39 posts categorized "Industry Events"


Unpacking Samsung’s MWC – Enterprise Implications

VDC met with Samsung at Mobile World Congress this week in Barcelona to discuss the company’s take on enterprise mobility as it announced the launch of the much-anticipated Galaxy S5. The smartphone, with its IP-67 rating for dust and water resistance is the second in Samsung’s lineup for a more ruggedized consumer device after the S4 Active. The latest product in the Galaxy family is leading the trend towards more durable, enterprise-oriented smartphones that continue to blur the line between consumer and enterprise devices that will only turn up the heat further on ruggedized OEMs, who are facing increased competition from their consumer-grade counterparts. In addition to a more ruggedized build, the S5 boats other enterprise-friendly security features such as two-factor authentication that incorporates both password and biometric verification, and the inclusion of its KNOX mobile security solution.

Refining mobile device management with KNOX 2.0

Although KNOX was originally announced at last year’s Mobile World Congress and launched in October of last year, Samsung has brought the security solution back into the headlines with the software’s second iteration as KNOX 2.0, which boasts a compliment of features like cloud-based enterprise mobility management (EMM) targeted at SMBs, a dedicated Knox Marketplace for enterprise applications, and support for third-party containers, such as Good Technology, MobileIron and Fixmo. While the newest version of the solution does not require applications to be wrapped (due to kernel enhancements) in order to work with KNOX, we wonder whether apps will need to be modified in order to work, and whether this could pose a potential problem for Samsung down the road.

As of yet, the activation rate remains modest, with 1 million user activations to date out of the 25 million devices that feature KNOX capabilities on the market today, although the manufacturer revealed to the media that it now see a monthly activation rate 210,000 devices. KNOX 2.0 firmly underscores Samsung’s belief in the solution’s potential in an enterprise setting, as the firm currently has 2,000 engineers working on KNOX and has partnered with 42 carriers globally to provide the solution.

Building a greater service presence

While Samsung has made considerable inroads into enterprise mobility with its hardware and MDM solutions, there are still considerable gaps on the service side that will need to be addressed, especially in looking to service Tier-1, multinational firms. Samsung has handily proven that it has the hardware capabilities to be successful with consumers, but to truly be successful in the quest to become more enterprise-friendly, it will need to get closer to clients. This is not to say that Samsung should build out direct sales; rather, the firm needs to establish a more direct relationship, both with partners and with end-users. In this vein, Samsung has had some early success; the company has been working closely with DMI on the massive DISA contact, and is expected to provide new details on the program’s expansion soon. Earlier this week Samsung revealed that it has entered into a strategic alliance with GEMA who continues to draw important partners into is ranks. While these relationships have put Samsung in a strong position, the company has a target on its back. BlackBerry has stumbled, but the company continues to maintain large enterprise deployments, and is betting big on the enterprise market as a mean of survival―others such as Lenovo and Microsoft are also in hot pursuit of the enterprise market and certainly have an opportunity to challenge Samsung going forward.


Rumors and Rugged Consumer Devices at Mobile World Congress

Lions and tigers and phablets, oh my!

With Mobile World Congress looming on the horizon, there has been considerable buzz surrounding the anticipated unveilings in Barcelona. The enterprise-friendly range of display sizes continues to grow, with rumors of HTC introducing a new member to its line of Desire phablets, and LG’s recent confirmation of the G Pro 2. This reinforces predictions of phablet use to grow significantly in 2014, particularly within business environments. The increased focus on mobile devices in a data-centric setting and desire for larger screens could help bolster the form factor’s popularity, despite its unwieldy size and ungainly nomenclature.

 “Samdroid” continues its enterprise push

Other anticipated launches include Samsung’s Galaxy S5, which could help the firm make further inroads into a predominantly Apple-dominated enterprise setting.  Nokia has also garnered considerable attention with talk of the Nokia X being launched at MWC. Leaked images of the Android OS featuring Windows 8-style tiles has people both intrigued and confused, especially given its new relationship with Microsoft. The device also raises questions as to the possibility of devices capable of running on multiple platforms, which could potentially be alluring in enterprise setting, particularly for BYOD.

Smartphones get tough

Meanwhile, VDC is keeping an eye on manufacturers like Kyocera and Sonim, who are making inroads into the consumerization of ruggedized features that have traditionally been associated with specialized enterprise devices. As price points continue to drop, this could pave the way for consumer-grade devices that boast greater levels of ruggedness and environmental protection, particularly in regards to water-resistance. While current options for non-enterprise rugged smartphones are limited, announcements from MWC could well herald a shift towards more durable consumer devices and create an upset among more traditional rugged manufacturers.

Big changes on the horizon

While VDC anticipates announcements at Mobile World Congress to highlight the continued development of devices that are increasingly enterprise-capable both in regards to performance and form factor, we nevertheless believe that the truly disruptive technologies are still on the horizon. Right now technology such as flexible displays and wearable devices are in their infancy, and have generated significant buzz, but current pricing and a lack of widespread practical applications have meant that they are primarily in a proof-of-concept stage. If the technology is able to move beyond this and gain more widespread acceptance, it has the potential to revolutionize the mobile device market…just not this year.


NRF: Mobility Trends for 2014

The National Retail Federation hosted its annual exposition in mid January at the Javits Convention Center in New York City. The two-day event featured 550 retail solution providers and nearly 30,000 attendees, a record for the event. VDC’s Mobility Analysts David Krebs and Kathryn Nassberg took the opportunity meet and speak with a variety of retail technology solution providers and retailers at the expo and observe the emerging mobility trends firsthand. These are some of their observations:

Competition between Microsoft and Android for rugged handheld share intensifies

The competition between Microsoft and Android is heating up in the ruggedized device arena. While Microsoft platforms remained the undisputed leaders in the rugged handheld sector in 2013, VDC anticipates that 2014 will be a breakthrough year for Android. Already, OEMs like Motorola, Honeywell, and Bluebird are offering ruggedized handheld devices featuring the Android OS, which is rapidly becoming a credible challenge to Microsoft’s hegemony in the rugged space. However, Android still has to prove itself in this arena and the market will closely follow the success of several large-scale deployments planned for the first half of 2014. As with any new platform, there have been growing pains in introducing ruggedized Android solutions, with many early products falling short of expectations. However recent release issues, such as application performance, scanner integration and security have been largely addressed. Nevertheless, the perception of Android as a less secure and fragmented platform persist and the rugged mobile OEM vendor community would benefit from a more cohesive approach in addressing these issues.

A much-needed development has been clearer communication among rugged mobile OEMs with respect to their development initiatives. Although much of 2013’s lack of direction was tied to Microsoft’s timeline, industry leaders such as Motorola Solutions created solution among partners and customers as they hedged between Microsoft and Android. The timing could not have been worse as the challenge from consumer devices (especially iOS) intensified. Today, we are seeing much greater conviction from rugged handheld OEMs regarding their Anroid roadmaps and believe that the devices and Android services available today can materially impact the market in 2014.  

Recent research among retail technology decision makers conducted by VDC Research in 2013 supports rugged vendor’s Android efforts. According to respondents currently using rugged handheld devices with plans to upgrade their legacy devices, over twice as many intend to migrate to Android-powered devices (33%) as opposed to Windows Embedded 8 Handheld devices (15%).

Apple loses some of its retail luster

Make no mistake; the use of Apple iOS mobile devices for enterprise mobile workflows is not going away. In fact, Apple continues to up its focus on the enterprise segments and the enterprise features embedded within its iOS devices.. However, following much iOS fanfare over the past two NRF events, VDC is hearing about retailers’ frustration with some of their Apple deployments with increasing consistency. Despite tremendous success in the consumer markets, the sheen has begun wear off for Apple devices for enterprises using the devices. Given Apple’s near-exclusive customer orientation, managing devices operating on iOS is no easy task and support in an enterprise setting is proving challenging. Moreover, firms are also encountering issues with wireless performance and supporting multiple users per device, further lessening Apple’s enterprise appeal. On top of these technical setbacks, there is also the pervasive issue of employee theft. VDC believes that in light of these issues, companies will increasingly look to other OEMs to meet their enterprise mobility needs.

EMV Compliance as a Mobile Payment Forcing Function?

The looming EMV compliance deadline of 2015 was a almost predictably absent theme at NRF. Although technology vendors are eager to sell EMV-compliant POS solutions and certain retailers (see WalMart) are moving forward more aggressively with their EMV rollouts, all will be moot until card issuers get serious. A major barrier in the US is that card issuers and their networks are married to signature-based interchange fees for credit and debit card transactions (PIN based transactions generally cost less for merchants in comparison to signature transactions). However, the fact remains that while the US accounts for nearly 30% of all charges/transactions, it also accounted for 47% of losses stemming from fraud.

Nevertheless, even with such a strong headwind, it is expected that EMV compliant investments will increase substantially over the next few years as retailers upgrade their POS infrastructure. The wild card here will be the impact of the continued shift to mobile solutions. Some retailers – such as Abercrombie – have announced plans for an all-mobile POS future. According to VDC’s most recent retail research, almost eight in ten respondents currently or plan to support mobile POS solutions within their retail organizations. While the shift to mobile does not necessarily mean a move away from EMV, it will open the doors for retailers to think of alternative payment options such as NFC and tap to pay solutions. Although card solutions are not going away, it is entirely conceivable that mobile payment will account for an ever-increasingly share of the market.

“Wait and see” was certainly a prevalent mantra among retail executives in regard to next generation POS solutions. The door is open for retailers to address both EMV and mobile payment needs and vendors such as ROAM are complying with the launch of an EMV-compliant mPOS terminal. However, addressing both simultaneously is perhaps too much to expect.

Low Frequency Bluetooth iBeacon technology ushering new customer engagement and in-store location paradigm

According to VDC’s most recent retail research conducted in 2013, 23% of retail organizations currently offer dedicated mobile applications with an additional 42% planning to roll out mobile customer engagement applications. These mobile applications are at the heart of many retailer’s omni-channel strategies and offer critical capabilities like price checking, product availability at other stores, mobile checkout, etc. However, the in-store experience of many of these applications have left customers expecting more.

What could fundamentally change this and boost their value to customers and especially enhance their in-store experience is by providing both time and location context. iBeacon technology delivers just that, but  without the need for a persistent WiFi or cellular connection. The micro-location technology leverages low-energy/low-frequency Bluetooth technology (BLE) that is increasingly integrated within today’s smartphones. These ‘beacons’ ultimately enable mobile app experiences with much higher accuracy than GPS. Transmitters are distributed through the store and shoppers who have downloaded the mobile app are detected when they enter the store. Use cases are solidifying as roll outs among major retailers such as Macy’s and Apple stores expand. This technology is uniquely positioned to address some of the major usage limitations of today’s mobile and potentially drive much higher customer engagement and loyalty.

Keeping technology investments in perspective…or avoid becoming the next JC Penney

The amount of innovative solutions and new partnerships unveiled at NRF is virtually limitless. However, retailers are already clearly challenged by the task of retraining staff and upgrading legacy IT and POS infrastructure. The memory of how JC Penny was crippled by insufficiently tested and implemented change is still fresh in everyone’s minds. The lesson here is: “unless the technology can directly improve retail sales performance, I don’t want it even if it is free.” This was reinforced by VDC’s recent research among retail decision makers who identified “increased revenues” as the number one metric used to measure mobile investments, followed by reduced operational costs and improved customer experience and loyalty.

All too often, retailers fall victim to hype and fail to fully think through the impact of a new solution. Although the role and impact of technology in retail is clear, one need only look at the ‘promise’ of item level RFID tagging to appreciate the challenge represented. However, often it is not an issue of technical limitations (as with RFID) but rather with how the technology is applied. In the case of mobile solutions, mobile payment and mobile POS offer some great examples. Starbucks is often identified as a pioneer in mobile payments. However, their mobile solution is hardly transforming the customer’s retail shopping experience (pulling out smartphone vs. pulling out a credit card). How about mobile POS solutions? Many today are glorified queue-busting solutions that do not fundamentally change customers’ experience, as goods still need to be bagged and security tags deactivated at a traditional check-out counter.

Frequently, it is not the technology that is the limiting factor but the fact that its implementation has not been fully vetted. Mobile investments are expected to continue to rise – 53% of retail respondents indicate an increase of 10% or more in their mobility investment budgets. The challenge will be aligning them with measurable improvements to a customer’s experience, loyalty and ultimately share of wallet.

These are themes that VDC Research will be tracking very closely as we launch our 2014 retail mobility research programs. Stay tuned!

VMware Furthers Its Mobile Ambitions with AirWatch Acquisition

The device proliferation we've seen in business settings has definitely fueled a surge in the adoption of MDM licenses and is driving much of the growth in our mobile software forecast (Particularly since Q4 2012). Our recent EMM Report showed the EMM market growing from $526M (in 2012), to $1.6B by 2017. However, what also stuck out like a sore thumb within our forecast period were the diminishing revenues that will be attributed to MDM (No surprise, MCM, MAM and services will account for the majority of EMM revenues going forward).

There is no question that organizations see the opportunity to benefit from consumer-oriented mobile devices from a business context. However, today’s IT organizations are challenged to provide end-to-end support from software distribution and patching to asset management and incident support for a wide variety of mobile platforms—not to mention for dispersed devices which are both on and off corporate networks. This trend has made the solutions being offered by EMM vendors not only attractive, but also a logical choice for organizations as they invest in mobile enablement for their workforce. It also has led to a more visible focus on enterprise mobility amongst large and established ISVs.

For VMware, the moves being made by competitors such as Citrix and Dell—along with the tepid reception to its Horizon mobile solutions—forced its hand and made making a meaningful investment in mobility essential (Former SAP mobility head Sanjay Poonen certainly played a large role in bringing this deal to fruition). With AirWatch, VMware gets a proven well integrated enterprise-grade mobility platform – while other potential acquisition targets may have offered similar capabilities—we have identified some factors that we believe made acquiring AirWatch too attractive of an opportunity to pass on which will allow them to better compete in the mobile space with key rivals such as Citrix.

Why AirWatch?

AirWatch's solution range has evolved with the market, and the company has demonstrated that it can service large Fortune 100 deployment environments—this bodes well for VMware, whose customers tend to be on the larger side. There certainly remain other viable “tier 1” mobile ISVs that were likely evaluated by VMware; however, an acquisition of this size is always carefully and deliberately evaluated (We’ve heard that this deal had been in the works for ~6 months). For this reason, we believe that there were key and clear reasons VMware identified in its decision to choose to acquire AirWatch, which are:

Solution Range, Adaptability and Ability to Scale — The company has consistently added new enhancements to its EMM solution portfolio (Recent and notable additions include Workspace, a containerization solution, as well as mobile email clients for Android and iOS). AirWatch was also early relative to its peers with its content and application management solutions to complement its core MDM functions. More importantly for enterprise customers, the company has demonstrated that its solution can integrate with existing technology platforms (AirWatch offers a cloud-based version of their software, an on-premise virtual appliance, or an on-premise physical appliance) and it scales well with expanding deployments (Several of the company’s customers’ deployment environments are very large, with 25K+ devices under management).

Brand — This is quite remarkable, given the noise in the mobile ecosystem and the relative parity amongst market-leading EMM vendors.  However, the company has consistently demonstrated that it is willing—and capable—to invest in its sales and marketing organization. AirWatch has not only been able to attract key talent, but it has also aggressively expanded into new geographies. While other tier 1 EMM vendors have followed suit, AirWatch is ahead here in our view, based on the early traction it is seeing abroad. The company’s willingness to invest in its marketing and events functions has also led to positive press and—indirectly—to the expanded roster of channel/reseller arrangements that AirWatch now maintains—like it or not, in a fast-growing and crowded market, visibility is important.

Dynamic Policies, Automated Compliance and Robust Security The company has secured relationships with key partners such as Appthority, Veracode and Cisco and can easily integrate within the reputations and identity management solutions of these companies. AirWatch’s enhanced security features for its MAM and containerization solutions are also robust and support for two-factor authentication, SAML, certificates, and PKI. Data in-transit and at-rest is encrypted with AES 256-bit, FIPS 140-2 compliant encryption. While these capabilities are table stakes and reside with every bona fide EMM vendor, AirWatch has done well at integrating these features and providing an IT friendly console to administer them.

Sales Execution AirWatch is laser focused on sales execution, and executive leadership has been intent on aggressive growth. The company’s success has come as a result of its ability to balance pressure to succeed with customers’ self-paced buying needs (The company’s tiered pricing model also has helped, as it gives AirWatch the ability to reach mid-market and SMBs). AirWatch’s largest customers are typically pleased with the post sales support they receive, with many specifically mentioning to us that their feedback on feature enhancements have been regularly acted on as they've expanded their deployments. AirWatch definitely has attracted the most visible vendors in the mobile ecosystem as partners, and has demonstrated that it knows how to build a successful channel program.

Who’s Left and What’s Next?

With parity increasing in the EMM market, longevity will be predicated on the ability to innovate and maintain visibility in the market, as almost every large deal seems to be winding up as a dog fight—in this vein, we see pricing pressure continuing to force market consolidation. Clearly, large vendors such as Citrix (Zenprise), Dell (Kace), IBM (Fiberlink), Oracle (Bitzer), and SAP (Sybase) will continue to sharpen their focus on enterprise mobility, so VMware’s announcement of its intent to acquire AirWatch was no surprise.

VDC has been tracking the maturation and evolution of the MDM market for some time now and sees the number of relevant pure-play EMM vendors that remain winnowing. More importantly, the window of opportunity to either pivot or be acquired is beginning to close. While there are certainly several enterprise-oriented vendors with a relatively weak mobile solution range—Microsoft {Intune}, BMC Software, and HP come to mind—that will likely expand their mobile solution range, their willingness to step to the plate is unclear. This is largely due to their ability to develop/enhance their mobile solutions in-house (Or, via a series of small acquisitions, such as Dell’s acquisition of Kace, and other complementary security-oriented ISVs). Other examples of these activities include Cognizant’s recently released TruMobi solution, and CA, who white labels SAP’s Afaria MDM solution, and has developed its own MCM solution.

Good Technology and MobileIron are clearly the largest and most prominent pure-play mobile-first ISVs that seem best positioned for acquisition: while both claim to be positioning for their respective IPOs, no S1’s have been filed, and investors may be beginning to grow impatient. The other problem—particularly for MobileIron—is overcapitalization: While MobileIron has continued to grow its customer roster and expand its solution range, the company closed an F round this past October and seems to be burning through cash. The company has also been relatively quiet as of late and has not disclosed any prominent customer wins/deployment expansions. Good, on the other hand, due to its tenure in the market, its patent portfolio and its success/hold in federal markets may be next (They also will likely be available for less than the $1.5B that VMware paid for AirWatch). The company made smart acquisitions in AppCentral and Copiun—both were relatively inexpensive—to round out its solution range.

Other prominent vendors that are potential acquisition targets include: Absolute Software, Boxtone, and SOTI—each must demonstrate they can continue to innovate and expand their solution range, while retaining and growing their customer rosters in 2014—making progress in the new geographies in which they have been actively investing will also be key to remaining viable. In this vein, AirWatch’s trajectory and its path to its acquisition will not easily be replicated and will add to the legend of Messrs.  Dabbiere and Marshall—the company’s growth tract is sure to go down as one of the most successful—and profitable—in our industry.



MDP Space Heating Up - Funding Announced for Xamarin, Appcelerator & Others

The market for enterprise-grade app platforms is continuing to attract substantial investments. Today's funding announcement of $16M Series B funding for mobile first startup Xamarin follows on the coattails of Appcelerator's $12.1M funding announcement just yesterday, bringing the company up to a total of more than $63M in funding.  In the past few months companies such as FeedHenry and Kony have also received notable funding rounds.

This uptick in funding in the MDP market is indicative of a clear market gap.  While the past year has seen substantial interest in the enterprise community in development of sophisticated internal and customer-facing mobile apps, these organizations face a tremendous uphill battle in actually developing these apps.  MDP vendors have emerged to try to rectify this challenge, bringing attractive UIs and simple platforms to maket to facilitate rapid, cost-effective development of cross-platform apps.

More tenured vendors in this space, such as Antenna and Verivo, continue to invest to build out strong functionality (including HTML 5 and enhanced integration capabilities), brands and channel relationships in the market.  As newer entrants (FeedHenry, Sencha, Xamarin and Appcelerator) grow their customer bases, we expect to see significant product announcements and continued funding announcements in the months to come.  Verivo, for example, launched Akula just this month, complementing the company's existing MDP product with an open platform solution. Sencha, an HTML5 oriented MDP, announced Sencha Space just today at its annual SenchaCon event.  Sencha Space is a secure and managed environment for deploying mobile HTML5 business applications. 



Los Angeles School District's iPad Purchase Signals Big Win for Apple in Education Market

The Los Angeles Board of Education announced today its approval of $30 million worth of iPads in the first part of a multi-year commitment.  According to Apple, this initial order for the secodn largest school system in the US will surpass 31,000 iPads.  Apple, Microsoft, and countless vendors across the Android ecosystem have all pivoted in the last few years to develop strong education offerings.  While investment to develop education-specific solutions has been slow, the market is heating up.  This is thus a big win for Apple, signaling to other schools in the US and worldwide the potential for iPads to enter classroom environments.

While clearly a weighty purchase for the LA Board of Ed, the challenge has really just begun as the school must now invest in professional development, device management, applications, digital textbooks and other solutions to more fully recognize the potential impact of thes devices to transform education.  In the world of educational apps, the landscape of apps for 3rd graders is much different than that for 5th, 7th or 9th graders - we will have to see how the Board of Ed goes about equipping each student with applications.

Questions around spares pool management, device repair, lost devices, device provisioning and data security must also be answered by the school department.  Apple's VPP program for educational institutions and business organizations has yet to satisfactorily meet education organization requirements. The program is described as "cumersome" and "challenging" by end users, requiring designation of separate Program Managers and Program Facilitators, unique volume vouchers for each, and management of app redemtion codes through large CSV files.  

This is clearly an exciting announcement, hinting at the future of mobile technology to transform education. School districts such as the one in Los Angeles will be instrumental in driving this shift.


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.


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:

  • 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.


Can Apple Devices Rough the Rugged DSD Market?

According to a recent article from Mobile Enterprise Magazine, PepsiCo’s North American Beverages division has adopted Apple products into its Direct Store Delivery system. Not only are roughly 4,000 field merchandisers equipped with iPhones and 2,000 field managers with iPads, but PepsiCo has gone a step further and developed two iOS apps entirely in-house through its technology group:


  • Enables merchandisers to view schedules, store and display details
  • Notifies merchandisers of driver arrival
  • Displays store details and account information

Manager’s Briefcase

  • Enables managers to coordinate and monitor deliveries, schedules and contracts
  • Displays pricing and planograms
  • Provides electronic versions of paperwork and automated notifications to merchandisers
Picture2This unprecedented move is sure to shake the DSD market, which is characterized by mature processes, long upgrade cycles and heavy reliance on legacy rugged devices. While consumer grade technologies have slowly but surely trickled into markets ranging from retail and healthcare to education and insurance, DSD organizations’ risk aversion and reliance on mature processes has thus far stunted adoption of smartphones and tablets in the DSD space.  PepsiCo’s move to implement iOS devices is even more risky given the considerable capital investment required to purchase solutions, integrate with existing (Windows-based) systems and train mobile workers. However, according to Brian Spearman (SVP of Go-To-Market and Service, PepsiCo North America Beverages), PepsiCo is seeing early success with this program, estimating that the new iOS apps save each employee an impressive 6 hours a week.

Use of Power4Merch and Manager’s Briefcase has actually increased the operational efficiency of the DSD system by facilitating real time communication, leveraging data, and eliminating the need for printed information such as schedules and order quantities.

Beyond facilitating advances in operational efficiency, DSD organizations are increasingly looking at consumer grade technologies as a means to enhance their brand and image in customer-facing merchandising activities. Devices such as the iPad are generally more visually appealing as well as easier to operate than traditional rugged devices. They boast high resolution and larger screens, making sales presentations and customer/end-user surveying activities more intuitive and effective. Further, many DSD drivers are already familiar with operating consumer grade technology, and companies may find it more cost-effective to leverage personal devices instead of those purchased by the company. These are clear advantages that could drive a shift towards consumer grade devices in the DSD market.


A recent VDC survey of DSD IT decision-makers revealed that those in this price sensitive market feel that ruggedized devices may be overpriced relative to the value they provide. And yet, rugged vendors emphasize the total cost of device ownership, citing additional costs to manage and support consumer grade devices throughout their lifecycle (e.g. repairs, OS updates, and replacement cycle).  To address growing interest in the tablet form factor in the DSD market, vendors such as Panasonic and Motorola have been working to develop rugged tablets capable of utilizing apps and increasing operational efficiency as well. In the end, consumer grade devices are sure to make an entrance into the DSD market, albeit slow and cautious. Whether they will prosper will be determined when the first iPhone falls two inches to the ground and shatters. 

Stay tuned for more insights into the DSD Market.  VDC's Enterprise Mobility & Connected Devices Practice will be publishing its annual Direct Store Delivery Report by end of Q2.


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 …