96 posts categorized "Market Leaders"

04/11/2014

IBM Steps up Competition with MobileFirst Initiative

This week, IBM announced the expansion of its MobileFirst Consulting Services, its mobile solution portfolio launched in 2013 to streamline and accelerate enterprise mobile adoption. The announcement highlighted eight services designed to solidify mobile infrastructure consulting, mobile application management, and mobile device procurement and management services.  With this, IBM is further expanding its reach within a market that has matured and consolidated considerably within the past year.

IBM paves the way to go big with mobile solutions

IBM has made significant strides to increase the scope of its services, increasingly eschewing hardware in favor of applications and services and bolstering its already strong presence in the cloud. The firm’s acquisition of Fiberlink in November of last year came as no surprise and will provide the opportunity for IBM to be a significant player in their mobile infrastructure consulting services space. As early as 2012, VDC blogged that the roster of vendors offering EMM solutions would likely broaden to include a spectrum of technology-oriented vendors including hardware OEMs. Fiberlink, a mobile-first MDM vendor, was a smart and necessary acquisition if IBM wants to become a leader of MDM consulting services. In light of the tech giant’s recent activity, we believe that IBM is in a position to put programs in place to enable partners to sell its MobileFirst platform both as a managed service and on an a la carte basis. Given IBM’s resources and brand recognition, VDC feels it’s only a matter of time before IBM launches a large-scale marketing campaign to fully leverage its position and kick the competition into high gear.

Let the mobile hunger games begin

Recent activity in the mobile solutions market underscores how the sector is more competitive than ever. Wave after wave of acquisition have mostly cleared the way for larger companies, who are increasingly feeling the pressure to perform either on price or innovation. Following IBM’s acquisition of Fiberlink, VMware’s January acquisition of AirWatch and the much-anticipated entrance of Microsoft with its EMM solution offering announced at its Build event last week shows that the stakes are higher than ever. While these acquisitions provide the means to offer a broad portfolio of solutions, integrating these vendors quickly and efficiently is still critical.  

Those who have survived the acquisitions are digging in their heels for the long run: just last week, MobileIron filed its S1 in anticipation of going public and Good Technology isn’t far behind as it moves towards its own S1. The filings show a proven business model and investor confidence, but competition will still be high as IBM expands its reach and other large firms like Oracle and Dell enter the space. The market has matured at a lightning pace, with smaller and larger firms alike experiencing compressed timeframes as ever-larger companies enter the ring. 

(Reserach and contributions by Eric Klein and Katelyn Moroney)

04/02/2014

VDC Research Releases Results of its Quarterly Rugged Device Tracker

This week, VDC published the results of its quarterly device tracker, which follows both quarter-on-quarter and year-on-year numbers for major OEMs both globally and by region. 

Notebooks lag behind other form factors

The rugged market – including notebooks, tablets, handheld computers and forklift terminals – reached $4.1bn in 2013, a 6.1% year-on-year decline from a total of $4.3bn in revenues from 2012. Excluding notebooks the market increased by 1% over 2012. The strongest performing category was rugged tablets which grew by 22% year over year. The impact of consumer-grade smartphones and tablets being used in an enterprise setting continues to make itself felt on a global level, particularly among field mobile workers and for customer-facing applications.

Q4 continues the upward trend

Performance in Q4 2013 built on the improvements in market conditions we began to witness during the second half of 2013. During Q4 2014, year over year rugged mobile vendor revenues declined by 1%. Excluding rugged notebooks, the market grew by 4.2%. Performance during Q4 2013 was lead by the rugged tablet and forklift segments which grew by 31.6% and 13.1% respectively.

Quarterly tracker chart 2Android and Windows Embedded Handheld 8.1 present 2014 growth opportunities 

“The rugged mobile market is expected to continue to stabilize in 2014 and provide moderate to strong growth opportunities. We expect a stronger retail segment and improvements to investments in North America, which has recently lagged EMEA in performance,” states Kathryn Nassberg, an analyst for VDC. Continued strength in the rugged tablet segment, improved support and availability of rugged Android handheld and tablet offerings along with first generation rugged handheld Windows Embedded Handheld 8.1 will fuel much of the 2014 opportunities However, headwinds and downside risk clearly still exist, especially in the form of adoption of lower cost consumer mobile devices and overall access to capital. 

For more information, click here

For a copy of the report, please email info@vdcresearch.com

 

 

03/17/2014

BlackBerry’s Uphill Battle to Regain Enterprise Confidence

It’s no secret that BlackBerry is working to maintain its relevance in enterprise mobility. CEO John Chen emphasized just last month at Mobile World Congress that the firm had engineered a new strategy to restore customer’s confidence in BlackBerry. Both in Barcelona and at a meeting with analysts in January, Chen has stressed the relationship with enterprise as central to the company’s strategy and success. Potential revenue enhancing opportunities have emerged, such as the news that the company intends to support the Windows Phone platform with its upcoming BES 12 release (BBM support for the Windows Phone platform was also disclosed), and the announcement that Ford will be using the company’s QNX platform for its next-generation Sync system—however, while these initiatives have potential, we see the company’s reluctance to abandon its hardware orientation as hurting its long term prospects. While there remains a window of opportunity to maintain relevance with a device centric strategy (The firm made a wise choice by partnering with Foxconn to defray the downside of its unsustainable (and unprofitable) manufacturing operations), we believe the upcoming Z3 (low end consumer device) and Q20 (a QWERTY keyboard sporting enterprise-grade smartphone) are the company’s last chance. This is primarily due to the fact that there is a marked loss in mindshare with enterprise customers—according a recent VDC survey, the lack of confidence is quite stark.

Forecast is Gloomy

Our survey showed that BlackBerry’s support among larger enterprises (organizations with greater than $500M in annual revenues) has continued to has lose ground to both the Apple and Android platforms. BlackBerry also lagged significantly and was the least-supported OS, both among BYOD and enterprise-issued devices according to our study. When asked point-blank about their likelihood in investing in BlackBerry, the same companies showed a marked level of ambivalence:

Blog_graphic_31714

While Apple and Android are the dominant mobile platforms in the enterprise, we believe that there is room for a third ecosystem—particularly one with enterprise-grade capabilities.

Need for Speed

While the new Z3 and Q20 devices are slated for later this year, BlackBerry needs to move quickly as new devices such as Samsung’s S5 (April) and Apple’s iPhone 6 (September?) are fast approaching. Both are high-end devices and feature notable enterprise-grade enhancements that will be difficult to match.  In the meantime, the company should continue to enhance its focus on its BYOD management solutions—else, the road ahead will continue to be long and increasingy uphill.

(Research and written contribution by Kathryn Nassberg)

03/07/2014

Apple moves to open up enterprise IT channels

Taking a more enterprise-friendly approach

Apple may have reinforced its lead ahead of Android in the enterprise market with the announcement this week of its new program to facilitate enterprise usage of iOS on a larger scale. Among the biggest changes is the Device Enrollment Program, which frees IT from the previous constraints of Apple Configurator of having to physically interact with the devices individually via USB to configure them for MDM in what the firm is calling a “zero-touch effort for IT.” The enrollment program also solves a critical requirement for corporate-owned, personally enabled (COPE) devices, as IT can now install non-removable MDM profiles. This had previously been a source of concern for IT, as users could remove MDM elements from their iOS devices. In addition to an over-the-air approach that lends itself better to a COPE-style of mobile deployment, Apple has also gained a significant enterprise edge by changing its volume purchase and licensing programs to enable businesses to purchase apps in bulk without the need of a credit card. 

Other changes with the rollout of the Device Enrollment Program lend themselves particularly well for scalable deployment. Among these is the elimination of staging and provisioning processes, which in turn streamlines the process of deployment, as devices can be directly sent to end-users. Additionally, the program moves device enrollment into MDM as part of the setup process, simplifying the enrollment process for employees. All these create a powerful enterprise advantage, especially when paired with the recent changes to its volume purchase program.

The changes are well in line with Tim Cook’s focus on keeping Apple front and center in the enterprise arena. In last month’s quarterly phone call with analysts, the CEO noted that “the enterprise area has huge potential,” citing high percentages of global Fortune 500 companies that use their devices. With the recent FIPS 140-2 certification from the federal government, it stands to reason that the company will continue to integrate enterprise and security as core elements of its product strategy.

Apple’s priorities are still with the consumer

While it’s true that Apple is making considerable progress in taking enterprise concerns into consideration as a more central element in its product development, the fact of the matter is that, at the end of the day, its devices are first and foremost a consumer good. We see these limitations in areas such as OS upgrades and Apple ID. Currently, Apple ID is linked very closely with individual accounts, and while it is possible to create more than one ID per person, this can often become cumbersome given the nature of the ID. As a result, this limits businesses’ ability to share devices and can make COPE somewhat more problematic.

Other issues remain surrounding lifecycle support and control of upgrades. This was certainly the case for iOS7, in that many apps and services became non-compliant with the upgrade. Many firms found that their applications were not ready and had to rely on requesting that employees not upgrade their OS. The lack of control over the timing of upgrades, as well as lifecycle support will remain stumbling blocks for enterprises that are looking to deploy Apple devices as part of their line-of-business mobility strategy.

No longer afraid to use the “e” word

Even though Apple’s priorities remain with consumers, the company is definitely maneuvering into a more explicit relationship with enterprise. By timing its announcements to align with last week’s Mobile World Congress, Apple is definitely presenting a considerable challenge to the competition on the enterprise front. So far, Apple has been able to maintain a considerable market share in this arena primarily through its consumer appeal alone; now that the firm is actively taking enterprise into consideration in product development strategy, Android competitors like Samsung are going to have their work cut out for them to increase their foothold. Meanwhile, Microsoft and BlackBerry are going to have to work all the harder to maintain market share. 

02/28/2014

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.

02/14/2014

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.

01/31/2014

Large-scale Deployments Increase Growth Potential for BLE, iBeacon

Bluetooth Low Energy (BLE) technology is poised to revolutionize consumer in-store experience in 2014, further augmenting already existing mobile retail applications. VDC research from last year revealed that 23% of retail organizations had rolled out mobile applications to supplement their current in-store services, and that an additional 42% planned to deploy mobile applications in 2014. BLE technology, like that of Apple’s iBeacon, strives to address this gap with increased location and engagement services by allowing devices to communicate directly with one another.

A cheaper, more precise way to engage consumers

BLE represents a drastic improvement from existing solutions like Near Field Communication (NFC) and GPS-based geo-location. Bluetooth beacons eliminate the need for close proximity for interaction between devices by vastly increasing the data transfer range from the current distance of 8 inches to 150 feet, and at a much reduced cost. Additionally, BLE has a greater potential consumer reach, as all mobile devices come equipped with Bluetooth capabilities, instead of requiring a specific installation, as is the case for NFC. The greater range and improved precision also allows for retail stores to use micro-triangulation services in-store to improve both analytical capabilities and in-store promotions, creating endless opportunities for personalized marketing strategies on an individual level. Consumers who opt in will be able to view information such as reward points, daily deals, and history of purchases upon entering a given store. Such interactions have the potential to increase both consumer spend per visit and overall brand loyalty.  As of January 2014, a handful of companies have begun trial runs for BLE technology, with Macy’s, American Eagle Outfitters, and Safeway Supermarkets all running iBeacon in select stores across the US.

iBeacon goes mobile

Other companies are looking to take the new technology out of the store and onto the road. This week, smart driving assistant maker Automatic announced its device, which plugs directly into a car’s data port will now support iBeacon, representing one of the largest BLE beacon deployments to date. Automatic speculates the roll out will transform the traditional iBeacon retail framework to provide their users with similar automotive services such as pay for parking, gas, or automatic alerts as they drive. If successful, this could help pave the way for greater integration of BLE as a payment solution, boosting acceptance for other POS solutions, like that of PayPal, which was announced in September of last year, but has yet to gain widespread adoption.   

BLE is lucrative, but barriers remain

While many of the advantages that BLE offers revolve around its energy efficiency and potential reach, these strengths are tempered by existing barriers to adoption. Although the energy requirements for businesses deploying BLE are low thanks to its design (the technology can run on coin-cell batteries for months or even years), this is not the case for mobile device users, who frequently keep their Bluetooth capabilities switched off to conserve battery life. VDC estimates that only small fraction of device users keep theirs switched on. Another barrier is the limited access for Android devices and even Apple devices to a certain extent. BLE’s current reach within the Android ecosystem is severely limited (the technology requires Android 4+) and Apple’s reach is not as pervasive as believed: only iOS devices from the 4S generation have the same capabilities. However, with the imminent launch of Android-based Datzing as an Apple competitor that can function on older phones, Android’s present gap in this market could narrow significantly in the year to come. Barriers also remain on the enterprise side, as BLE in its current incarnation requires individual apps. Currently, there is no central iPhone app to interact with retail beacons using iBeacon. For businesses that already have mobile apps, this presents less of a limitation, as the functionality can be added, but for firms, a dedicated app will need to be designed to capture the benefits of the new technology.

Privacy remains a primary conern

One of the remaining hurdles that BLE technology will need to overcome is the most pressing of them all: that of privacy. Right now, beacon technology is based on company-specific applications that require opting in. However, the question remains whether, despite the current opt-in setup,  users will want businesses to know their every step and whether payment software can be trusted to charge the correct amount to a customer’s  credit card. More importantly, the issue remains as to whether BLE can succeed given the current environment in which revelations of security breaches like that of Target are becoming increasingly prevalent. Additionally, there are growing concerns surrounding data collection and overall privacy that many companies will need to address in order to allay consumer fears. VDC believes that the inherent effectiveness of the technology has tremendous capacity for consumer buy-in and will likely overcome most concerns surrounding privacy and security, but firms will nevertheless have to work to earn and keep consumer trust as BLE continues to gain traction. 

 

(By Kathryn Nassberg.Research and written contribution by Katelyn Moroney, Research Intern for Mobile and Wireless)

01/24/2014

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.

 

09/30/2013

Can Microsoft Take Off With First Notable Surface Deployment?

Following its Surface 2 and Surface Pro 2 that took place last week, Microsoft officially announced its first large enterprise deployments through Delta Air Lines today. As Delta comes aboard the Windows RT bandwagon through the purchase of 11,000 Surface 2 tablets, the company not only aims to lower its fuel and associated costs, but is also looking to enhance efficiency among its workforce. As per the announcement, Microsoft Surface 2 tablets, will initially be used as electronic flight bags (by leveraging Jeppesen’s FliteDeck Pro app that is targeted for the Windows platform) and will enable the airline to eliminate paper-based flight kits that happen to be heavy in nature. The rollout will start with pilots that are flying Boeing 757 and 767 fleets and will make its way into all Delta cockpits by the end of 2014.

This deployment is also significant since it is a natural follow-up to Delta’s commitment to the Windows platform. Back in August 2013, the company announced a 19,000 Nokia Lumia 820 Windows Phone deployment for its flight attendants. These devices are primarily utilized for Dynamics for Retail technology on onboard customer purchases. In-flight purchases that are enabled by these devices not only include food and beverages but also include paying for seat upgrades and receiving   e-mailed receipts as a result of these transactions. The company also announced that a near-term update would include processing digital coupons on customers’ mobile devices. This deployment (including the custom mobile POS solution) was developed by Avanade, Microsoft and AT&T and will operate over both Wi-Fi as well as AT&T’s 4G LTE Network. Delta’s and other airlines’ efforts for enterprise mobility solution deployments also comes in timely since FAA is looking to expedite the approval of electronic devices during takeoffs and landings soon.

While we have all heard of pretty large deployments with iOS and Android-based solutions, (or about smaller deployments based on Windows Phone 8 or Microsoft Surface), this is the first sizeable deployment for Microsoft’s mobile business. Given the fact that the second generation Surface devices were just introduced last week, such large commitments from a large corporation like Delta could get the company start things off on the right foot. Despite the confusion that Surface RT created with its inability to run Windows 7 software last year when it first came out, Surface 2 which is also running on ARM processor can be Microsoft’s special-purpose device targeted for the enterprises that are looking for lower-priced solutions and could use the long battery life. This second-generation Surface RT solution that has a lower price tag could also be a somewhat more expensive alternative to lower-end Android-based solutions for organizations that do not want to let go of the Windows platform.