VDC Research: Enterprise & Government Mobility Market Blog

A Square Service in a Round, Cash Market?

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

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

• NTT DOCOMO
• KDDI
• PayPal

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

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

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

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

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

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

Sapphire: Cloudy With the Promise of Business Transformation

SAP kicked off the first day of their annual SAPPHIRE NOW event this week in Orlando with 4 press releases (http://www.news-sap.com) - two of which pertain directly to enterprise mobility. First, the company announced that its Afaria device management solution was available on Amazon's Web Services (AWS) Marketplace. The AWS Marketplace will offer a fully configured SAP Afaria 7.0 server, that brings a new UI, Windows Phone 8 support, an app portal that is integrated with the SAP Store, as well as mobile analytics dashboards for BI reporting. SAP clearly sees the need to be aggressive as vendors such as AirWatch, MobileIron, and Fiberlink are enjoying significant success in the channel and in acquiring new customers. In this vein, SAP revealed competitive pricing ($1.11 per user/month), as well as the ability trial its Afaria solution for free (a first for the company).

SAP has built a sizeable roster of managed mobility partners such as (Atos, HP, Rogers, and Swisscom - to name just a few) that will be able to execute the new business that emerges from the AWS Marketplace or offer a co-branded instance of Afaria in the cloud via their own cloud. SAP's Sanjay Poonen (President, and head of SAP's Mobile Division) hosted a roundtable and provided some color around the value proposition of moving Afaria to the cloud that he sees for the company's existing customers and prospects. SAP seems to be settling on the name "Afaria Cloud Edition"

“By offering SAP Afaria on the secure, scalable AWS cloud infrastructure ... and making it as easy as possible for customers and partners to test and deploy the industry’s leading mobile device management solution in an economical and reliable fashion”

The second mobile-oriented release centered on the company's furthering of its mobile security portfolio - SAP revealed that it has partnered with Mocana, and will resell the company's flagship security solution (Mobile App Protection or MAP). "App wrapping" is a core element of Mocana's MAP solution, and was a notable hole in SAP's holistic EMM strategy - while many of SAP's competitors offer app wrapping solutions, Mocana has significant tenure, IP and presence in federal markets (the company has been active in these markets since 2002), offers a robust solution, and is a good choice as a partner for this capability. Some have criticized SAP for not developing this capability on their own, I disagree, as does the company's co-CEO who made clear that he recognizes the value of partners in filling gaps in the company's product portfolio. The partnership with Mocana is just one element of the mobile security enhancements that SAP has revealed and SAP's Poonen made it clear that the company recognizes the need to emphasize mobile security "cyber security is increasingly a board room priority, and as such, iron-clad mobile security is job one for all CIOs and CISOs to execute their mobile strategy” - no doubt about this, and in this vein, the company has evolved its SAP Store solution (the company's MAM offering) which now offers a mobile app distribution storefront, which includes secure distribution of internally developed and purchased third-party apps - this was long overdue, and positions SAP as a true end-to-end EMM solution provider.

HANA Enterprise Cloud - Speed/Flexibity/Reliability

To date, the wide majority of SAP's customers remain largely "on-premise" - however, the company has clearly come to recognize that its customers are ready, willing and quickly moving to the cloud. SAP saw small and more nimble competitors such as Salesforce (not small any longer), NetSuite and Workday capitalize on its lack of a fomalized cloud strategy and has made notable acquisitions to better position its application portfolio for the cloud. The acquisitions of SuccessFactors and Ariba made it clear that SAP was serious about moving to the cloud - the company's HANA cloud (which SAP boasted had ~30M users on it today) takes the strategy even further by opening up a platform on which the company can foster innovation by giving new partners the ability to develop apps and solutions to run on the HANA cloud.

Stay tuned to our blog for further updates from Orlando.

Geek Sapphire stat: there are 5.2 miles of optical cable installed at the Orlando convention center for broadcasting video at this event.

 

Posted with Blogsy

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:

Power4Merch

• 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

This 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.

Apperian Automates Custom App Deployments

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

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

Mobile IT Investments Required to Support our App-Centric Future

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

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

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

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

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

IT Still Challenged

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

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 …

Mobile and Channel First

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

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

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

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

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

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

Going to MWC? Let's Meet

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

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

To set up a meeting:

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

 

NRF 2013: Translating the interactive online experience into the store...and other observations

NRF 2013 certainly lived up to its “The BIG Show” billing and delivered an extremely well attended trade show by both retail technology vendors and investors. From mobile payments and POS innovation to retail analytics and concierge programs, one key theme throughout NRF was the desire by retailers to replicate – if not improve – the interactive experience enabled through online channels. The  growing threat of trends like show-rooming and from e-tail powerhouse Amazon.com and continued inability of traditional retailers to more effectively integrate their online and in-store experiences are leaving retailers predictably nervous.

The recent holiday retail sales figures published by NRF are proof positive as sales through ‘stores’ rose by 3% - down from 5.6% in 2011 – while online sales grew by 11.1%.  While these channel patterns are not expected to change dramatically, what we are beginning to see – as evidenced by a number of innovative releases at NRF – is that solutions to deliver a true integrated omni-channel solution for retailers are increasingly viable and that retailers are serious about delivering this experience. To that effect, some of the key themes and unique announcements observed during NRF 2013 include:

• The power of the associate. Retail associates represent one of – if not THE – key competitive
  advantage of traditional retailers. Yet they frequently not treated as such. Clearly high turnover of associates contributes to retailers challenges. However, retail associates need to be better leveraged – and trained – to support the increasingly educated consumer. This means equipping retail associates with solutions to enable real time access to critical product and inventory data and communications and collaboration capabilities within the retail setting. Innovative solutions such as Motorola’s SB1 smart badge are a cost effective example of how retailers can empower and support their associates.
• The integrated retail experience. The industry has been discussing omni-channel retailing for several years. However, the reality never quite lived up to the promise. What we are starting to witness, however, is that for select items – such as apparel or DIY products – fulfillment from store locations is gaining a lot of attention by retailers. Moreover, the seamless integration of the online store-front with the in-store retail solutions is delivering the capability where, for example, Home Depot can fulfill an order it received within 20 minutes by an in-store associate.
• More actionable analytics. For an industry with such slim margins it is incredible how little retail decision makers really know about their operations. Ask how long it takes to run a price mark-up/down and a blank stare will be a common response. Workforce management analytics and the dashboards that make the data readily accessible are the often overlooked, yet exceedingly important tools for retailers in today’s hyper-competitive climate where decisions need to be made spontaneously, often in a highly distributed manner. Solution providers
  such as Kronos and their recently introduced Workforce Tablet Analytics will assist retailers in deriving real value from Big Data.
• Store format changes. One of the biggest changes we are in the midst of witnessing is the dramatic shift in POS infrastructure. While traditional ‘fixed’ POS stations remain the defacto solution, the rate at which retail organizations are investing in mobile POS and payment solutions and, equally importantly, the rate at which they are NOT upgrading legacy POS solutions. Unique solutions from established payment vendors such as Verifone and Ingenico that enable secure payment across a variety of mobile devices – such as tablets and smartphones – and the integration of new payment types with existing retail infrastructure (thing PayPal and NCR) is driving massive change. While mobile POS offers some clear benefits in the form of improved service quality, speed of sales process and personalization of shopping experience it is not until this year when we expect a fundamental shift towards mobile payment. One major question, however, is whether mobile can sufficiently withstand the rush of a seasonal shopping season such as end of year holiday season.
• Store format changes, part II. One of the other developments and trends we discussed and are tracking is related to the fluidity of the retail operation and the ability for retailers to more rapidly respond to quick shifts in the market. An impact of this is the shift to smaller footprint store formats and larger warehouses or more warehouse space. Technologies that allow retailers to be more responsive to rapid changes in demand or product mix and do so on a
  individual store basis are increasingly critical.
• Microsoft’s Windows 8 Embedded Handheld. While there has been much anticipation and
  debate leading up to Microsoft’s official release of their next generation OS for enterprise/ruggedized mobile devices, the cat is finally out of the bag. Among other developments, Microsoft is delivering UI upgrades to bring this platform on par with modern mobile platforms and some of the prototypes we previewed were truly transformational. As expected, there is a clean break from the existing Windows Embedded Handheld 6.5 – which Microsoft will continue to support through 2020. What was perhaps not expected was that the launch will be coordinated with a select group of OEM partners, unlike the broad availability
  of existing solutions. Microsoft is clearly taking a page out of the Windows 8 launch program. While the volume hit will be negligible – launch partners account for approximately 60% of rugged handheld shipments – in the case of the niche-oriented and still fragmented market, this may backfire. 

2013 Predictions - Part 2

Mobile Payment Solutions Explode:  With or Without NFC

Becoming established as the lead mobile payment solution in the emerging digital wallet wars is an essential win for the Near Field Communications (NFC) technology if it is ever to gain widespread adoption in the world of mobility. After all, mobile payment is the ideal everyday application of NFC:  a mobile device can become your mobile wallet with a wave or a tap and eliminate the need to carry cash or credit cards. Yet heading into 2013, NFC is no better positioned to be the lead technology for mobile payment solutions than in 2012. Is it time to declare that NFC is dead?

Many have argued that the tipping point for NFC would be its adoption by Apple. To be sure, if Apple's iPhone included NFC technology, it would cross over the critical mass line, since it is already available in many Motorola, Nokia, and Samsung devices. This would help solve one barrier for NFC adoption:  retailer confidence. Without Apple, the 800 pound gorilla of the space, retailers are currently hesitant to make investments to support touch less mobile payment solutions. Yet would Apple's adoption really be enough to make NFC a household technology?

The truth is that NFC's uptake relies much more upon the enthusiasm of service providers, especially payment gateways, than upon adding further device manufacturers. VDC's research indicates that the volume of mobile transactions will continue to explode as these devices are increasingly integrated into many customer and enterprise experiences, but the mobile delivery channel for transactions remains unclear. Despite the ease of use and convenience of NFC, payment gateway providers such as PayPal have indicated that they are more than hesitant to jump on board. A company like PayPal is agnostic about the last inch of a sale, the mobile payment transaction, and the value proposition from NFC has not been enough for PayPal to devise a mobile strategy based on NFC.

Without the support of key service providers, NFC is poorly positioned to capture significant share in the mobile payment solution market. And the longer it takes for NFC to ignite, the less chance for it to grab hold. Consumers value ubiquity. Whatever is invisible and frictionless will win. Right now, that is not good news for NFC.

Carriers Exercising Clout in Battle for the 'Start Screen'

Carriers, HW OEMs and mobile OS vendors all have vested interest in pre-installed third-party apps. App distribution is complex, and preloaded apps offer a proven way for developers to get their app in front of a large audience with a single effort. Carriers are even taking the opportunity to bundle additional preloaded apps when users make over-the-air software updates. While preloaded apps aren't new, the process of how they are selected is complicated and variable. HW OEMs are eager to preload apps, particularly if they get upfront payments from developers and/or shares of the revenue generated by the app.

Moving forward, HW OEMs will be challenged to control what ultimately remains on the devices. A carrier may decide to wipe a device of everything except those apps that specifically fit their goals (e.g., promote data consumption and/or appeal to a particular demographic) and are branded according to their exacting standards. Carriers can also negotiate with app developers along the same lines:  providing placement at different levels of the home page depending on the level of guaranteed annual fees.

Much depends on the business and strategic considerations - whether the app is seen to enhance the position of the carrier by providing a quality product which differentiates their offer, whether it aligns with broader specific goals (e.g., reaching a specific demographic, their pricing bundles,etc.) and whether or not the app developer is willing to provide total or partial exclusivity (e.g., based on geography). Given the expanding choices consumers have, preloaded apps that can make a device more attractive, useful, fun and appealing to specific consumer segments - particularly data-hungry apps that require constant connectivity and can be sold in conjunction with all-inclusive data plans.

The device proliferation that continues unabated will have carriers increasing their focus on ways to make their device configurations shine to consumers, ensuring that the battle for the start screen will intensify in 2013.

Reprioritizing Mobile Security to Avoid the Hype Trap

Is the relative lack of mobile security breaches a function of the lack of sophisticated or mission/business critical data being accessed by and stored on these devices or an endorsement of the robust capabilities of existing security solutions? Mobile security is a real threat and needs to be treated seriously, especially as mobile applications become more sophisticated and more sensitive data is being processed by mobile devices. However, much of the recent attention and hype has been directed towards mobile malware - especially in connection to Android devices. What is becoming increasingly evident is that malware is not nearly the threat once envisioned and anticipated.

Where greater focus is required is in the design of mobile applications. There are numerous poorly designed mobile applications where, for example, information is being shared that users are unaware of. Moreover, the increased momentum behind HTML5/Javascript for enterprise mobility is presenting new security challenges and driving the requirement for skilled developers. Key HTML5 features important to enterprise developers - such as local storage capabilities and WebSockets - are presenting new challenges that require more robust encryption and potential extensions to existing security defenses.

Although we expected to see continued FUD with respect to mobile security, we similarly expect a more sober and balanced approach to addressing security concerns as enterprise mobility opportunities and solutions mature and as IT organizations' skills improve.

2013 Predictions - Part 1

Mobile Developer Skills Gap a Growing Issue

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

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

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

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

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

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

Rugged Mobile Community will Struggle with Balance as Market Segment Matures

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

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

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

New Entrants to Drive Increasing Competition in Mobile Content Management

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

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