VDC Research: Enterprise & Government Mobility Market Blog

Solving the BYOD Challenge Without Managing Devices

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

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

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

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

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

 

Exploiting Enterprise Mobility to Address Pain Points in Manufacturing Industry

Manufacturing organizations are using mobile solutions to give their increasingly mobile workforce access to real-time data on the go. Demand for increased visibility of assets, execution of business remotely, and goals to improve sales and customer service are some of the factors behind increasing adoption of enterprise mobility solutions among manufacturers.

Whether they are involved in process or discrete manufacturing, majority of the manufacturing organizations are highly receptive towards mobilizing traditional manufacturing applications such as asset management, shop floor management, field service and field sales management.

Here are some enterprise mobility investment drivers in manufacturing industry:

Give anytime anywhere access to employees. Besides gains in productivity and efficiency, the employees are looking to better communicate and collaborate, as well as making decisions on the go based on the real-time information available to them.

Enterprise applications remain to be the heart and soul of manufacturing. While manufacturing industry has been slow in making the transition to mobility (in comparison to the other vertical market segments), the process is expected to be much more smooth from now on since the traditional enterprise application vendors (e.g. SAP, Oracle, Infor, Epicor, etc) are on board. VDC anticipates more modules/ suites from these applications (e.g. ERP, CRM, MES, WMS, etc) to be mobilized in addition to the modules like Expense Management that lead the way in making the shift to mobile.

Jump on the mobility bandwagon now, if you haven’t already done so. Organizations have started to view mobility as an extension of their core processes and functions within the manufacturing environment. Inventory management, for example has been an application that many manufacturing organizations are using in their warehouses and DCs.

The “Rule of Three” Stipulates There's Room for a Third Mobile Ecosystem

“The Rule of Three” postulates that all major markets evolve and shift, and that markets tend to behave in a highly predictable fashion. This seems to be playing out in the mobile platform battle that we are in the midst of. Interestingly, whether by intention or not, vendors such as Apple and Google find themselves achieving vendor lock in. While this is largely due to end-user comfort level and familiarity with these respective platforms, many users have also have invested in apps and music for these respective platforms. However, moving forward, we believe that regardless of monetary investments, familiarity and comfort with a platform that churn is inevitable and even likely — this will give new, emerging and potentially resurgent vendors such as Microsoft and RIM an opening. 2013 will also bring new market entrants such as the Tizen OS (an initiative backed by the Linux Foundation, Samsung and Intel), Mozilla’s Firefox Mobile OS (developer friendly and based on Web technologies [HTML, CSS, and JavaScript]), and the Sailfish OS (a successor to MeeGo). Clearly these vendors face an uphill battle – however, if they are able to establish a developer ecosystem around their platforms, the market opportunity will present itself.  At a minimum, these vendors will force incumbent vendors such as Apple and Google to continue to innovate.

Smartphone OS providers are very aware that generating consumer interest in their respective platforms is critical moving forward, and rightly recognize that the predominant app classes that are succeeding are consumer oriented (e.g., social networking, entertainment, messaging, and games). While the mobile ecosystem remains fragmented, Apple’s iOS and Google’s Android OS continue to attract the most attention from developers — based on churn (largely in the form of contract renewals), breakage, and lost devices, we see an opportunity for both Microsoft and RIM (and potentially others) to remain commercially viable and even gain traction and loyalty from the marketplace. While both RIM and Microsoft have struggled, and stumbled, and continue to play catch-up in what has become a two horse race OS battle, we see ample evidence that both company’s can remain very relevant moving forward, and see room for a third mobile ecosystem. While Windows Phone 8 is off to a good start ... it's clear that RIM has a lot riding on BB10. Stay tuned.

Integrated or À La Carte Enterprise Mobility Solutions



Established mobile software categories such as mobile device management (MDM) and telecom expense management (TEM) have not only matured, but are being blended with “new” mobile categories such as mobile application, security and content management. These formerly adjacent enterprise mobility solution areas are being integrated by an increasingly broad range of vendors, and are marketed as enterprise mobility management or EMM.

While point solutions for mobile management have proven to be adequate for many deployment environments, they are beginning to give way to more sophisticated solutions that have emerged in the market as integrated end-to-end enterprise-grade mobility management.  However, the diversity and variability of mobile requirements in enterprise environments make an a la carte “enterprise mobility bundle” approach viable and often desirable. We identifed and wrote about this trend earlier this year, as carriers and systems integrators continued to demostrate their channel strength in reselling mobility solutions. Both integrated EMM solutions and point solutions will see success in the market as vendors continue to architect solutions that can integrate well with existing technology infrastructures as well as with complimentary (and often competing) mobile solutions – additionally, larger organizations with more sophisticated/mature mobile strategies will demand an integrated mobility approach due to these solutions ability to reduce support and maintenance costs.

The roster of vendors offering EMM solutions has expanded well beyond the mobile-first MDM vendors like AirWatch, Boxtone, MobileIron and Zenprise, who began expanding their solution range in 2010. Prominent participants cross the entire spectrum of technology-oriented vendors, including: mobile OS vendors, hardware OEMs, large ISVs, carriers, systems integrators, and mobile first ISVs. The solution range being offered is wide, with competing paths to secure mobile applications and platforms – indeed; EMM is shaping up to be one of the most competitively fought software markets in enterprise mobility.

Honeywell's Intermec Acquisition Reshaping the Competitive Landscape of the Rugged Mobile Market

After monitoring the rugged mobile market and witnessing the consolidation trend that has been taking the market by storm for the past few years (e.g. Honeywell's acquisition of EMS Technologies, Inc and Motorola Solutions' acquisition of PSION), here at VDC Research, we were expecting 2012 to bring us more in terms of acquisitions - and the month of December did not disappoint us. On Monday, Honeywell International Inc. (NYSE: HON) announced that it would acquire Intermec Inc. (NYSE: IN) for about $600 million in cash ($10 per share).

Despite maintaining its competitive position, Intermec, the workflow performance company that develops, manufactures and integrates technologies that identify, track and manage supply chain assets has been going through restructuring and was in search of a new CEO in addition to evaluating its alternatives. In addition to being a key manufacturer of rugged mobile computers, RFID, barcode scanners and barcode printers, the company is a turnkey solution provider with offerings in hardware, software, services and integrated solutions.

In this blog post, we are going to be looking at Honeywell's acquisition of Intermec and its impact on the enterprise mobility market.

Sign of the Times*:The rugged mobile market - and more specifically the rugged handheld market - is at crossroads. In fact we appear to be entering a phase of lower growth. Some of this can be attributed to consumerization and increased market erosion by smartphones. In addition, macro factors such as the weak economic climate in Europe and the soft recovery in North America do not bode well for higher growth dynamics. What is increasingly clear for participants in this already wildly fragmented market is that without scale - or an extremely focused niche position - one's ability to compete is compromised. Although Motorola - fresh off its recent acquisition of PSION - remains the clear leader in the rugged handheld market with over 40% share, combining Honeywell (LXE) and Intermec creates a more viable "number two" with a market share reaching 20%. This substantially broadens the gap with the rest of the market as the next closest competitor's share hovers around 5%.

Portfolio Fit and Mix:Honeywell's enterprise mobility and AIDC products are part of its Scanning Mobility unit within its ACS division. From a hardware perspective, Intermec expands Honeywell's rugged handheld and forklift mounted portfolio, especially around devices for field mobile and logistics solutions. In addition, through Intermec's printer and media division Honeywell has effectively expanded its TAM by several billion. Moreover, with Intermec's Vocollect division (Vocollect is the leader in voice solutions for mobile workers) Honeywell is further enhancing its warehouse capabilities, a critical market for rugged mobile and data collection technologies. What is likely especially appealing to Honeywell, is access to Intermec's installed base - particularly in markets like DSD, industrial warehousing, logistics and field service. Beyond core hardware, Intermec also has some interesting capabilities around professional services - through its Enterprise Mobile business unit - and software. These could be critical as Honeywell explores possibilities to enhance its service footprint and scale its service offerings.

Consolidation Trend and Honeywell as a Serial Acquirer:Consolidation trend has been a common theme in theme in the enterprise mobility market over the past couple of years and VDC expects this trend to continue in areas where the market has reached a certain level of maturity. Honeywell has excelled as an acquirer of companies as the company acquired Hand Held Products, Metrologic, EMS Technologies and Intermec since 2007. PSION's acquisition by Motorola Solutions earlier in the year shook up the competitive landscape as the consolidated company is better positioned in the market with its expanded product portfolio and market share gains. While the overall tendency in the market might suggest being more cautious giving the economic uncertainties and volatility, Honeywell once again focused on the potential opportunities associated with it and decided to move forward with the acquisition. The company continues to focus on mid-market deals (under $1 billion) and use consolidation as a way to support its organic growth. Honeywell's expertise in consolidation perhaps gives the company a significant leverage over its peers as the company perceives these acquisitions as a safer way to grow its business.

Despite its large installed base of customers and devices and its strong position with its partner ecosystem, Intermec has been having some challenges over the past couple of quarters. It would be interesting to see how Honeywell successfully integrates the company and turns its business around. The impact of this acquisition on Intermec's employees and product lines is also yet to be seen.

*The figures reported in this section are from VDC Research's Strategic Insights 2012 Enterprise & Government Mobility Hardware Mobile Devices Report and references to consolidated companies when mentioning Motorola Solutions (includes PSION) and Honeywell (includes Intermec).

P.S. Since the announcement of the acquisition, multiple law firms announced that they will be investigating the acquisition as a result of the potential claims against the Board of Directors of Intermec, Inc. We will update this blog post as more information becomes available.

Requirements are Changing in Field Mobility

VDC Research recently published Strategic Insights 2012: Field Mobility Solutions Report as part of its Enterprise Mobility Vertical & Applications Markets Research Service. Some key findings from this research include:

Hardware requirements are changing in field mobility organizations - Both field service and field sales organizations are looking to deploy tablets as a result of the real estate that they can get from the large display size. While the notebooks used to dominate these markets (in terms of rugged large from factor devices), the portability element is making tablets a much viable choice. The trend with equipping mobile workers with multiple devices continue to receive traction. The demand for having a mobile device at the point of interaction with the customer in addition to an in-vehicle solution is on the rise.

Rugged value proposition is being re-evaluated - With the increaseing availability of user friendly devices that have touchscreen and broad app ecosystems, the value proposition of ruggedized solutions need to be redefined. While rugged form factor will continue to be used for some mission-critical workflows, BYOD trend has made its way into this market. End user requirements are changing the applications and mobile platforms are becoming more important than ever. Many rugged mobile device vendors as well as field mobility organizations are adopting multiple OS strategies where they are introducing or deploying Android-based devices.

Customer engagement is becoming a key differentiator - As they evaluate/ deploy enterprise mobility solutions, field mobility organizations are looking to gain improvements in customer service in addition to improvements in workforce productivity. Cross and up selling capabilities and improvements in first-time fix rates are critical for field sales and field service organizations respectively. Thus, client facing applications are receiving traction as these organizations are looking to gain higher customer retention rates.

Growth in Rugged Tablet Market Trying to Make Up for the Loss in Others

VDC Research recently published its Q2 2012 Rugged Mobile Quarterly Shipments Report, supplementing its Enterprise & Government Mobility Hardware Research Service. Some key findings from this report include:

• The market for rugged large form factors had double-digit growth in Q2 2012 (over Q2 2011). The growth in the rugged tablet market was the primary contributor as the market for rugged notebooks and forklift mounted computers both contracted.
• Rugged notebook market experienced the greatest drop among large form factors. Vendors are positioning themselves to better serve the commercial segments as a result of the cuts in government spending. Shifting focus to commercial markets is not as easy as it may seem, given the historic ties the majority of the rugged notebook vendors have with the public sector.
• Rugged tablet market is taking a boost from the overall demand for the media tablets. The market grew by 30.1% over the year-ago-quarter, experiencing double-digit growth across all regions. Rugged forklift mounted computer market contracted by 9.1% (over Q2 2011) as the only growth came from the Asia-Pacific region while the Americas region shrank by 14.1%.
• Rugged handheld market was flat in Q2 2012, achieving a YoY growth of 1.8%. The economic uncertainty in the EMEA region was a key contributor to this outcome, as well as the fierce competition that this market is facing from lower cost solutions such as the smartphones.

Consolidating in Transportation Market - Trimble Acquires TMW Systems for $335M

 

On Monday, Trimble announced its agreement to acquire TMW Systems, a vendor offering transportation and logistics software, for $335 million in cash.  The two companies have worked closely in the past, integrating their solutions for many customers – this acquisition will see Trimble expand the overall reach of TMW’s transportation management software to its global customer base. 

 Over the past few years, transportation and logistics firms worldwide have struggled with decreased demand, challenges reaching full capacity, and increasing volatility in fuel prices.  These variables have weakened profitability for many vendors, driving substantial industry consolidation.  This has been especially notable in the trucking space (largely dominated by owner-operator firms), where we are seeing smaller companies struggle to remain profitable, with many exiting the market or facing acquisition. 

 In July of last year, Trimble announced a similar acquisition, purchasing fleet management vendor PeopleNet, a provider of onboard computing and mobile communications technologies for transportation and logistics firms in North America. Trimble’s acquisition history suggests the company is intent upon developing a strong portfolio of transportation solutions to serve a global audience.  The company’s purchases of companies including Punch Telematix in Europe and Tata AutoComp Mobility Telematics in 2010 provide strong support for this argument.  Given the evolving landscape of governmental and regulatory hurdles facing transportation organizations across the world, having a clear understanding of customers’ regional-specific requirements is critical. 

 While transportation companies are looking hard for opportunities to cut costs, mobile technology investment will not be a primary target for most organizations.  The potential cost benefits in productivity and time-savings far outweigh the investment required for transportation vendors looking to mobilize their workforce.  With software vendors increasingly employing a subscription-based pricing model, the transportation market is due to see continued strong investment in mobile technologies.

 These issues will be explored further in VDC Research’s Transportation, Logistics, & Warehousing report – due to publish in August 2012. 

The Attack Surface Problem on Mobile Platforms

In comparison to desktop PCs, the number of threats on mobile platforms is actually low (today), but the pace of device proliferation has changed the traditional definition of a network endpoint, and has made smartphones and tablets an attractive target for those seeking to do harm. While device manufacturers continue to enhance the embedded security that resides on their hardware with each successive release, cyber criminals are altering their tactics and are keen on taking advantage of flaws in mobile platforms and applications. Another complication for corporate IT is the fragmented state of today’s mobile OS landscape. While RIM continues to struggle, our data indicates that on average, organizations support more than 2 OSes (we anticipate this to be the case for the foreseeable future as well). This is problematic from a security and device management perspective, and increases the complexity associated with effectively administering a multi-platform mobile environment.

For the criminally minded, information such as personal email, contacts, passwords and other stored personal and/or corporate data, all present a potential treasure trove of high-value information that can be exploited. Scams such as phishing (where passwords and other personal information can be stolen), location (GPS) tracking, and financial malware, are all opening the door to illicit and potentially criminal activity. Invariably, new technology platforms introduce new vulnerabilities, which often enable new attacks by increasingly potent adversaries. The challenge organizations that recognize the strategic advantage available to them from investing in mobility solutions will be to prioritize investments in technologies and practices which can best protect assets and maintain operational efficiencies without disrupting business innovation. This will be an essential top management issue as mobile workforces continue to expand.

A common characteristic of mobile devices is their multiple connectivity options (depicted below), this is distinctly different from traditional PCs which appear as a single end-point on a corporate network. The robust connectivity options make mobile devices extremely powerful, and data retrieval and information sharing painless; however, they expose mobile devices to a variety of security threats, particularly when deployed in corporate settings.

Bottom line – understanding the attack surface on mobile platforms is critically important for companies as they expand thier mobile workforce. Moving forward, developing a threat vector based defense-in-depth architecture will be required – the battle for who provides these security solutions has, and is sure to intensify. The best protection to “future proof” mobile technology platforms will be to not only appropriately invest in the staffing and training of IT personnel, but to arm them with the powerful software solutions that continue to mature and provide the level or protection that is necessary in today’s mobile ecosystem.

A growing number of vendors are acutely aware of the attack surface problem, and are emphasizing their security-orientation as they compete in the enterprise mobility market – if you represent an organization with a mobile-oriented enterprise-grade security solution, I'd welcome the opportunity to speak with you about your solution(s).

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Multiple Paths Have Emerged to Secure Mobile Apps

We all love our mobile devices. They (many of us now have two — usually a smartphone and tablet — some of us [like my wife] have a COPE [corporate owned personally enabled] smartphone, and a personal smartphone and tablet) are inevitably never more than a few inches aways from us — this of course means that they are with us both at home and at work.

The Way in Which we Work is Changing

While today's workforce is changing, and our employers are increasingly providing us with powerful tools that bring reliable access to corporate data and the ability to collaborate with co-workers remotely — a large portion of our workforce (the clear majority) still commutes on trains and drives to their offices. For many of us (I know that many of my firends who work in large corporations don't see this changing any time soon), this may be the case for the foreseeable future.

Sure there are forward-thinking companies like IBM, SAP, and Cisco that "eat their own dogfood", and have embraced technology, offering their employees tools to enable them to work remotely. However, it is important to point out that the aforementioned tools are largely aimed at remote application access via laptops. What has and will continue to change is the way in which we work ...

Yes, I'm Going to Talk About BYOD ...

Modern mobile platforms are the change agent — our personal devices that we bring into the workplace and carry with us everywhere we go have opened the door to productivity-enhancing scenarios that are often "customer-facing". Forward-looking companies recognize this opportunity, and will continue to increase their investments in enterprise-grade mobile applications (VDC estimates this to be a $6B market in 2012). While many businesses have started to offer COPE options and are likely to continue down the COPE path (i.e., offering employees a choice of mobile platforms)— others will put mobile policies in place that accomodate BYOD. These trends, along with a burgeoning apps ecosytem are driving both opportunities and challenges to CIOs and IT organizations that administer and manage these deployments.

Multiple Paths Have Emerged

Clearly enterprise mobility is an increasingly hot topic in the enterprise — moving forward, the single most important priority that will give companies the peace of mind to invest in the mobile enablement of their workforce, will be securing their mobile deployments. The real challenge that I see for companies moving down the mobility path is the competing approaches that have emerged — this has put a significant burden on companies who want to deploy mobile solutions, as it is causing them to have to evaluate multiple approaches and vendors. These emerging paths will increasingly be covered as part of our mobile software research here at VDC.

One method to securing mobile applications that has quickly gained traction is the "secure container" approach, where corporate data is protected (i.e., encryted and isolated). This can be evidenced not only by the funding that several startups in this space have obtained, but by the large cutomers that they are beginning to attract. While several vendors that have emerged with secure container solutions, the most visible today are: Bitzer Mobile, Good Technology, and Excitor — as would be expected, each has a different approach and value play.

Be sure to Register for an Important Webinar Discussing the Impact of BYOD on July 19th at 2PM EST

If you'd like to learn more about BYOD, and the competing paths to securing mobile applications, I welcome your participation in an important webinar I will be co-hosting with Bitzer Mobile (@bitzermobile) later this week — you can register for it by clicking here.