VDC Research: Enterprise & Government Mobility Market Blog

New Vendors Looking to Erase BlackBoard's Hold on the K-12 Market

To say that the education software market is in a state of flux would be an understatement. The fragmented field of Goliaths such as BlackBoard and Desire2Learn are nervously holding tight to their reigns of market share as startups like  Instructure and Haiku sling their innovative software to schools left and right. The education market is ripe for change, and nowhere is this reflected more clearly than in the amount of new entrants and venture funding pervading this market.

The past few weeks have seen both Instructure and Silverback Learning Solutions receive venture funding to advance their educational software solutions. While Silverback – a newer entrant in the ed tech market – received a modest $2.5 million, this funding announcement is symbolic of an unsatisfied market. Silverback has a focus in the K-12 market and aims to combine educational resources, data, and accountability into a platform developed with ease of use and implementation in mind. It seems that many of the dominant players in this market offer solutions targeted at higher education, with expensive, robust tools that are not congruent with the needs and capabilities of the K-12 market.

The K-12 market in particular has been slow to adopt the technology that higher ed institutions have invested so heavily in. Extensive analytics, robust classroom management features and complex platforms simply have not found a home in the K-12 market. For one, many K-12 schools are public and therefore face budget constraints with little room for a massive technology upgrade or the training to leverage it. Further, priorities tend to point to achieving state standards and compliance with educational mandates, thus influencing the types of technology adopted.

Instead of more complex management tools, the prevailing trend seems to be changing the dynamic of the classroom. The main focus is on student to student and teacher to student collaboration as well as personalized learning. Any technology vendor looking to enter this space must also offer a solution that is feasible, intuitive, and easy to integrate with existing systems.

While there are software solutions such as Haiku and Schoology that strive to cater to these realities, they are not on the same level as the BlackBoards and Desire2Learns of the market. It is safe to say that the K-12 market is still relatively immature, but eager for an upgrade.

As a result, it will be interesting to see what revenue backed giants like BlackBoard decide to do moving forward. Will they create more K-12 centered solutions or opt to acquire the startups that have been inundating the market as of late. The only certainty is that the market won’t tolerate new entrants forever. Which vendor has the class to outperform the rest is still yet to be tested.

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A Square Service in a Round, Cash Market?

Mobile payment platform Square is now processing more than $15 billion in annual payments with roughly half of its 2 million US customers stemming from iPad users. In addition, Square recently released its new Square Stand cash register for its line of small business solutions. This momentum has fueled last week’s announcement that Square is set to enter the Japanese market – its first country outside of North America – through a partnership with Sumitomo Mitsui Card Corporation.

Unlike in the US, NFC and mobile payment solutions are not a new phenomenon in Japan. The service has been around for the last eight years and is perceived to have matured considerably under the leadership of competitors such as:

• NTT DOCOMO
• KDDI
• PayPal

Rather than offer “old fashioned” swiped payments, these companies have relied on Osaifu-Keitai, or a mobile wallet that leverages NFC chips embedded in mobile phones. In fact, the vast majority of mobile phones in Japan are preloaded with mobile wallet technology. On the surface, the mobile wallet appears pervasive, leaving little room for swipe technology offered by Square. However, research has indicated that while mobile wallet technology is widely distributed as a function of mobile phones, these applications are not widely used; there are mature players in the market but not widespread adoption.  Japan is still, in fact, a cash driven society.

With a little room in the market, the question arises as to how Square will choose to enter and compete with mobile POS powerhouse PayPal and pioneers like KDDI when NFC has yet to command interest in the Japanese market. The answer seems to be incentives.

For example, Square recently revealed a beta version of SquareCash in which money can be delivered via email directly to a recipient’s debit card. The company also introduced SquareWallet – its own take on NFC mobile payments. KDDI has leveraged strategic partners such Japan Airlines to offer NFC airline tickets and loyalty programs through Bic Corporation.  These companies are trying to make mobile payments attractive to the Japanese consumer that tends to value convenience above all. 

While mobile wallet vendors strive to grow their market penetration through various partnerships and incentive strategies, future evolution of the mobile payments market will be largely determined by consumer and retailer preferences. 

We see future growth limited – to a large extent – by consumer questions concerning the security of mobile payments and the price of transactions, in addition to their persistent penchant for hard cash. Further, retailers could prove just as important a market to win over for vendors looking to gain market share.  Value for retailers may stem from the capacity of these solutions to facilitate operational efficiencies, improved inventory management and an enhanced ability to leverage customer data. Retailers will look to be able to print receipts, refund capabilities, and the ability to track cash payments among a variety of other applications designed to increase retail efficiencies.

While swipe technology will most likely face an uphill battle in Japan due to the established NFC infrastructure, Square could find success if it plays its cards right - by embedding them in the phone and focusing its efforts on retailers as much as consumers.

Apperian Automates Custom App Deployments

Apps are the reason why we all love our devices, and our future is without question going to be app-centric. From a business context, we see organizations continuing to advance their mobile strategies and move well beyond just providing their employees access to email towards broader usage of productivity and collaboration applications (which are increasingly custom developed apps). Enterprise-oriented ISVs are also very active in sharpening their mobile focus and expanding their mobile applications portfolios ― additionally, data from a recent survey we conducted into the usage of app development platforms/tools shows that organizations are (finally) beginning to meaningfully take advantage of these solutions to create custom applications.

While there are several approaches to enable secure app management that include containerization, OS partitioning and virtualization (to name just a few), an app store component is core/key as it not only facilitates app discovery and entitlement, but brings enterprise-grade security and IT-friendly features that can help to simplify app distribution and management.

Mobile IT Investments Required to Support our App-Centric Future

BYOD has clearly impacted and changed the way we work, and has brought to light the need for investment in 3rd party software tools to support expanding mobile workforces. Clearly investments in the enterprise have started with solutions to mitigate against the inherent security risks that come with supporting multiple mobile platforms ― however, secure and efficient app management capabilities are increasingly important for organizations that are actively developing custom mobile apps. While many organizations are using a single platform approach from tenured vendors like Antenna, Kony or Verivo, several large multi-national organizations I’ve spoken with not only use multiple development platforms and tools, but are dissatisfied with the manual and often cumbersome processes associated with deploying custom apps they’ve developed. In this vein, functionality that can streamline app delivery while not “locking” a user into only using a single tool for all of their mobile app creation and deployment needs will be welcomed ― any mobile-first vendor that can deliver this capability will also be an attractive partner for organizations that are expanding their usage of custom mobile applications.

With the announcement of its Publishing API Program, Apperian has brought its customers the ability to publish apps directly from the UI of its program launch partners ― the initial partners that Apperian has disclosed with the official launch of this program include:

• Alpha Software
• Antenna Software
• AnyPresence,
• Appcelerator
• FeedHenry
• IBM Worklight
• iFactr
• Intrepid Pursuits
• Kawet
• Kony Solutions
• Verivo Software
• ViziApps
• Xamarin

While the list of participating partners includes the most popular development platform / tool vendors, Apperian’s publishing API is public, which gives additional vendors the opportunity to integrate and offer their customers one-click deployment to Apperian’s application management platform.

Apperian continues to demonstrate it prowess in effective (and swift) partnering – I know for a fact that the company held numerous discussions at MWC to line up partners for this launch. The company recognizes its strengths, and has formed key partnerships with important security-oriented vendors such as Ping Identity for SSO, Mocana for granular app level policies and Appthority for app reputation/risk analysis to strengthen its platform and market position. As with all mobile ecosystem channel/partnership arrangements, there are varying degrees of coopetition between Apperian and several of this program's partners – for example, many launch partners have their own application management plays – however, this is to be expected, and I see this program as a significant development for organizations active in developing custom apps that have to deal with app signing, testing and other issues associated with piloting multiple version of apps that aren’t ready for full production environments.

IT Still Challenged

While MAM solutions ease app deployment, it is still important not to underestimate the complexity of upgrading an installed base of corporate app users, who are spread across geographies, languages, by carriers and platform. This, without question, makes for challenging deployment scenarios. These challenges are further magnified for IT when server changes require synchronization (a common occurrence in enterprise environments). For this program to be a success, Apperian will need to dedicate resources to co-marketing and sales training for its partners – I expect this, and will be eager to learn how customers are utilizing these capabilities.

Apple Shells Out $20M – Keep an Eye on the Location-Based Services Market

Shelling out just under $20 million, Apple purchased startup WiFiSLAM earlier this month (reported by the Wallstreet Journal), adding the company’s indoor mobile location services to Apple’s broad library of technological proficiencies.  As the market for context-based services heats up, this move suggests Apple’s intent to play catch-up with its competitors in the market. 

• On the hardware side, vendors such as Nokia, Samsung, Sony and CSR were founding members of the In-Location Alliance, which launched in August 2012 to “(pioneer) new business streams for indoor environments.”
• In the OS market, Apple’s maps mishap demonstrated its weakness relative industry giant Google, which has pioneered advanced mapping and GPS-based directional software.  Google is also driving the market in indoor mapping of venues such as airports and shopping facilities.
• On the software side, expect to see more acquisitions similar to this one, as startups continue to drive innovation in the space.  Vendors such as aisle411 – offering an indoor geo-fencing solution for retailers – will look increasingly attractive as the market heats up.

What’s on the horizon for Apple?

First, let’s take a look at what WiFiSLAM brings to the table:

• Real-time pinpointing of device location, to 2.5m accuracy
• Location-tracking based on buildings’ ambient Wi-Fi signals
• Calculate consumer’s location in ~90 seconds

Integration of these location-based capabilities will drive a new wave of applications facilitating enhanced personal interaction and engagement.  Expect to see retail organizations leverage this technology with targeted advertisement, social networking and other types of consumer engagement. 

How much ground will Apple gain in the location-based services space?

Let’s be sure to level-set expectations. This is an important step for Apple and – more importantly – a key sign of what’s to come from Apple and from the location-based services market as a whole. And yet, in the end, the proof is in the pudding.  Apple has had its sights set on location-based technologies for a while now, with several other acquisitions in recent years.  Time is running out for Apple – and others – to bring a solid, stable location-based product to market.

MWC 2013 Event Recap

I'm finally over my jet lag and wanted to share some perspectives on my visit to MWC ― Mobile World Capital moved the event to a new venue this year (the Fira Gran Via) a sprawling and massive conference center that definitely was designed for several concurrent conferences, but was required to handle the largest ever MWC attendance (72,000+ attendees). While MWC runs for four days, I left feeling like I could have used at least one extra day to see everyone I would have liked to (there were ~1,500 vendors exhibiting at the event). Barcelona definitely felt crowded, the streets, my hotel, and every restaurant was packed through Thursday ― getting a taxi was quite the challenge at the end of each day (not surprising given that all of the hotels near the show were sold out well ahead of the event). I definitely spent the majority of my time in meetings (and walking) ― the distance from hall 1 to 8 is >1KM, so the moving sidewalks were definitely appreciated.

Sick of BYOD? Get used to it ...

Given my coverage here at VDC, the majority of my conversations with vendors centered on EMM (enterprise mobility management) which continues to expand, with MDM at its core, and continued expansion of app management, security, authentication/identity management, virtualization, dual-persona (data separation / container solutions), app-level security (wrappers), and mobile content management. Bottom line, CIOs will be grappling with BYOD for some time, and vendors know it. The vendor landscape for these aforementioned enterprise mobility components continues to become more diverse with best-of-breed mobile-first startups continuing to provide complementary capabilities to enhance solutions.

A Layered Approach to Mobile Security ― Samsung KNOX builds on SAFE Initiative

The topical EMM example that generated significant buzz out of MWC was Samsung's KNOX announcement ― core to this solution is Samsung's proprietary security enhanced Android OS (commonly referred to as SE Android). KNOX enabled devices will feature a secure boot chain which leverages ARM's TrustZone technology to monitor kernel integrity and to ensure that only authorized apps can be run (this theoretically will prevent any KNOX enabled devices from being jailbroken ― this will be interesting to keep an eye on). The KNOX component that is getting the most media attention is the application layer security component to KNOX (the AES 256 bit encrypted container) as well as the native IPSec VPN for containerized apps ― this is an area that merits more than just a few sentences in a blog post, I'll be posting more on KNOX later this week. Samsung was involved in another important announcement last week ― the company has partnered with Red Bend Software for a dual-persona solution (a type 1 hypervisor) that is currently in beta in several large customers. I will be keeping an eye on this initiative, and look forward to seeing the results of the test deployments (beta customers have agreed to an extensive survey that will provide valuable insights on the UX and IT management aspects of dual persona deployments). What was most interesting was the competing vendors with their own "mini stations" inside the Samsung booth (tough to call it a booth ...) ― reps. from vendors like Fixmo, AirWatch, SOTI and Centrify standing just a few feet from each other...

AirWatch ― $1B+ Valuation

The rapidly growing EMM vendor was the enterprise mobility vendor that everyone was talking about on Monday morning at MWC ― when Ralph De La Vega (President and CEO of Mobility at AT&T) stops by to congratulate you, you know you've got everyone's attention. In case you missed it, AirWatch landed a $200M investment on the eve of MWC (Sunday night). AirWatch was one of the few vendors to have 2 booths at MWC ― the booth to drive traffic to their primary booth happened to be right next to SAP's booth ― suffice it to say, that AirWatch continues to be aggressive. I had the opportunity to participate in the company's user conference being held at MWC (AirWatchConnect) ― the event attracted key customers, featured an impressive lineup of both industry and analyst speakers and was well executed. While the competition is fierce, I still see the channel as being key. Vendors competing with AirWatch are increasingly focused on carrier relationships and continue to expand their solution range as well.

Product Launches ― Phablets and Lower Pricing

Other than the mid-range Windows Phones that Nokia released, the device story out of MWC was all about Android. OEMs such as LG, Lenovo, HTC, ZTE, Huawei and Nokia released new smartphones ― Sony, HP, Asus, Acer, Samsung, each released tablets ― the unmistakable trend is that the screen size race is continuing, and the prevalence of Qualcomm's quad-core Snapdragon processor (although Huawei's Hisilicon 1.5Ghz quad-core processor seems to be on par with the Snapdragon). Nokia announced its 301 and 105 feature phones aimed at emerging markets (Nokia mentioned China, Egypt, India, Indonesia, Nigeria, Russia, Vietnam and other markets in Africa, Asia-Pacific, Europe and the Middle East in its press release). The 105 features a numeric keypad (most impressive is the 12 hour talk time and month of standby time) and will retail for a remarkably low ~$20, the 301 will retail for ~$85 and packs smartphone like features ― both phones have Nokia's solid build quality, with the 105 being positioned as backup or emergency phones, both are also being positioned toward a younger demographic.

More on Nokia

Nokia remains challenged with its enterprise strategy ― the company is looking to Microsoft for support, but the folks in Redmond don't appear to be executing well with helping Nokia establish their OS as an enterprise contender. Meanwhile, Blackberry, Samsung and Apple continue to enhance their enterprise focus ― Nokia still produces high quality products and has a broad range of devices that are appealing to consumers, however the clock is running out on both BlackBerry and Nokia to gain traction ― others such as Huawei, HTC and Lenovo may have an opening as well. 

Other tidbits

• The GSMA announced OneAPI Exchange to help foster collaboration between operators and developers (partners include: AT&T, Deutsche Telkom, Orange, Telefonica, and Vodafone)
• Mobily announced a partnership with Jasper Wireless to help integrate M2M solutions across a broad range of connected devices (e.g., automotive telematics, smart metering and infotainment products) ― Jasper will provide cloud-based applications and management services to Mobily.
• 17 mobile operators committed to support Mozilla's mobile Firefox OS
• Companies such as IBM, Intel, Ford, Samsung, and SAP participated in unveiling of GSMA's Connected City - a nice concept that really did provide a forward look at the potential cities of our future where everyone and everything can benefit from intelligent wireless connections.
• There are lots of demos of M2M in operation at MWC, many of our discussions with operators and service providers centered on how they intend to participate in empowering the market with advisory, implementation, and value-added services, aimed at specific verticals or use cases. It’s clear that an increasingly broad range of vendors see M2M as a vehicle to lift their bottom line and are architecting solutions and services based on connectivity that are tightly coupled with data collection and analytics.

Didn’t get to MWC? Here’s a link to a gallery of assorted pics from the event ― the largest mobile event of the year definitely lived up to its billing …

M2M Channel Matchmaking at MWC

M2M is increasingly the hot topic at events like this week's Mobile World Congress 2013 in Barcelona. Technology vendors across the spectrum - from device and chipset hardware vendors to ISVs, mobile network operators, systems integrators - took this event as an opportunity to announce new partnerships in the M2M space.

Today's M2M ecosystem is messy.   It is fragmented, complex and - to a large degree - undefined.  We are just at the tipping point of recognizing the full implications M2M technology will have.  Thus the startlingly long list of M2M partnerships announced this week indicates a clear M2M strategy by today's technology vendors.  

Vendors such as Jasper Wireless,  Deutsche Telekom and RACO Wireless are looking to establish themselves as early leaders in the evolving M2M market.  In another sense, these vendors' partnering frenzy highlights the fear of falling behind as the M2M market evolves.  2013 will see the M2M market and vendor ecosystem slowly begin to fall into place.  

Partnerships Announced at MWC 2013 - Barcelona

• Axeda - Wipro
• Deutsche Telekom - Axesstel
• Deutsche Telekom - Qualcomm
• Device Cloud Networks - Orange Switzerland
• Ericsson - SAP
• Ericsson - Germalto
• Jasper Wireless - Mobily
• Jasper Wireless - Optus Business
• Jasper Wireless - Claro Brazil
• RACO Wireless - Sprint
• RACO Wireless - Telefonica

Samsung Continues its Creep into the Enterprise Market...Launches KNOX at MWC

Tuesday, February 25th, Samsung launched its latest mobile solution - KNOX.  KNOX is a dual-persona platform, enabling two distinct environments to exist simultaneously on mobile workers' device.

BYOD continues to challenge IT, driving complexities in multi-OS management, BYOD vs corporate device management, and security management.  Samsung is betting on the dual-persona concept as the path forward. While the concept has existed for several years (with Enterproid one of the first to market with a solution), its adoption has been slow.  

Yet, KNOX is clearly an attractive solution:

• For consumers, the KNOX will simplify management of corporate versus personal data and protect personal data/content from access by IT.
• For IT, KNOX facilitates containerization and enhanced security of corporate content, integrity management services, easy integration with existing MDM, and VPN services, as well as simplified management of employee devices.

While the solution clearly has some drawbacks (e.g. limited to Samsung GALAXY devices, Android-only, available only on select Galaxy devices starting in Q2 2013), this was a bold move by Samsung.

The BYOD trend - driving consumer-grade devices into the workplace and increasingly complex mobile infrastructures - has represented a clear market opportunity for Samsung to more fully penetrate the enterprise market.  Launching the SAFE (Samsung Approved for Enterprise) program in 2011 for certifying enhanced device security, KNOX will further drive Samsung's penetration into the enterprise market.  

For traditional enterprise mobility vendors, this announcement should be a red flag - Samsung is determined to carve its own place in the enterprise market.

 

Stay tuned for our next post on this announcement by Eric Klein, Senior Analyst - currently at MWC Barcelona.

Mobile and Channel First

As I began tracking and following the evolution of mobile-oriented solution providers and their channel relationships, I quickly recognized that co-opetition was a fact of life for many market participants. This has historically been the case for rapidly expanding high-tech market segments (just think back to the ecommerce and dot-com boom in the late 90’s). This trend is unmistakable in today’s rapidly expanding market for enterprise mobility solutions. I see competitors that are cooperating to integrate their solutions, collaborating to help set new industry standards, and/or even co-innovate to develop new solutions.

When considering both the current evolutionary stage of today’s IT organization and the state of the Fortune 1,000 supply chain, it is clear that mobile-oriented vendors increasingly will need to partner in order to reach these organizations – direct selling is essential, but is costly and not easily scaled. Today’s organizations are “more global”, they recognize IT as a differentiator, and are beginning to make meaningful investments to modernize their IT infrastructures – for forward thinking organizations, mobile solutions are playing a key role. Another important trend to be mindful of is that most large organizations are more than willing to outsource significant elements of their IT infrastructure and work with numerous channel partners. In summary, in order to capitalize on the opportunity in front of them, companies participating in the mobile ecosystem must partner – often with their competitors.

In this vein, we expect to see several important partnerships announced in the near term – both at RSA and at MWC. Key themes will be partnering for solution enhancement and better positioning to attack specific markets such as government and regulated industries. This has begun in earnest, with many more announcements to come next week.

For example, just yesterday, Fixmo announced partnerships with both AirWatch and MobileIron, and Air Patrol announced it was partnering with Fiberlink.

Looking forward to MWC next week – if you are making the trip, please stop by the AirWatch booth (Hall 3) to see my presentation on the future of mobile application management at AirWatch Connect!

Ping me on Twitter (@eakleiner) to meet at MWC next week ― I'll be in town until Thursday.

Will AT&T's Attention to Mobile Developers Pay Dividends?

AT&T held the 8th iteration of its developer summit this past January in Las Vegas. The event kicked off with the company’s first “hackathon” of 2013 (AT&T held 28 of these in 2012) and offered attendees a full day of mobile-oriented sessions, ranging from technical deep dives to go-to-market strategies for enterprise-oriented developers. This was my second year attending this event, and I came away with a very positive impression of AT&T’s commitment to fostering its community of developers. It is clear that the company is raising the profile of the event. Not only was the attendance up from 2012 (with ~2,700 developers on hand, this was the largest event to date), but AT&T has also added executive presence to the event. Ralph de la Vega, the President and CEO of AT&T Mobility, typically keynotes this event; however, this year he was joined by other key executives, including the company’s CTO and CMO. AT&T also landed Cisco’s Chairman and CEO John Chambers as a keynote speaker and “rock stars” in developer circles like Christian Heilmann from Mozilla to lead breakout sessions. Scheduling the event ahead of CES was a smart move, as it gave the event a good representation of both the media and analyst communities (as well as a critical mass of mobile-oriented developers).

Click here to read this entire research note.

Solving the BYOD Challenge Without Managing Devices

Join me on February 6th to learn about enterprise-grade mobility solutions for BYOD environments

As a long-time industry watcher you've likely seen many acronyms come and go (WAP, ASP, ISDN, etc.) ‒ BYOD is no exception, and will ultimately disappear from our vernacular as well. However, given that we are in the early days of mobile enablement, the trend is sure to impact the modern workplace for years to come, and will pose both an opportunity and a threat for CIOs and IT administrators who will ultimately be supporting an increasingly diverse roster of mobile devices.

While some might argue that the "genie is out of the bottle" and that we are well beyond the point controlling to usage of personally owned devices in the workplace, there very well may be potential for the pendulum swing back toward more centralized IT practices for managing mobile deployments if the ROI garnered from BYOD programs doesn’t materialize. Regardless, the issue will be top of mind this year and next for CIOs as they grapple with device diversity, billing, security, acceptable use policies and more as our mobile workforce continues to grow.

The BYOD trend has a broad range of market participants focused on solutions to capitalize on the opportunity that mobile enablement can bring while mitigating against the risks that comes with personally owned devices being introduced into corporate environments. While there are many viable options that have come to market, one solution category we see gaining traction is enterprise-grade "workspace" or "secure container" solutions that can improve the security and manageability of mobile platforms.

If your organization is grappling with BYOD and in the process of implementing a BYOD strategy, we would welcome your participation in this important upcoming webinar being sponsored by Globo PLC ‒ Solving the BYOD Challenge Without Managing Devices. We will be discussing how CIOs are dealing with the complexity that BYOD programs introduce, as well provide guidance on how your organization can alleviate the pressures associated with the mobile enablement of its growing mobile workforce. Globo will be demonstrating its enterprise-grade mobile solution that is flexible, scalable and designed with BYOD environments in mind.