VDC Research: Enterprise & Government Mobility Market Blog

Appcelerator Runs out of Gas

Earlier this week, Axway, a global provider of enterprise engagement software that enables application programming interface (API) management, identity management, mobile app development and analytics announced that it had acquired Appcelerator, a privately held cross-platform mobile development platform vendor. Appcelerator’s flagship, Titanium, utilizes an OS abstraction layer approach to convert HTML, JavaScript, and CSS into native iOS, Android, and Microsoft Windows applications. The company also productized an mBaaS solution (Arrow) to help developers simplify the process of assembling APIs, models, and connectors to access unstructured corporate data.

While Appcelerator was successful in growing a large developer community by building a powerful suite of tools for cross-platform development, the company was struggling to achieve profitability and was forced to lay off 30% of its employees this past March. Like others who were early in entering the mobile development platform space (e.g., Antenna Software and Verivo Software), Appcelerator failed to gain the traction required to remain as an independent private firm. While the company raised a significant amount of capital (nine funding rounds for a total of $87.9M), Appcelerator was unable to grow its revenues past $10M, and was unable to gain significant traction with large enterprise customers (a challenge for most young startups).

A Fragmented Market

The mobile development platform and tools space is one of the most active in the ecosystem of mobile-first vendors. Whether native, hybrid, or HTML5 web applications, the number of mobile design and development tools available to developers continues to grow (VDC counted 25+ vendors with less than $10M in annual revenues when we assessed the market in Q4 2015). Market leaders such as IBM, Salesforce, and Kony have cemented their position in the market by focusing on the depth and breadth of their solution range. For example, each of these vendors has been actively engaged in refining their development tooling, expanding their backend data access capabilities, and simplifying their ability to integrate with multiple data sources and third-party systems. Other market share leaders such as OutSystems, SAP, and Microsoft are focused on building more tightly integrated, cleaner, less complicated, and more user-friendly development platforms. Other vendors are focused on modernizing legacy applications and speed—these vendors can reduce the pain associated with manually modernizing code, resulting in more reliable, cost-effective, and feature-rich mobile apps.

While Appcelerator's immediate revenue contribution will be minimal, we doubt that Axway paid a large multiple for Appcelerator, based on its flat growth and inability to grow its enterprise customer roster. However, the acquisition makes sense, as Appcelerator's platform is synergistic with Axway's focus on API management, identity management, and cloud integration.  Additionally, Axway's parent company (IT services giant Sopra Steria Group) will likely become a viable channel for Axway to promote Appcelerator's platform going forward.

No Margin for Error for Windows 10

All eyes are on Microsoft with tomorrow’s much-anticipated and written-about release of Windows 10. This next generation of Windows could prove a key turning point for the rugged market – and the rugged handheld market in particular, which has seen fluctuating demand in recent years due in large part to OS uncertainty following the lack of success with Windows 8.1. The launch of Windows Embedded 8.1 Handheld as a successor to the popular but aging Windows CE and 6.x began inauspiciously with delays and lack of device support from market leaders, with the result that the only devices available supporting the OS were from vendors limited market share.  Unsurprisingly, Windows Embedded 8.1 Handheld’s market share has mirrored that of Windows Phone in the consumer market by languishing in the single digits behind Android and iOS. More significantly, however, the rocky launch has altered enterprises’ perception of Windows as the de facto operating system for line-of-business mobile deployments.

Microsoft’s stumble becomes Android’s opportunity

In the aftermath of Windows Embedded 8.1, organizations faced a difficult choice – undergo the migration to Android, or delay refresh cycles of their aging installed device base in the hopes of a better rollout with the subsequent iteration. Such a decision has serious implications for how front-end systems running on devices interact with corporate back-end systems. Rugged devices effectively facilitate the transfer of data between front and back-end systems, with the latter running on Windows; a transfer to Android complicates the relationship and requires additional coordination. This added layer of complexity has served to dissuade more conservative companies from migrating to Android. Organizations unencumbered by legacy systems, however, are looking increasingly to Android for its lower cost devices and familiar user interface. As a result, VDC’s data shows that Android has come to represent roughly 15% of the rugged device market, with growing levels of acceptance in the United States from larger organizations. A key turning point for the operating system came with the decision by Home Depot in 2014 to select Android for its latest mobile deployment, marking one of the first Tier-1 companies to forgo Windows for a large-scale deployment.

Success lies with the ISV community

One of the key factors that will ultimately determine the fate of both Android and Windows in the enterprise will be the reaction from the ISV community that supports them. While Microsoft has the advantage of scale and legacy to assist development for Windows 10, and seems to be positioning itself as a cross-platform productivity solutions company, it still needs active and engaged developers. Much of the development community has shifted towards the volume opportunity that comes with the popularity of the dominant mobile platforms (Google’s Android, and Apple’s iOS).   This makes partnering with key ISV critical for Microsoft going forward – for this reason, VDC believes that it is likely that the company will pursue an acquisition of a rapid application development vendor with a robust developer community.

Time is not on Microsoft’s side

Although Windows remains the predominant OS in enterprise by a considerable margin, the gap has steadily narrowed in recent years with the growing emphasis on mobility and the explosion of bring-your-own-device (BYOD) as a viable option among smaller and mid-size organizations. The ability of consumer-grade devices to work in the enterprise has opened the door to Google and Apple, who have made significant investments in showing enterprise support through strategic partnerships. A majority of respondents to VDC Research support multiple operating systems for their line-of-business applications, and increasingly, the focus of development is for Android and iOS. Putting an end to Android’s recent success in the enterprise-rugged space and regaining market share will depend largely on Microsoft’s ability to ensure that the OS is implemented quickly in business environments. Time is not on their side, with patience increasingly running thin and adoption rates growing for Android as it shows it suitability as an alternative OS. To quickly integrate the new OS, Microsoft will need to work tightly with OEM and ISV partners to ensure rugged devices work effectively with the new OS and applications are supported. Zebra, a dominant player in the rugged space, announced that it will have several products running Windows 10 by the end of 2015. However, these products will be joined by others running Android; illustrating the company’s effort over the past few years to incorporate both operating systems so as to meet various industry demands.

A last chance to dominate?

Windows 10 represents a key turning point for Microsoft, particularly as the company is doubling down on software, given its most recent round of layoffs that cut 7,800 jobs from the phone business and writing off nearly all of the value from its Nokia acquisition. After considerable pushback on Windows 8.1 and Windows Phone from the consumer and enterprise markets, Microsoft can ill-afford another misstep. Any further stumbles will place the OS in jeopardy of losing market dominance and leave the playing field wide open for the competition in both the rugged and enterprise-issued markets. 

 

With Matt Hopkins, Research Associate

Samsung’s Search for Success in Enterprise Mobility

The company is putting all the building blocks together to potentially become a significant enterprise mobility solutions and services player. 

In 2014, Samsung watched its mobile sales drop 21 percent as increased competition further ate away at the company’s market share in the smartphone space. Apple’s consumer-friendly iOS garnered greater control of the high-end smartphone market with the company’s release of a “large-display” iPhone 6 and 6 plus. At the other end of the spectrum, low-end manufacturers such as Xiaomi captured Samsung’s market share—particularly in emerging markets—by producing similar devices with lower prices. As a result, the rapid evolution of the smartphone market has left Samsung squeezed between, and battling Apple and low-end manufacturers. Cognizant of the adverse trend moving against them and keen for alternative avenues of differentiation, Samsung has for several years been increasing its mobile presence in the enterprise space—a market still fairly open for penetration following the decline of BlackBerry and relative neglect by Apple.

A Move into Business Services

When it comes to enterprise mobility, the consumer still rules. The proliferation of “bring your own device” (BYOD) policies throughout the business world requires that a company produce devices sought after by consumers. Given the highly-competitive consumer device landscape, Samsung spent the past few years developing partnerships, software-capabilities, and enterprise mobility expertise to augment their hardware business, addressing the security, management and support requirements critical to enterprise decision makers. To augment these partners, Samsung is also investing in enterprise mobility service capabilities and in January launched the Samsung Business Services program. This program takes a three-tiered approach to addressing the demand for mobility in the enterprise space and builds upon unique capabilities such as KNOX that Samsung has long been developing. At a high level, Samsung intends to be a technology collaborator with an extensive ecosystem of partners to provide mobile solutions to customers.

However, while providing comprehensive support to enterprise customers is helpful and desired by some companies, it will not alone significantly increase the demand for devices. Moreover, the idea that companies desire a seamless and integrated system for managing all things mobile is not revolutionary, with many enterprise IT powerhouses – for example Microsoft or IBM – increasingly well positioned to deliver these capabilities. The key challenge for a company like Samsung – that continues to derive the majority of its mobile revenues through hardware sales – is whether they can affect enterprise decisions in today’s heterogeneous/multi-platform environment. Our contention is that as enterprise’s mobility initiatives continue to become more strategic – and mobile deployment models shift from BYOD to COPE (or more enterprise influenced mobile decisions) – that these enterprise investments and initiatives will provide greater returns.   

A Vertical Focus for a Meaningful Impact

Another layer of Samsung’s enterprise approach is establishing vertical or industry specific know-how. Acknowledging that to become “business critical” requires, by in large, focusing on the nuances of certain industries, and creating specific solutions to industry problems; Samsung has tailored its products to the education, healthcare, government, hospitality, and retail industries. These large verticals possess certain characteristics and unique business processes that are in need of technological and mobile solutions. By addressing the concerns of these industries—security, regulation, rapid technological change, etc. — Samsung has the opportunity to become ingrained in business processes, and thus become “business critical”. Today’s these capabilities are still largely a work in process as Samsung invests in building out this institutional knowledge. Given the complexities and nuances associated with many vertical opportunities, this will require staying power from Samsung.

Another critical cog in Samsung’s enterprise push is their extended partnership with BlackBerry. Samsung has integrated BlackBerry’s mobile-billing and encryption technologies into its KNOX platform, enhancing its position in the high end of the security bracket in highly regulated industries. Following the collaboration on the BlackBerry SecuTablet – which features Samsung’s S 10.5 hardware and Knox for device encryption, secure apps and software from BlackBerry and app wrapping technology from IBM – new rumors are surfacing around a Samsung-BlackBerry co-developed Android smartphone. Depending on the success of these initiatives, even closer ties between both organizations is not out of the question.

Finally, the partnership between Red Hat and Samsung, to a certain degree similar to the one between Apple and IBM, looks to provide industry-specific applications that address business concerns and needs. Ultimately this is all about mobile applications and mobilizing enterprise workflows, an area that has been lacking. Leveraging Red Hat’s mobile application platform and optimizing enterprise specific applications on Samsung devices will be central to this relationship. However, the ability of these applications to address business problems will largely go under-utilized unless Samsung can reach the decision makers at these companies. Further in-roads must be made to gain the ear of decision-makers, whom often lie outside the IT department.

Staying the Course 

That Samsung is looking to capitalize on mobility demands from the enterprise space is not surprising. The company is putting all the building blocks together to potentially become a significant enterprise mobility solutions and services player. They are clearly not alone with these pursuits, with a more enterprise savvy Apple and a resurging Microsoft – among others – representing key challengers. Microsoft will be particularly interesting to follow with palpable anticipation surrounding Windows 10, their OneDrive for Business solution and leading enterprise identity and access management assets. With the enterprise mobility ‘debate’ shifting towards content and identity management, Microsoft’s position is especially strong.    

With much of the enterprise mobility opportunity still ahead of us, Samsung is increasingly well positioned. However, as a company that interprets success on quantity of devices sold, it will be critical for Samsung to set realistic expectations for their enterprise strategy. Staying power and focus will be critical.

Be sure to check out our upcoming VDC View as we dig deeper into this topic!

With David Krebs

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.

Could the Apple Watch be a tipping point for enterprise wearables?

In the days before the official launch of the Apple watch on the 24^th and Apple counting nearly a million pre-orders since last Friday, much of the tech world is abuzz with talk about the newest smartwatch to hit the market and the impact it could have on wearables as a genre. Although wearable devices have been on the market for some time, they have failed to garner any notable traction in the consumer market. The question remains as to whether the pricier, designer Apple Watch can be the catalyst for widespread adoption the way its predecessors were for smartphones and tablets and pave the way for greater integration of wearables in the enterprise.

The slow climb towards enterprise acceptance

Despite the current focus on smartwatches, the wearable form factor represents a broad spectrum of devices, particularly in the enterprise, where less consumer-oriented devices like wrist- and hip-mounted computers and ring-mounted scanners are more the norm, as well as head-mounted displays like that of Vuzix and the much-maligned Google Glass. However, the majority of the deployments for these wearables have primarily been for relatively niche applications that have traditionally revolved around data collection-intensive environments like the warehouse, where the benefits of hands-free devices are more immediately tangible. However, with enterprise mobility reaching even the most conservative of companies, interest in wearables is spreading across industry verticals. Notable examples include the healthcare industry, as well as logistics and field services where the benefits of being hands-free are becoming increasingly apparent. While many of these developing use cases have been for head-mounted displays like Google Glass (particularly in logistics and warehousing for vision-based picking applications), it has made enterprises take a more creative approach to equipping their mobile workforce and the benefits to be gained. Data from VDC Research shows that a growing number of industries are evaluating wearables, although the lack of a clear ROI remains one of the primary barriers to adoption.

Finding the killer app

The primary challenge in bringing wearables like the smartwatch into the enterprise is that, unlike other mobile devices, the wearable is not typically a standalone product, but is tethered to another device – usually a smartphone. By acting as a complementary device, it brings up the question as to whether it is truly needed in line of business applications. However, the ISV and development community is bullish on the notion, as evidenced by the growing number of solutions that incorporate smartwatches: last month Good Technology became the first enterprise mobility management (EMM) vendor to support wearables with Good Work, while Salesforce launched Salesforce Wear in the summer of last year as a platform to encourage app development for the form factor. Many of the emerging use cases revolve around hands free notification and ID functionality through NFC and BLE, although EMM vendors like Good Technology see potential for data security through the use of the device in dual-factor authentication and access control. Nevertheless, many of the gains are viewed as incremental and complementary rather than revolutionary, as the introduction of the smartphone and tablet into the workplace has set the bar high.

 Awaiting the tipping point

With thought leaders across the board predicting the explosion of wearables and IoT both in consumer and enterprise markets, it is only a matter of time before wearables as a whole gain more widespread acceptance and, once again, all eyes are on Apple. If the company succeeds as it has in the past in capturing the imagination of the public and the developer community alike, this month’s launch will likely prove the much-anticipated and talked about tipping point for wearables. This, in turn, will bring forth new layers of complexity regarding BYOD and security policies to an already complex environment, especially as the vast majority of devices will be personally-owned for the foreseeable future. In the meantime, April’s launch will determine whether wearables can finally make the transition from consumer trend to enterprise-ready. 

(Research and contributions from Judy Zhang)

How Quickly Will DYI Mobile Initiatives Give way to Mobile Managed Services?

Mobile device proliferation has IT departments reconsidering how to best deliver increasingly business-critical mobile IT services.

While business analysts are now more experienced with identifying the right use cases and design requirements for mobile applications, designing, developing, integrating, managing, and maintaining these apps remains a significant task. Mobilizing and integrating manual business processes and workflows with modern mobile platforms is not only complex but costly, particularly when considering that many legacy applications and systems are not being abandoned. Creating new mobile applications to integrate with legacy systems requires both a high degree of specialized skills and additional software. As a result, enterprises are quickly discovering that mobile enablement is not only costly and time-consuming, but that managing and maintaining their deployment environments may be best handled by an external 3rd party.

VDC sees expanded usage of mobile devices to facilitate day-to-day business as an enabler for IT to reassert the importance of its role in digital transformation initiatives. However, considering that these initiatives are (likely) already underway, selecting the right partner(s) to deliver a suite of more reliable and robust mobile IT services will become increasingly important – particularly for organizations where mobile initiatives have become business-critical. VDC's research shows that even the largest enterprises are inadequately staffed with the mobile expertise required to properly manage and maintain a rapidly growing mobile deployment environment. Professional services vendors have proved their ability to deliver strategic business impact to their customers, not just operating cost reductions. Additionally, these vendors are increasingly well equipped to help their customer implement mobile innovations with more speed and less pain.  

That said, end-to-end “as a service” mobility solutions will ultimately be the de facto choice for many enterprises going forward. Considering the early stages of true mobile enablement in enterprise, managed mobility services from managed service providers (MSPs), communication service providers (CSPs), and systems integrators (SIs) are poised to benefit from the current mobile boom. Due to limited mobile IT support capabilities, VDC expects organizations to expand their relationships with third-party solution providers that specialize in mobile solution support and integration. The services opportunity will expand well beyond traditional mobile hardware support and break-fix services that are common today. Mobility-oriented services to support expanding deployment environments, application and database integration, as well as security, asset management and logistics services will be key areas of focus for professional services firms going forward.

VDC has just released a comprehensive Report on the market opportunity for Mobile Professional Services. Vendors were profiled in this Report include:

CSPs: AT&T, Sprint, Verizon Business, and Vodafone Global Enterprise
SIs: Atos, Cognizant, HCL, IBM Global Services, and Infosys
Mobile-First Solution Providers: DMI, Enterprise Mobile, Stratix, Vox Mobile and Zebra Technologies

Click here to download the Executive Brief, or email me for more information.

Many SMEs in Field Services are still Conservative in Employing Mobility Solutions

Despite the buzz that surrounds enterprise mobility, the fact remains that a large percentage of SMEs have yet to integrate mobile software and hardware solutions into their line of business (LOB) applications. A recent survey from Software Advice, a company that researches and reviews field service solutions, revealed a surprisingly high number of respondents continue to rely on manual documentation, including paper and whiteboards for their LOB operations. Those who use software frequently rely on basic software like Excel and Quickbooks to handle operations for which they are not optimized. Often, this can be due to a combination of factors that include budgetary constraints, a lack of awareness of available solutions, and a tendency to stay with familiar ways of operating. The latter factor belies a conservative streak in many organizations that can transcend company size and lead to mobile deployments that run on decade-old technology. This is evidenced in the uptick of upgrades following the retirement of Windows XP as a Microsoft-supported OS. 

Software Advice’s findings are consistent with findings from VDC’s research, which shows that companies with fewer than 50 employees account for less than 20% of respondents with hardware and software deployments in field service settings. Frequently, the greatest barriers to entry are budgetary, as findings from a VDC end-user survey revealed that budget remains the top obstacle to implementing mobile solutions, particularly in smaller companies.

Organizations that do implement mobile solutions, though, are looking for operational gains from their workforce. VDC’s data shows that the single-greatest metric for measuring mobility solutions in field service applications is improved worker productivity, followed by improved worker communication and collaboration – findings that are consistent with Software Advice’s data, which shows that the top reason for purchasing software is to increase organization and efficiency. As a result, it does not come as a surprise that the top applications supported among VDC respondents include dispatch management and scheduling, asset management, maintenance & repair, and field sales, although there is a growing trend among respondents to flesh out the applications supported to improve customer loyalty and enhance their competitive differentiation.

As VDC has noted in previous reports, the key for vendors looking to continue the mobilization trend within field services will be in providing tactical rather than strategic support for potential clients.  Software Advice’s findings that an overwhelming majority (97%) of respondents wants an integrate suite to manage their business needs are in tune with the belief that SAP Bill McDermott underscored at this year’s SAP SapphireNOW: “In the end, the suite always wins. Always has. Always will.” We agree and see evidence of this in the M&A activity occurring within the mobile ecosystem.  However, while mobile enablement initiatives are underway in this industry vertical and others, there still is quite a way to go in terms of implementing the appropriate infrastructure and software for true mobile enablement for SMEs. 

Smaller Mobile Form Factors on the Rise for Line-of-Business Workers

The market is there, but headwinds remain

VDC Research has released its annual enterprise mobility report for smartphones and handheld devices, showing  that  the use of mobile devices to support line-of-business workers across numerous sectors continues to grow as organizations benefit from an increasingly connected and productive workforce. Industries continue to internalize the benefits of a mobilized workforce, as data from VDC shows an anticipated average increase of mobility-based budgets for 2014 of 10.6%. Smaller form factor devices – namely rugged handheld computers and smartphones – are among the most common devices being leveraged. VDC anticipates that a total of 3.3 million rugged handheld devices and 34 million smartphones will be deployed in 2014, growing the installed base to almost 70 million units.

However, increasing budget pressures and uncertainty in OS direction with rugged handheld devices are driving organizations to deploy greater numbers of smartphones for line-of-business applications. This trend has been aided by an expanding portfolio of third-party peripherals and accessories to bridge the gaps in data collection. The shift has been greatest in customer-facing industry verticals that are less centered on data collection and have fewer environmental requirements. This has primarily been the case in areas such as hospitality and retail, although there is interest in DSD and field services to adopt consumer devices and a growing desire to find a way to make BYOD work for frontline workers.

OEMs are evolving their designs

In response to the trend toward BYOD and enterprise-issued consumer devices, OEMs have evolved their product portfolio, taking design and user experience cues from their consumer counterparts. The rugged market, which traditionally has been divided primarily between data collection-centric “brick-style” devices and more portable PDAs, has expanded to include the rugged smartphone – touch-centric devices with no physical keyboards running on Android, but with fully rugged environmental specifications. This sub-category of smartphones represents one of the fastest-growing categories of small form factor devices for enterprise mobility, and VDC forecasts that the market will reach $3.8B by 2018.

OS uncertainty remains the largest obstacle to growth

Refresh cycles, which have become extended in recent years, are beginning to return in force among tier-1 companies. In the Americas, Home Depot, UPS, and the USPS are leading the charge with upgrade cycles that remain firmly rooted with rugged devices. Other organizations are returning to rugged devices after having experimented with smartphones in a line-of-business setting, which will also help to boost figures. However, the greatest obstacle for rugged OEMs will be OS direction. The majority of rugged devices on the market feature Windows Mobile or Embedded platforms that are rapidly approaching end-of-life, and the transition to Windows Embedded Handheld 8 has proven to be far from smooth, with mixed support from the OEM community. This has provided an opportunity for Android to enter the rugged market, but the OS faces its own issues of enterprise support and security, leading to muted demand from end users. This has led to considerable hesitation, as end users aren’t fully comfortable. As a result, VDC is seeing companies taking more of a ‘wait and see’ approach while maintaining their installed base.

For more information on the report, click here

Now VMWare is thinking with Portals

 ... the opportunities to provision applications securely and on the fly is truly revolutionary and a possibility if VMware can integrate and evolve the technologies it has acquired.

Today marks the last day of VMWorld, VMware’s annual conference located in San Francisco. One of the key announcements came on Wednesday with the unveiling of the VMware Workspace Suite, which includes desktop virtualization, identity management, and app, device and data management. The package features many elements from its AirWatch acquisition, including Secure Content Locker and mobile management software. A central element to the package is the Workspace Portal, which enables mobile users to access Windows applications, cloud services and web apps from a single, centralized location.

Imitation as a source of flattery…or confusion

Many people are noting the similarities between its new product suite and that of Citrix, which bears the exact same name. Citrix has taken note and took the opportunity to release a blog of its own – Imitation is never as good as the original – claiming that “It is often said that imitation is the sincerest form of flattery. And after reviewing VMware’s new announcement of Workspace Suite, all I can say is that all of us at Citrix are extremely flattered,”  before enumerating a point-by-point comparison of the two products.

However, despite creating a seeming workspace doppelganger, VMware is also likely to see increasing competition from Dell, which launched its own desktop virtualization solution, vWorkspace. Originally known as Quest Software, it was acquired by Dell in 2012 and offers additional features like support for Linux VMs and EOP protocol.

The Mobile Cloud Era: “Desktops Re-imagined and Inspired by Mobility”

VMware is weaving together technologies that have the potential to upend traditional end user computing deployment environments. The company’s recent acquisitions (AirWatch, Desktone, and CloudVolumes) are demonstrative of the mobile cloud era that VMware sees us entering. VDC agrees, and we believe that we are in the early days of a coming disruption in IT service delivery and the way organizations provision and manage devices for their workforce. While the adoption of virtualization technologies like those from VMware is limited, the opportunities to provision applications both securely and on the fly is truly revolutionary and a realistic possibility ifVMware can integrate and evolve the technologies it has acquired. We see the opportunity for cost savings and the flexibility that VMware has the potential to offer giving the firm a notable opportunity moving forward. VMware’s vision of delivery innovation as a service – from the data center to the desktop and mobile applications –are now a possibility; time will tell if end users are ready for it.

(With Kathryn Nassberg, Analyst)

BlackBerry Looks to Voice Encryption to Retain Customers

BlackBerry's acquisition of Secusmart, a secure communications specialist, gives BlackBerry a fighting chance to hold onto its government customers.

Earlier this week, BlackBerry announced that its acquisition of privately held German firm Secusmart as part of its drive to become the handset OEM of choice for security-conscious clients in federal markets and in enterprise. While Secusmart's technology has powered BlackBerry's encrypted emails and texts, secure browsing and encrypted file system since 2009, BlackBerry will now integrate going forward through this acquisition Secusmart's Security Card technology. The solution is dependent on the usage of a micro-SD card which features a crypto-controller with a PKI coprocessor for authentication. An additional high-speed coprocessor encrypts voice and data communication using 128 bit AES. Considering BlackBerry’s shrinking device sales, the company must continue to innovate specifically on its platforms embedded security in order to remain relevant as a handset OEM.

Although BlackBerry's footprint in federal markets and in regulated environments is significant, when compared to the overall enterprise market opportunity, they are a niche market. However, what works in BlackBerry’s favor is the fact that companies in these market segments are as reliable as a vendor can hope for in terms of repeat business and year-over-year growth potential due to their reliance on mobile technologies. Indeed, BlackBerry's CEO John Chen sees "these markets as equating to half of IT spending in mobile technologies"; while this is a bit of an overstatement in our view, the opportunity is significant. Under Chen, the company has been very clear in its aim to reinforce BlackBerry as the best platform for secure communications in enterprise settings, and particularly in regulated industries. However, as has been well documented, BlackBerry continues to lose customers to EMM vendors like AirWatch, Good and MobileIron, who have all initiated marketing campaigns focused on painless switching to their respective platforms. While these campaigns in aggregate have had varying success, there is no question that there has been attrition. Although BlackBerry has “opened up” its platform and now allows competing EMM vendor to manage its devices, VDC saw this move as signaling that the company recognizes its position as the incumbent has waned and needed to move with the mobile ecosystem.

The acquisition of Secusmart does bring new high profile reference customer for BlackBerry to tout (in addition to President Barack Obama) with German Chancellor Angela Merkel who found herself the victim of a major security breach (click here, and here) when her iPhone was hacked this past November.

Encrypted Voice is a Super Competitive Market

Moving forward, BlackBerry’s Security will remain as the company’s key differentiator, and is why the company’s best shot for a turnaround rests on its ability to retain and grow its market share in the enterprise.  However, the market that the Secusmart acquisition signals that the company plans to participate in is a crowded one. Organizations such as Motorola Solutions whose bread and butter is in government and regulated markets have had competing products on the market for some time. Motorola Solutions AME2000 product provides end-to-end encrypted voice and data communications on public and private data networks. The solution targets public safety and federal markets which are core target markets for the company. AME200 also features sophisticated hardware-based encryption and key management via a proprietary microSD component of the solution (called CRYPTR micro), to support Federal Information Processing Standard (FIPS) 140-2 Level 3 and Full NSA Suite B Cipher Suites. Motorola isn’t the only vendor either: Silent Circle emerged earlier this year (whose “surveillance proof” Blackphone, started shipping just last month) which can encrypt voice calls, Boeing’s Black phone features an embedded “self destruct” security feature along with the ability to communicate via satellite transceivers for secure voice communications, and FreedomPop’s privacy phone (which runs on Samsung hardware) key feature is voice encryption, and it can even be purchased via Bitcoin for “anonymity”. Suffice it to say that the secure voice and messaging market has quickly become crowded. Not to mention that vendors such as Open Whisper Systems and Silent Circle offer apps (no hardware required) to bring encrypted voice capabilities to the Android and iOS platforms.

A Niche but Valuable Market

While the confidentiality of private telephone calls has come under attack, the need for voice encryption for enterprises and private individuals is not apparent. There is no question that our privacy is being threatened by increasingly sophisticated adversaries and that certain executives and government personnel that routinely engaging in the exchange of private information or who conduct sensitive business transactions from abroad may be targeted. Large global organization do face the challenge of securing a global network of branch offices, subsidiaries, partners and project teams around the world and having the confidence that sensitive information and trade secrets remain confidential is important but the overall market is limited in scope and remains firmly as a niche. Nevertheless, as BlackBerry’s enterprise presence is becoming increasingly relegated to federal and regulated environments, embracing its niche position is, in VDC’s view, the firm’s best option for long-term viability. Acquiring Secusmart could give BlackBerry the security boost it needs to retain its current customer base and provide meaningful differentiation.