoption alongside complementary offerings from Microsoft SharePoint, Office 365, Microsoft Dynamics and Skype."

Thus rather than integrating Yammer’s technological capabilities with Microsoft’s core competencies in desktop software, the company appears to envision Yammer’s services as an attractive “a la carte” option for enterprise customers.

Over the past five years, the Consumerization of IT (CoIT) has forcibly driven countless organizations to adopt more consumer-centric technologies, applications, and devices – for example the iPad, Facebook, and Twitter. The tech world has waited to see what Microsoft could bring to the table, and its strategy to capitalize on this trend. Last week saw Microsoft announce its new tablets (Windows 8 Pro and Windows RT) – the company is clearly looking to bridge enterprise-grade software and processing capabilities with a consumer-friendly interface. This acquisition of Yammer – at a considerable price point – symbolizes another attempt by Microsoft to adapt to today’s tech market. And yet, with its presence severely lacking in both the smartphone and tablet markets, and the PC market continuing to erode, this tech giant has a long road ahead to prove that it’s ready and able to tackle the future evolution of today’s technologies.

On the other hand, Yammer CEO David Sacks will likely prove a strong addition to the Microsoft team. Referring to the growing relevance of social networking to the enterprise, Yammer CEO David Sacks commented “Four years ago, we started paddling out to catch the wave that we’re riding today. With the backing of Microsoft, our aim is to massively accelerate our vision to change the way work gets done with software that is built for the enterprise and loved by users.” While vague in nature, this comment suggests that Sacks views this acquisition as the beginning – and not the end – for Yammer’s potential in bridging social networking technologies with the enterprise market. Will we see his goal come to fruition? Well, we see a slew of challenges ahead for Microsoft - one thing Microsoft does have in plenty is capital resources. Strategic employment of these resources and advancement of product strategy will be the true challenge.

T-Mobile Plays the Pawn in Verizon's Latest Attempts to Push Approval of its SpectrumCo Deal

On Monday, Verizon Wireless and T-Mobile announced that the two companies have agreed to a spectrum sale/swap arrangement.  Awaiting FCC approval, this deal would enable the vendors to swap portions of their spectrum in the AWS (Advanced Wireless Services) band, while also seeing “an overall net transfer of spectrum from Verizon Wireless to T-Mobile and a cash payment from T-Mobile to Verizon Wireless.”  From the outside, this appears to be an attractive deal to all parties:

•  T-Mobile gains licenses covering approximately 60 million people (facilitating LTE network build-out).
• The swap/sale of these spectrum licenses may facilitate more efficient spectrum usage, with each vendor increasing its amount of contiguous spectrum.
• Verizon will increase its AWS spectrum holdings, allowing build-out of its LTE network in this spectrum block.
• The deal appears to enhance the level of competition in the wireless market (clearly an FCC concern considering the controversy around AT&T’s failed acquisition of T-Mobile in December 2011), with the nation’s fourth-largest cellular firm attaining network coverage from Verizon Wireless.

And yet, a closer look into this deal tells an entirely different story…

This agreement between Verizon and T-Mobile is merely a piece of a much larger puzzle – one that commenced in early December 2011, when Verizon made a $3.6 billion deal to purchase SpectrumCo (a joint venture between Comcast, Time Warner, and Bright House).  This deal also contains:

    “a cross-resale agreement, in which the cable companies can resell Verizon-branded service, and     Verizon Wireless stores can sell cable service. In four years, the cable companies will be able to     launch wireless service under their own brands in a more traditional wholesale agreement. In     addition, the companies will also create a joint innovation initiative to better integrate wireless and     cable services.” (CNET) 

This purchase has yet to receive approval from the FCC and DoJ, who must evaluate the impact of this deal on competition in the wireline and wireless network markets.  Aside from these government bodies, this prospective purchase by Verizon has drawn considerable criticism from other interested parties – the Alliance for Broadband Competition formed in mid-May 2012 to oppose this purchase.  Members of this alliance include Public Knowledge, Rural Cellular Association, Sprint, and T-Mobile.  T-Mobile had – until yesterday – been one of the most vocal opponents to this purchase.  With this new deal between Verizon and T-Mobile conveniently “contingent” upon the FCC’s approval of Verizon’s SpectrumCo purchase, T-Mobile has withdrawn its objection to this purchase.

This is not the first attempt by Verizon to draw FCC approval of the SpectrumCo deal – in April, Verizon proposed that it would run an “open sale” of many licenses the company holds in the 700MHz A and B blocks.  This proposition was, of course, contingent on the close of its deal to acquire spectrum from the cable companies. 

While the motives driving this deal between Verizon and T-Mobile are clear to all sides, DoJ and FCC regulators will have to re-consider Verizon’s SpectrumCo purchase in light of these changes, and their impact on the entire wireless market.  The Alliance for Broadband Competition (minus T-Mobile) remains fiercely opposed, noting that "While it's nice that Verizon will cede a small portion of its vast spectrum holdings to T-Mobile, that does nothing to mitigate the fact that Verizon and Cable want to stop competing, stop investing, and stop innovating to the great detriment of consumers and the American economy."

 

Microsoft's Surface, Apple's iPad: A Side-by-Side Comparison

Although Microsoft has - unsurprisingly - not entirely revealed its hand it terms of what we may expect with its upcoming Surface tablet, we have developed the chart below to illustrate the known variances between these two devices.

Historically, Microsoft has seen the most success in targeting the student and working professionals market.  Features such as the sleek, VaporMg case with fold-out stand, greater built-in storage capacity, and the USB connector ports illustrate Microsoft's decision to capitalize on its brand and maintain its focus on these markets.  The capacity for the Windows Surface Pro model to interoperate with desktop Windows programs and software is a distinct advantage - something we have been waiting to see in the tablet market.  However, while the iPad has been viewed as a complementary device to the laptop/desktop computer, this begs the question - how will Microsoft position the Surface Pro tablet against competitive device classes (i.e. laptop, Ultrabook, netbook, tablet).  As mentioned above, many questions will loom over the next 3-6 months as we await further details regarding the specs of these devices. Most interesting will be details regarding connectivity (3G/4G, carrier partnerships, pricing), pricing of these devices, software, and battery life.  

Motorola, Psion and the Shifting Rugged Mobile Landscape

On June 15 Motorola Solutions announced its all cash transaction deal to acquire PSION for a remarkable $200 million. PSION has a long history in the mobile computing industry and was behind many iconic devices - remember its Series 3 and Series 5 clamshell PDAs and the latter's revolutionary keyboard or its EPOC operating system which eventually became the platform for Symbian? More recently PSION focused on ruggedized solutions for line of business applications across a variety of supply chain, logistics and field mobility market segments. PSION's position in the rugged mobile market is a combination of its own success WorkAbout handheld device - a widely deployed value-based device - and its merger with Canada-based Teklogix in 2000. 

It is these rugged mobile computing solutions and their installed base that Motorola Solutions targeted with this transaction (PSION will be integrated as part of Motorola's Enterprise Mobile Computing business). While this transaction represents continued consolidation of this maturing market, there are several significant implications that will cause ripples through the industry:

1. Industrial warehouse and supply chain/logistics: While Motorola's rugged handheld market position spans most industries and environments, industrial warehousing and port/yard facilities have represented a larger gap in its customer portfolio. This is PSION's (read: Teklogix's) back yard. Much like Honeywell's recent acquisition of LXE (EMS) which in part was motivated by Honeywell's lack of warehouse automation solutions, this transaction substantially increases Motorola's TAM.

2. Forklift mounted solutions market.It is no secret that Motorola's position in the forklift mounted computer market has been (to be kind) uneven. Their offerings have primarily been Embedded CE solutions limiting their appeal largely to the North America retail distribution market. PSION offers a much broader forklift portfolio (although several of their products are private label solutions). PSION's forklift portfolio and especially their forklift customers represent a substantial asset to Motorola. Moreover, PSION's strong forklift footprint in Europe will be critical for Motorola.

3. Market share consolidation. Motorola - already the clear leader in the rugged handheld market - further distances is competition (and eliminates a competitor) through this transaction. Combined, both organizations represented 44.2% of the rugged handheld revenue share in 2011. The combined organization will become the clear leader in the forklift market - a title shared amongst PSION, LXE, Motorola and Intermec - with 30.6% of the rugged forklift mounted computer revenue share (in terms of 2011 shipments).

4. Rugged market outlook. On the heels of a strong 2011 the rugged market has taken a turn for the worse in 2012. The are clearly several factors contributing to this downturn - from the weak economy in Europe to competitive pressures from consumer devices (iOS) in several markets. One development worth following is that their appears to be a retrenchment of the rugged handheld market into traditional, data collection intensive, applications and environments. By acquiring PSION, Motorola is - in effect - doubling down on these markets.

5. Competitive implications. Motorola and Honeywell have been the most active players in the rugged handheld market over the past couple of years - both in terms of organic growth and acquisition based expansion. Intermec - while still the number two vendor - is in an increasingly vulnerable position, especially considering their ability to land large scale, tier I deals. The other vendor that will feel the heat of this transaction is Datalogic, a Europe-based vendor. As these markets mature and products become more standardized, the success of top tier vendors will increasingly be dictated by manufacturing, supply chain and sourcing issues - in other words scale. Mid tier players in this scenario may increasingly be marginalized as the emphasis shifts to cost of revenues. Can one succeed in this business if not a front-runner or a tightly focused niche player? Does this move force Intermec and Datalogic's hand?

There are clearly many other issues to evaluate and discuss - from PSION's innovative social media programs to the potential cultural rift between these two organizations. Bottom line, the transaction provides interesting TAM expansion opportunities for Motorola while turning the page on a mobile computing maverick.

Several things to love...and question...about Microsoft's Surface

With the announcement of Microsoft's Surface tablet the company with one of the most storied histories in the tablet market is 'back' in the game. Stealing a page from Google's playbook the Surface is a Microsoft developed device running its yet to be released Windows 8 RT (the version running on ARM processors). A Windows 8 Pro version running on a third generation Intel Core processor is expected 90 days following the initial release. There is much to like yet much to also be concerned about regarding this product announcement.

The move for Microsoft to introduce its own tablet is clearly an interesting one given its history with OEM partners like Dell, HP, Sony, etc. One could argue that the 'appliance model' perfected by Apple is what Microsoft is looking to emulate and what is needed for the to succeed in today's market. While this move will undoubtedly leave many OEM partners concerned - especially considering Microsoft's potential pricing advantages - it should be interpreted as a message for them to elevate their games and bring innovation back to the table. Now is not the time for a dozen Ubuntu permutations to hit the market.

The benchmark against which all tablets are being measured for obvious reason is the Apple iPad. While this is an important measuring stick for new tablet entrants, it is equally important for new entrants to innovate - all too often absent in today's rapidly introduced 'me-too' products. While it is hard to envision the Surface eroding much of Apple's iPad position in the near term, it can seriously challenge Android's tablet fortunes in several markets (such as the enterprise).

Some of the more compelling attributes of Microsoft's Surface (from an enterprise perspective) include:

1. Windows OS.While the consumer is taking over and non-technical officers such as the CMO are gaining more control in mobile solution specification among enterprises (minimizing the role of IT) the fact remains that the installed base of Windows in the enterprise is massive and Windows represents the de facto enterprise computing platform for almost all organizations. Key assets such as Active Directory, SQL Server and Exchange Server and LDAP directories are too significant hurdles for most other vendors to overcome.

2. I/O. As much as the market laments the idea of using a keyboard with a tablet, the fact remains that for serious content creation, a physical keyboard is necessary. While the Surface's integrated cover/keyboard won't be mistaken for a traditional PC keyboard it has the potential to be a key differentiator. Moreover, other I/O ports such a USB (2.0 for RT and 3.0 for Pro versions) are important features.

3. Businesses Can Build and Run Custom Apps. (Although not as much a Surface as opposed to a Windows 8 benefit) using the Windows 8 development tools, companies can create their own applications that can be deployed within company firewalls, circumventing the public Windows app store. Apps can be viewed full screen on a Windows-based PC and support multi-touch technology. This is good news for ISVs looking to expand their reach into the massive PC market and offer custom applications for individual businesses.

4. New Security Programs. Windows 8 boosts Microsoft’s existing security tools with the addition of BitLocker Drive Encryption and AppLocker. BitLocker encrypts on the data that’s actually being used by an employee rather than all the data on a computer, hence decreasing the time it takes to secure a device. AppLocker allows companies to control which apps employees have access to in an attempt to curb accidental virus and malware corruption.

5. Display.While slightly the larger display (in comparison to the iPad) is compelling, the potentially killer attribute is the display's optical bonding. The key benefits of optical bonding (over other touchscreen approaches) is that it provides a richer experience by minimizing glare (critical in ambient light conditions) and improving contrast making the image clearer. The challenge is will  be able to deliver this is at a price point on par with the competition.

6. SmartGlass. This represents some of the innovation that is sorely needed from Microsoft. While the core SmartGlass functionality is available on competitive platforms (such as Apple's AirPlay) the integration of various multimedia types (from gaming to broadcasting, for example) is unique.

Conversely, there are several attributes and concerns with the Surface that give us pause. Some include:

1. Apps. This can go both ways. The appeal of these devices is largely associated with the apps eco-system supporting various user experiences and use cases. Clearly AppStore and Android's MarketPlace dwarf what is available for Windows Phone 7 smartphones and now Windows 8 tablets. That said, while the volume of available apps running on Windows devices appears limiting (at a mere 100K) ALL the important/killer apps are available.

2. Timing. While Microsoft has clearly been patient with the development and pending release of Windows 8, announcing a product like the Surface well in advance of its actual release date could end up hurting them once the product becomes available. Although it was prudent for Microsoft not to rush out Windows 8, it needs to counter the momentum shift towards Apple and generate buzz around Windows 8 tablet solutions. However, similar to what happened to RIM with the Playbook release, maintaining a high level of interest and excitement between the announce and release dates is a challenge. Especially when what Microsoft needs more than anything else is units in users hands.

3. Enterprise Windows 8 Plans. The enterprise is in no rush to upgrade to Windows 8 in the near-term. In fact, if history is any gage, it will likely be 12-18 months before meaningful Windows 8 upgrades occur. Will enterprises invest in Windows 8 tablets in advance of traditional PC upgrades?

Microsoft's success in the tablet market will be measured by millions of unit shipments. It needs to get units into the hands of users to create momentum, excitement and ultimately innovation in its broader eco-system. At the end of the day it is about the experiences - both consumer and professional - that will determine the success of Microsoft's tablet strategy. Providing a strong product is only part of the story. It will need the commitment, investment and support of its partner community to realize this vision.

Will IT Buy Into the Enterprise App Store?

The proverbial stars have aligned – device proliferation, app development tools, mobile broadband, and a burgeoning apps ecosystem created a significant opportunity as organizations mobilize business processes and workflows.

Source: VDC Research, 2012

Not only has device proliferation and the expanding apps ecosystem extended the virtual boundaries of the enterprise, it has also blurred the lines between “home” and “office” and has opened up new opportunities for both business-to-employee (b2e) and customer-facing applications. Determining the scenarios for these engagements and using the right tools to both design and deploy mobile applications has, and will continue to be key for organizations as they expand their mobile workforce. While this mobile computing cycle is just getting started, the software ecosystem itself is growing up quickly, bringing opportunity for both mobile oriented ISVs and for organizations that have implemented mobile strategies to both customize and fully integrate mobile solutions into their existing technology platforms.

As depicted above, the capabilities of mobile applications have evolved significantly over a short period of time – today’s iteration of mobile applications has changed the face of business by providing operational advantages that have become indispensible in many industries.  Advancements in both our wireless broadband infrastructure and in the capabilities of mobile computing solutions have provided organizations with an opportunity to not only adopt an expanded range of enterprise-grade mobile applications, but to drive top-line growth while improving the bottom line.

MAM platforms and tools will play a key role in this enablement, as they bring organizations the ability to leverage the potential of enterprise applications for both its internal and customer-facing business applications.  As mobile adoption continues to surge in the enterprise, having a broad and sophisticated application portfolio will drive significant competitive advantages, as it can enable enhanced productivity, superior customer engagement, and improved supplier relationship management. 

These points will be expounded upon in an upcoming Enterprise Application Store / MAM report which is due to publish later this month.

iOS6 Enhancements for the Enterprise – More by Accident than by Design

Although iOS 6 won't be available to the public until later this fall – as per usual, it will be released with the next generation iPhone – the first beta build was released to developers in conjunction with Apple’s WWDC event earlier this week. As always, Apple’s announcements attracted strong buzz in the consumer markets – few of the 200+ updates, however, translate to support enterprise mobile deployments.  Below, VDC has highlighted the top five enterprise-relevant applications to be updated in iOS6:

1.  Mapping

• Vector-based map elements for smoother graphics, Turn-by-turn directions, 3D mapping, and live traffic information 
• Share location 

2.  Shopping

• Passbook for virtual storage of tickets, loyalty cards, and coupons 
• Integration with Yelp, OpenTable 

3.  Productivity

• Support for FaceTime on cellular networks - (Unified Communications)
• iCloud SDK – storage, sharing of docs 
• Offline reading of Safari webpages

4.  Security

• Lost mode enables immediate device lock with a Passcode and a contact number to appear on-screen – Enterprise
• Manage which applications have permission to access their contact information
• Guided Access to enable locking of device into a single app  (Education)

5.  Mail

• Open password-locked documents in mail and pull-to-refresh for messages
• VIP feature in mail for enhanced organization

 

Ousting Google’s software, Apple has invested substantial resources to develop more sophisticated mapping and directions technology.  Real-time updates in traffic information, turn-by-turn directions, and location sharing (with other iOS users) will have implications for the transportation industry, public safety organizations, and other field-service companies.  Along with the BYOD devices employed in these industries, many organizations deploy iPads and iPhone for use in-vehicle, when rugged-grade technology is not required.

Apple’s announcements around Passbook and integration with Yelp and OpenTable will have a strong impact in the retail vertical, further driving retail organizations to mobilize their workforce and to take advantage of these new channels to increase brand awareness and demand.  This is also another jab at Google, responding with Passbook to compete against Google Wallet.

The final three areas VDC would like to draw attention to are updates to productivity, security, and Apple’s mail application.  While Apple’s focus remains on the consumer market, these solutions will see support in the average enterprise that allows BYOD devices, as these updates will enhance security capabilities and improve employee productivity.  In all, while these updates are not designed for the enterprise, neither was the iPad…Nonetheless these updates will be appreciated and further amplify the relevance of Apple – and consumer-grade technologies as a whole – in the enterprise.