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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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.

Local & Mobile: What Foursquare’s Debt Financing means to the Retail Sector

Last week Foursquare, the social and location centered app, secured $41m in funding from Silver Lake Partners and existing investors Andreessen Horowitz, Union Square Ventures, O’Reilly AlphaTech Ventures, and Spark Capital. Foursquare had a rocky 2012 as seen in:

• Only about $2m in revenue generated
• Questions concerning its business model by market analysts and retailers alike
• Analyst speculation  on a possible buy-out or failure of Foursquare

It raises the question as to why Silver Lake, a private equity fund that has financed companies such as friedola®Tech and Dell, would put forth such a large investment in Foursquare. The answer is the promise of big data and mobile devices in the retail sector.

As of yet,  Facebook, Twitter, and more than 40,000 other applications have integrated Foursquare’s platform into their mobile applications. Just last month, Foursquare announced the addition of MasterCard and Visa to its partner roster – a big step for a company that has spent three years developing its relationship with American Express. This will be a huge opportunity for retailers, enabling collection and mining of customer data not available through in store metrics including:

• Customer location
• Customer brand & product preferences
• Propensity to spend
• Effectiveness of marketing and ad campaigns

While millions of dollars are spent each year on broad market research and customer preferences studies, Foursquare fills a huge gap in the retail industry, offering real-time feedback on local consumers. Foursquare enables retailers to connect with consumers, evaluate customer preferences and behaviors, and target marketing and advertising programs to increase the size of transactions.

Our annual survey of IT decision-makers in the retail market  shows that the most important business initiatives impacting mobile computing strategies and investment in retail services are opportunities to improve real time decision making and increase sales. 

Our research into the impact of retailers using mobile solutions to engage with customers has shown as much as a 30% increase in customer loyalty and repeat business.. There is no doubt that customers are going mobile and there is a strong desire for their retailers to do so as well. Consumers benefit from a smarter, more consistent shopping experience that allows them to purchase the products that they want.

As applications such as Foursquare increasingly penetrate the market and are embraced by merchants, companies neglecting to take advantage of online and social channels will be at a competitive disadvantage. It must be recognized that although mobile and social applications present valuable opportunities for the retail sector, it doesn’t imply success. Engaging with customers on a personal level and utilizing social applications requires a different type of marketing. It also requires that store associates are properly trained and incentivized to leverage these more intimate customer engagement services in addition to hardware and software solutions compatible with a user’s mobile device and the Foursquare platform.

 As much as Foursquare offers valuable insight and opportunities for the retail sector, their overall success is still dependent on end users. Data can only be collected if mobile users continue to check in and engage with the application.

Further, Foursquare’s recent decision to allow more retailer advertisements on its application could have negative implications. The sheer number of deals and ads run the risk of turning away users by bombarding them with information. Overall, the market for mobile solutions in the retail sector is sure to increase in line with retailers’ desire to connect with and be more informed about their customers. The question if Foursquare can provide these solutions while balancing advertising revenue with a positive user experience remains to be unseen. 

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.

AirWatch Secures $200M in Series A Funding

Mobile World Congress 2013 kicked off with a bang for MDM startup AirWatch.  This 10-year old company announced the largest round of funding of enterprise mobility investment this year - $200 million, led by Venture Insight Partners.

 

This funding indicates further aggressive spending and investment by AirWatch to advance its position in the now crowded MDM market.  We see further growth opportunities geographically as well as in certain verticals (e.g. retail, where AirWatch works with Lowes and Home Depot).  

Given the company's history of strong investment in R&D, we expect this $200 million in funding to drive innovative product announcements and customer wins over the next 6-8 months.

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.

Going to MWC? Let's Meet

Please contact us to schedule a meeting at the Mobile World Congress event in Barcelona from Monday February 25th through Wednesday February 27th. 

We are looking forward to largest mobile event of the year, and hope to connect with you to learn about your enterprise mobility solutions.

To set up a meeting:

Contact Eric Klein, Sr. Analyst, Enterprise Mobility & Connected Devices Practice, VDC Research Group.

 

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.

 

2013 Predictions - Part 1

Mobile Developer Skills Gap a Growing Issue

There is a massive shortage issue and skills gaps when it comes to enterprise mobile developers. According to VDC's research, IT departments rate their mobile support capabilities lowest in comparison to other more traditional IT services. While mobile development is one of the faster growing job segments, most developers are drawn to more consumer and media oriented development work. Developing sophisticated enterprise mobile applications with stringent security and backend database integration requirements - and where more complex native development remains pervasive - has represented a less appealing career choice.

Although the trend towards HTML5/Javascript for enterprise mobile solutions is potentially expanding the developer pool to more traditional web developers, a skill set disparity remains. In the case of HTML5 for enterprise mobile applications, strong coding practices are required to address and overcome many of the limitations inherent with HTML5 - such as the asynchronous nature of HTML5/Javascript. This is going to represent a major issue for enterprise mobility in 2013 and possibly years to come.

Flipboard for the Enterprise:  Enterprise Mobile Applications as the Next Wave of Consumerization

As the past few years have seen a rapid influx of mobile devices into the enterprise space - led, of course, by Apple's iPhone and iPad - so too have we seen traditional consumer apps optimized to target the enterprise market, such as Dropbox, Yammer, Salesforce Desk, and Jobvite. And yet - not for lack of trying - the award-winning Flipboard app for social news aggregation has not encountered an enterprise-ready counterpart.

First launched in mid-2010, Flipboard has garnered a worldwide following, facilitating intuitive flip-through navigation of personalized social and news content. One of the more notorious Flipboard rivals targeting the enterprise is Moprise. The company's app - Coaxion - enables real-time collaboration and document access, both online and offline, via services such as SharePoint, Dropbox. Despite VC backing of over $500k and successful partnership with QuickOffice, Dropbox, SharePoint and others, the app has yet to take off in the enterprise market.

Mike McCue, co-founder of Flipboard, tweeted in May of 2012:  "How do I feel about all the Flipboard clones? I'd rather be competing with 1,000 copycats than 1,000 innovators." While the incredible success of Flipboard in consumer markets hints at a similar opportunity in the enterprise market, McCue is spot-on in highlighting the vast importance of true innovation and optimization in design of a "Flipboard for the enterprise" application. The challenge will be to maintain Flipboard's end user-centric appeal and presentation while integrating corporate news, content, or collaborative elements. VDC sees a sizeable market opportunity for a Flipboard-esque enterprise app and expects continued competition and innovation over the next year as organizations look to capitalize on Flipboard's key value propositions (content aggregation, personalization, attractive UI/UX, visual appeal, consistent cross-platform experience), while optimizing the content, collaboration, and sharing features to suit enterprise requirements.

Rugged Mobile Community will Struggle with Balance as Market Segment Matures

That the rugged mobile community experienced a correction in 2012 is an understatement. With the rugged handheld and data collection focused vendor landscape undergoing massive consolidation - with Motorola Solution's acquisition of PSION and Honeywell's pending acquisition of Intermec - and other solution providers such as GD-Itronix end of lifting much of their portfolio - the outlook is increasingly uncertain. While the need for rugged solutions in a variety of end use markets is clear, the growing maturity of the opportunity coupled with the increasing commoditization, diminishing differentiation (and innovation) among vendor solutions and continued vendor fragmentation are combining to drive continued vendor and product consolidation.

An additional challenge in 2013 for this community will be influenced by their strong ties to Windows OS platforms. While several vendors have experimented with Android solutions, traction in target markets has been limited. Moreover, the forthcoming changes to Windows Embedded Handheld and noted issues with backward compatibility with legacy applications is a well documented concern as is the viability of Windows 8 (Pro) for these vendors 2013 tablet initiatives.

Where we do expect to see innovative developments and opportunities for this community moving forward will be in the shift from legacy rugged handheld to rugged smartphone solutions especially around the integration of mission critical communications capabilities - such as support for Public Safety Band 14. In addition, we anticipate greater opportunities and focus around rugged tablet solutions - in part as a displacement for existing mounted rugged notebooks but similarly in support for new applications and workflows.

New Entrants to Drive Increasing Competition in Mobile Content Management

The past few years have seen the steady trickle of mobile devices into the enterprise evolve into a widespread wave of BYOD support. And yet, while enterprise support of BYOD devices may appease employees' desire to use their personal devices in the workplace, organizations are currently inhibited from capitalizing on the considerable potential mobile devices offer to transform the enterprise. VDC's 2012 survey of enterprise IT decision-makers revealed that just over 40% of organization allow employees to use productivity apps on their personal devices. Even fewer (~28%) empower employees with access to specialized line of business applications. And yet, organizations are increasingly recognizing the limitations of these restrictive policies, which counteract the core advantages of mobilization initiatives (enhanced productivity, real time decision-making, customer loyalty, sales.)

Partnering with Oracle to deliver solutions for Oracle Universal Content Management, Fishbowl Solutions represents an early player in the mobile ECM (enterprise content management) space. Deploying the company's Android or iOS applications, organizations are able to empower workers with mobile access to the ECM system, while ensuring security of corporate data and systems. Over the next year, we will see increasing competition in this space, as established content management vendors adapt current ECM solutions to meet the unique requirements inherent to mobile environments. Emphasis will shift from device management (MDM) to more sophisticated content management through digital rights management, encryption, authentication, data loss prevention, geo-fencing, context-management, and other technologies facilitating administration of users' access, storage, and synchronization of enterprise content.

CES Kicks off Q1 Event Season

CES - check, up next NRF, AppsWorld, and MWC!

The 2013 event season is officially underway, last week ~35K exhibitors and ~150K attendees gathered at the LVCC for the 46th annual (believe it or not) Consumer Electronics Show. While some are saying that the show is losing steam, I saw no evidence - in fact, the show seemed larger than in past years, with a crowded show floor and very long lines for taxi cabs when it was time to clear out each evening.

Keynotes included high-profile tech luminaries such as Qualcomm's CEO Paul Jacobs (who was joined by Microsoft's Steve Balmer), Samsung's Device Solutions President, Stephen Woo (joined by Bill Clinton), CEA President Garty Shapiro and Panasonic's President Kazuhiro Tsuga. Each showcased their latest innovations which ranged from Ultra HDTV, high speed energy efficient processors to new display technologies that enable bendable and foldable screens (sign me up for the folding 5" Smartphone). I didn't have the opportunity to see each of the keynotes live, but have watched them all online - while there was no category killer or visionary product launched, there certainly are some innovative and important advancements happening around System on Chip (Samsung's new Exynos processor features dual quad-core ARM-Cortex cores (that's a mouthful) that "load balance" processing tasks), solid state drives featuring higher densities (1TB), the connected home and car, and TV's boasting 4x the pixels of 1080p displays. Naturally, I was more inclined toward the mobile-oriented news from CES - there was some, but based on what was released, I think its safe to say that we can expect to see many more announcements out of MWC in a few weeks.

It was a relatively quiet CES for mobile this year, but even a quiet CES is a busy one. Several notable mobile-oriented announcements out of CES included Huawei, Lenovo, Sony, and ZTE each announcing new flagship Android-based Smartphones, (making it extremely likely that HTC, LG, Nokia, RIM (whose executives were in town to show off the near final version of the upcoming BlackBerry 10 OS), and Samsung will have something to announce in Barcelona). There was also news on the mobile OS front this past week, Linux-based Tizen (backed by Intel) and Unbuntu (from Canonical) are both likely to show up on devices later this year. Samsung revealed plans to release a Tizen-based device later this year (this was a hot topic at the company's analyst breakfast), Unbuntu who has yet to land a hardware partner demonstrated to me live and in person that their OS was ready for prime time (lots of interest at their booth).

While vendors focused on the enterprise didn't have a presence at CES, they were at the show. AT&T hosted it's 8th annual Developer Summit, with the company's always energetic President and CEO of Mobility Ralph de la Vega kicking off the event. Others had their enterprise-oriented executives on site - Nokia hosted analyst briefings, along with Samsung, and mobile-first vendors such as Good Technologies.

Stay tuned for VDC's Mobile & Wireless team's next event recap – NRF.