VDC Research: Enterprise & Government Mobility Market Blog

How Microsoft can Gain Relevance in Enterprise Mobility

Microsoft has had fits and starts since releasing its first modern mobile OS in Windows Phone 7.

Microsoft has long been aware that mobile enablement has taken root within its customer base. While Microsoft has had the opportunity to leverage its cloud and software development capabilities and position them for the future, the company has struggled, and has seen little traction for its enterprise mobility related solutions. Since establishing its Enterprise Client & Mobility (ECM) team, Microsoft has been able to incorporate a broad portfolio of assets and products, namely: Windows Server, System Center, Microsoft Azure, Office 365, Microsoft Azure RemoteApp, Active Directory, Azure Active Directory, Remote Desktop Services, and security. Though small, the ECM team has quickly become a key pillar of Nadella’s vision for a Mobile-First, Cloud-First focus. The team has been working hard on elevating the messaging around Microsoft’s Enterprise Mobility Suite (EMS), which has Microsoft Azure AD Premium, Azure Rights Management Services (RMS), and Microsoft Intune at its core. The key will be to deliver on the value proposition that Microsoft has been leading with around its EMS suite — one vendor, one contract, one SKU.

Simplifying the EMM Procurement Process is Difficult

Microsoft’s messaging for its EMS suite is spot on. The company has correctly identified a major pain point that has historically plagued IT decision makers — licensing, contracts, and renewals. To compete and succeed, Microsoft must continue to work on educating its channel on the value play it has assembled in EMS as it has the right solution components in place for success. Microsoft has put together bundled pricing for EMS, which makes the product attractive for channel partners (at $7.50 per user/per month, EMS is aggressively priced — roughly half of what it would cost to acquire, Intune, Azure AD Premium & RMS separately. The company also plans to add Advanced Threat Analytics to its EMS suite in Q3 (via the technology it acquired from Aorata in Q4 of last year).

Microsoft has the right vision going forward (see below), but executing on it could prove challenging due to the intensifying competition in the market. Prominent EMM vendors such as AirWatch, Good, MobileIron, and SOTI have worked hard at streamlining and simplifying their pricing plans. Additionally, these vendors are working well with the mobile ecosystem as it evolves (for example every prominent mobile-first EMM vendors has integrated with Google’s Android for Work program [with the exception of Good]. Integrating with this program is critical to provide enterprise security for Android deployments going forward (there are alternatives such as Samsung’s Knox that provide the requisite containerization that is core to the Android for Work program, but even Samsung is now begun to support the program itself). Microsoft chosen not to participate in the program for very deliberate reasons — it wants to leverage the built-in MDM functionality it offers with Office 365 to lure customers away from their existing vendor. This makes sense, as Microsoft has chosen to not permit third-party integration with competing EMM vendors to its Office applications and doesn’t support standard iOS and Android APIs for its applications.

Easy Migration Provides an Opportunity

While many of Microsoft’s customers are likely to already be using a competing EMM vendors’ products, the migration process has also been streamlined; this has made it easy enough to switch over to Microsoft products (EMM vendors are still capitalizing on migrations away from BlackBerry’s platform). It seems as though customers are open to evaluating Microsoft’s EMS solutions as a means of consolidating disparate tools used to manage devices and applications. Identity is also being reevaluated as more companies mix cloud and on-premises software services. Intune does an adequate job in providing secure access to email and other Office 365 offerings on a wide-range of devices and operating systems. Azure RMS provides data protection, and hybrid Identity and Access Management (IAM) is anchored by Azure AD Premium, a service that nearly every company uses to authenticate its users. The emphasis on hybrid here it to highlight its importance of Microsoft's distinction of Hybrid Identity as the new "control plane." This is demonstrative of the company’s recognition of empowering mobile users on their device of choice while enabling IT with visibility into who is trying to access data and apps and providing a means of validating and authorizing the appropriate personnel.

Source: Microsoft

So What Does Success in Enterprise Mobility Look Like for Microsoft?

The firm’s recent restructuring (Nokia’s ex-CEO, Stephen Elop, along with Kirill Tatarinov, Eric Rudder and Mark Penn have been edged out of the company, and Terry Myerson has been elevated to lead the new Windows and Devices Group going forward) and the increasing emphasis on Windows 10 signals Microsoft’s desire to position itself as a cross-platform productivity solutions company and could potentially signify a de-emphasis of the company’s Windows Phone strategy. Instead, VDC expects that Microsoft will compete with its operating system and attract corporate interest through the OS’s ability to function across all Windows devices (computers, tablets, and phones). Indeed, Microsoft appears to be trying to make Windows 10 look and act more like iOS and Android and create an opportunity to port iOS and Android apps to the Windows 10 OS. If these apps are able to retain their look and feel, Microsoft may see more uptake with its Surface products.

Microsoft has made notable progress in augmenting and integrating its disparate product lines into a true enterprise-grade mobility management platform. However, the vendor has yet to prove it is making progress with real customers and needs to get some wins under its belt. Suffice it to say, Windows 10 will be a critical release for the company.

With Matthew Hopkins, Research Associate

VMware ups Security Ante and Shows its Ready for the Post-PC Era

C-Suite representation at the company's business mobility event shows that VMware has much bigger aspirations for its EUC division.

VMware did a masterful job in drawing attention to its business mobility event earlier this week in San Francisco. While we thought that a key partnership similar to the Apple/IBM tie up last summer might be announced, the company did make several important announcements. The primary news was the launch of an entirely new identity management solution (simply named: VMware Identity Manager) which offers integrated single sign-on (SSO) functionality with AirWatch's EMM platform. The fact that 15 new ISV partners have joined the App Configuration for Enterprise (ACE) program was also notable; VMware has correctly identified an opportunity to differentiate going forward via app curation. Sanjay Poonen made it clear that he envisions the ACE program extending much further than its current roster of 21 ISVs. Considering that the program is just 3 months old, and the strong brands/footprints in the enterprise of participating ISVs, they are off to a great start. However, the market will still require some education to understand the true value proposition of ACE.

Plenty of vendors (startups such as Centrify, Okta, OneLogin, Ping Identity and Symflified are the most prominent) have developed important enhanced security solutions (all are centered around automating authentication) and have increasingly turned their focus toward enterprise mobility. Then of course there are heavies such as IBM, Microsoft, and Oracle who have tenured Identity Management solutions. VMware's entry here isn't about displacing these vendors — the move shows that they are aware that their customers are looking for ways to improve their competitiveness, agility, and compliance — and that their customers are going mobile. Offering an Identity-as-a-service (IDaaS) solution is a smart, as it will enable VMware to offer sophisticated security (by combining secure cloud SSO, strong authentication, and sophisticated identity lifecycle management) while preventing their customers from going elsewhere for these types of services.

What's most impressive is VMware's ability to blend enhanced security technologies that were intended for traditional client-server environments with modern mobile platforms (and infrastructure). Case in point, the merging of its NSX solution with AirWatch's EMM platform; by using what VMware calls "network micro-segmentation", they are effectively bringing very granular virtual network policy controls (at the application level) which allows users or groups to access only the specific applications within the data center to which they are authorized. This type of technology has not existed until now, although containerization solutions such as Docker seem to be moving in this direction.

use of network micro-segmentation

use of network micro-segmentation

use of network micro-segmentation

VDC sees these solutions as gaining in importance as the theft of credentials has become a persistent barrier for secure mobile enablement. Implementing more robust security mechanism typically comes with a cost; solutions typically introduce more complexity and negatively impact the user experience. From what VMware is showing, they seemed to have nailed this. However, it feels as though others will be able to replicate this seamless (and secure) method of mobile application delivery.

Keys to success for all of the participating vendors in enhance security will be to deliver solutions that are able to preserve the user experience while delivering robust mobile solutions that aren’t cumbersome and are designed to accommodate the way mobile users want to operate. New entrants must demonstrate that their approach is differentiated to compete against large and established security vendors. While mobile authentication is niche, the market is crowded, and visibility will be critical to establish the right partnerships and channel relationships. VMware seems to be coming out of the gate quickly.

* Side note: VMware also announced it will be working more closely (and presumable integrating more deeply) with Apple going forward; not coincidentally, key rival MobileIron was able to interject its partnership with Apple on its OneTouch solution into the news cycle on the same day of VMware business mobility event. I'm waiting to learn more about the details on the depth of both of these partnerships.

WWDC: Enterprise Recap

While the themes at WWDC were consumer oriented, there actually were some key enterprise elements.

Apple’s highly anticipated annual Worldwide Developers Conference occurred on Monday at the Moscone Center in San Francisco, California. As expected, many of the developments revolved around consumer products, namely the Apple Watch and a new music streaming service, Apple Music. However, enterprise enhancements were also present, as Apple looks to increase its presence in corporate environments.

In keeping with recent tradition, Apple announced its new operating systems: iOS 9 and OS X El Capitan, which allow for greater integration among devices. The new OS X does not include many new features, but iOS 9 provides some new improvements that enhance the competitiveness of the iPhone and iPad in both consumer and enterprise markets. The new iOS features a battery saving mode which Apple claims will add three additional hours of battery life.  The company is late in incorporating this feature, which consumers clearly have been asking for - other prominent OEMs such as Samsung, Huawei and HTC have offered this capability for some time now. iPads have become more business friendly under the new operating system as new multitasking features were implemented. In particular, the new split screen feature similar to that present in Windows and some Android tablets will allow users to use separate apps simultaneously. In addition, the iPad will include a trackpad feature allowing for greater control and quick typing. These enhancements should allow for increased user-productivity, and illustrate Apple’s attempt to further outfit the iPad as a hybrid- laptop replacement similar to Microsoft’s Surface tablet.

Despite the changes mentioned above, the WWDC did not entail any significant developments or changes that will affect Apple’s overall trajectory. The new operating system for the Apple Watch and the new music streaming service may increase consumer support for Apple products; however, the innovations relating to enterprise will likely not significantly increase corporate demand. The changes to the iPad amount to Apple merely catching up to Microsoft and Samsung by incorporating a true multitasking feature. This new development takes the place of an old feature claimed by Apple to be multitasking, but in reality was more akin to app-switching. New security features, such as the addition of a six-digit passcode and the option to force enable passcodes on corporate owned devices, will certainly garner support among those in the corporate world looking to protect their corporate information from what appear to be endless data breaches. This enhancement also follows in part from Microsoft’s emphasis on security, as exemplified by Windows 10’s sophisticated containerization capabilities.

Apple has also made clear on its website that several features important to the business community will be made available in the near feature. Promised improvements in networking and device management have the ability to greatly improve business processes through increased functionality. Unfortunately, Apple does not provide any information regarding these enhancements on their website so their usefulness remains a mystery. These are critical enterprise elements to iOS 9; to date Apple has done a great job at augmenting the EMM elements of its OS, and we look forward hearing more about these key features.

 

A key advantage for Apple remains its App store, which for the past year has included Microsoft Office as one of its offerings. The prevalence of the App store is exemplified by the fact that 98 percent of Fortune 500 companies feature an app in the Apple App Store. Furthermore, the new spotlight search feature should allow for greater efficiency in the utilization of applications, seeing as the search results will include information present in older apps that may have been forgotten. The unification of multiple platforms working and interacting together may allow for efficiency gains as employees work more frequently outside the office. Microsoft has followed Apple’s lead in attempting to develop a similar network across devices with its new operating system, Windows 10. However, while both these companies appear to have an eye on the future, the gains of such forward thinking may be farther off as companies will need time to realize the productivity and monetary gains from such integration. In essence, the WWDC highlighted Apple’s continued efforts to cater to its strong consumer base while augmenting its enterprise feature set.  Balancing consumer and enterprise demands is a challenge faced by all OEMs and begs the question- who will be the first to offer a business edition phone (a la BlackBerry)?

VMware Teases Special "Seminal Announcement" on June 16th

VMware's EVP and GM of End User Computing Sanjay Poonen took to Twitter to announce that both he and the company's CEO Pat Gelsinger would be holding a "special event" on June 16th to announce several important enterprise mobility oriented initiatives.

Public companies don't often promise "seminal announcements" — unless they have something truly important to share. In this vein, this should make for an interesting reveal. There have not been any notable acquisitions in the mobility space for some time now (arguably, since VMware acquired AirWatch back in early 2014). While announcing an acquisition is by no means certain/imminent, it seems likely. Another possibility would be an exclusive partnership with a high profile partner (similar to the summer '14 Apple/IBM announcement).

Following VMware's acquisition of Desktone in October 2013 (and AirWatch shortly thereafter), the company has added Imidio, and CloudVolumes to its roster. These have been nicely integrated into the company's increasingly broad Horizon Suite in a relatively short period of time and have enabled VMware to separate itself from its reliance on certain key rivals such as Citrix. Prior to acquiring AirWatch, it was becoming clear that VMware's organic efforts in enterprise mobility would not be sufficient to compete against the likes of Citrix, Good Technology, IBM, Microsoft, MobileIron and SOTI (and others). While it has been just over a year since AirWatch was acquired, VMware has reported >50% YoY business mobility license bookings (however, it is not clear which elements are being counted); regardless, these are good numbers compared to other competitors. The company's EUC Division definitely is operating with a post-PC mindset — this can be evidenced from the company's vision that it articulated during its recent "What's New at VMware EUC" conference call.

On paper, the Horizon Suite seems to be a viable platform to play a meaningful role as this transition intensifies. While integration work remains, as articulated during the conference call on May 20th, customers are beginning see the value of the combined Horizon Suite and AirWatch platforms.

It's fun to speculate, particularly now that "event season" has drawn to a close and the typical summer slowdown (from a news perspective) is quickly approaching. In my view, teasing out this announcement is brilliant marketing — VMware's already cut a YouTube video and will likely continue to promote the event up until the 16th.

Here's a link to register for the event if you haven't done so already.

With Kathryn Nassberg, Analyst