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.

2016 Predictions Part II

Predictions for 2016 Part II

This is part II of a two part series of posts which provides the Enterprise Mobility and Connected Devices Team’s predictions for 2016.  The following predictions were written by:  David Krebs, Eric Klein, Cameron Roche, and Matthew Hopkins.  To contact the team, please e-mail us at [email protected]

Top 5 Growth Industries for Mobility in 2016

Companies in just about every industry have the opportunity to benefit from a mobile strategy that improves productivity and engagement. However, mobile penetration among industries varies significantly due to a number of factors including, regulatory drivers/inhibitors, security barriers, killer applications, competitive pressures, work force demographics, etc. Despite these drivers/inhibitors, VDC expects software and hardware mobile investments to increase in 2016 as companies adjust to a world that continues to move towards mobile computing. Specific impetuses and impediments to mobile investments by sector will undoubtedly dictate the pace of mobile adoption, but all companies will nonetheless feel pressure to expand their mobile initiatives. Whether employed to improve business processes or engage customers, mobility’s ability to provide employees and consumers with critical information just about anywhere will continue to transform the enterprise.

Modernization and mobility are disrupting just about every industry, but VDC believes that these five industries in particular will be among the greatest investors in mobile technology in 2016.

1. Following several years of heavy ecommerce investments Retailers are again shifting their focus back to in-store solutions and particularly in-store customer engagement. A key challenge for retailers as their digital and physical presences continue to meld is data and record management and creating centralized inventory and customer datasets. Another key theme for retailers will be around them optimizing the omni-channel initiatives especially addressing their increased delivery cost exposure. In addition, a key focus for retailers will be to create a consistent experience for their workers and customers across multiple platforms.
2. The postal/courier industry, spurred by ecommerce growth, will be expected to deliver a higher volume of packages and meet the growing delivery expectations of customers. To live up to these demands, organizations need robust mobile applications for engagement as well as comprehensive track and trace solutions that provide individuals with near real-time package information. 2016 will see continued modernization of legacy mobility solutions to address customer’s increasingly sophisticated requirements.
3. The healthcare segment has great potential for mobility because its workforce is inherently mobile. However, a general resistance to change within the industry as well as security and patient privacy concerns have provided some road blocks to greater mobile adoption. Nonetheless, many companies in the space have made significant investments to reach out to their customers and provide them with the tools to manage their accounts.
4. Hospitality companies have significant customer engagement needs and the age of information has transformed their business model and increased competition. Market disruptors such as Airbnb and travel websites like Orbitz leverage mobile and Internet platforms to compete with more traditional players in the space. This dynamic is pressuring the larger, traditional organizations to more strongly infuse mobility in their go-to-market strategy.
5. The Transportation industry, like the hospitality sector, has faced its fair share of market disruptors—Uber, Lyft,etc.—that are driving companies in the space towards mobility. In particular, mobile device use among employees in the space for GPS, logistics, and other application-based services has also proved effective in improving productivity. These dynamics should result in increased investments in 2016.

 

Microsoft Surface:  Some Serious Market Share Ahead

While Microsoft has traditionally ruled the desktop space, challengers like Apple and other devices based on Android platforms have forced Microsoft to renew their efforts in other hardware sectors.  Looking at mobile devices, Microsoft has brought their line of Surface products to the market.  Using the Surface Pro 3 and 4 for their current flagship tablets, Microsoft has been able to successfully redefine a market domain which for years was dominated by high-cost high-performance iPads and lower-cost Android devices. The recently released Surface Book has also seemingly hit a sweet spot boasting top-notch performance at a competitive price. While Tim Cook thinks it’s a “product that tries too hard…to be a tablet and notebook” while succeeding at neither, this also comes from the man who said that the iPad Pro would kill the PC. If that’s true, then he may need to keep his guard up as the Surface Book sold out within the first few days. Couple its popularity with the power of a laptop, the mobility of a tablet, and generally better specs than a MacBook Pro, and Microsoft should see their Surface series of products more than double in market share from 8.9% to nearly 20% by 2020. With this kind of success, Microsoft will likely release a Surface Phone in the future. This Surface Phone would shoulder a heavy burden of possibly being the last true chance for a Windows powered phone to become a significant player in the smartphone space. Otherwise, Microsoft may need to investigate partnering their Windows 10 OS with other smartphone OEMs.

Android Makes a Significant Dent in the Rugged Handheld Market

Over the past decade, Windows CE and Windows Embedded Handheld (WEH) 6.5 have become the OS platforms of choice for the majority of enterprise (rugged) mobile devices contributing to an installed base of well over 15 million devices. The platform has offered its enterprise customers a broad portfolio of devices to select from; as well as strong development tools, a stable developer community and wide support among enterprise mobility-focused ISVs. In addition, with support from Microsoft for 10 years, enterprise customers received the stability critical to their enterprise mobility investments. However, as of January 2015, WEH 6.5 is completely off Microsoft mainstream support with only security patches provided until 2020 when it fully reaches its end of support lifecycle.  Microsoft’s answer to the next generation platform for rugged handheld devices is Windows Embedded Handheld 8.1. The platform has been adopted by a small number of OEMs, however, the devices available supporting this platform today is limited as is their functionality. Moreover, support for WEH 8.1 is expected to expire by 2019. More recently Microsoft has shifted focus towards Windows Mobile 10 (or Windows 10 IoT for Mobile Devices) for this category of devices. This version was beset by many delays with OEMs now estimating product availability by mid 2016. However, Microsoft is expected to more tightly control the specs for devices running Windows 10 eliminating options such as wearable form factors or handheld computers with hard keyboards.

This has opened the door for alternative OS options to fill this void with Android emerging as the primary candidate. Enterprise (rugged) mobile OEMs have been investing in Android solutions over the past several years with shipment volumes beginning to reach critical mass in 2015. We expect this to continue in 2016 with Android supplanting Microsoft as the leading platform for enterprise handheld devices.

2016 Predictions

Predictions for 2016 Part I

This is part I of a two part series of posts which provides the Enterprise Mobility and Connected Devices Team’s predictions for 2016.  The following predictions were written by:  David Krebs, Eric Klein, Cameron Roche, and Matthew Hopkins.  To contact the team, please e-mail us at [email protected]

Point: Microsoft Progresses towards Gaining Critical Mass in Mobile

Microsoft’s Windows operating system currently accounts for less than five percent of the smartphone market despite many efforts—most notably its acquisition of Nokia—to revitalize its mobile portfolio. However, 2016 will mark the first full year of Windows 10. This new operating system enables applications to work across all Microsoft devices; thus countering an argument that critical mobile mass is necessary for robust application development. The Windows Continuum allows developers to develop for all devices in the Microsoft ecosystem, thus ensuring an extensive marketplace of enterprise and consumer apps. Moreover, smartphones have largely become commoditized, and with differentiation fading, Microsoft has a new opportunity to enter a static market with new, sophisticated, and affordable mobile devices. A window of opportunity is opening for Microsoft in the mobile space as the previous barriers to success are fast eroding. Microsoft should gain market share because Windows 10 creates a stronger “mobile” developer community that will design applications for sophisticated devices in various form factors that meet the needs of consumers and enterprises alike. Moreover, the novelty of Apple products is declining while their price remains the same, and the gap between high-end and low-end phones continues to blur. From an enterprise mobility perspective, in segments such as retail, we are witnessing a strong desire to create consistent experiences – from POS to clienteling – and the Windows 10 Continuum value proposition aligns well with those requirements. These dynamics present Microsoft with a unique opportunity in 2016.

Counterpoint: Mobile OS is No Longer Strategic to Microsoft

Yes, it is hard to consider something strategic that is teetering at 1-2% market share globally. However, following Steve Ballmer’s bombastic “My way or the highway” approach to conquering the mobile market, one of Satya Nadella’s greatest accomplishments during his still young tenure at the helm of Microsoft is recognizing that Microsoft can be successful and have a lot to offer to mobile users even though it does not dominate the underlying OS. This OS and hardware agnostic approach has seen Microsoft enable and optimize its core services – from Office to Skpe – to work on Android and iOS, the two clear mobile OS leaders. Not to mention that Microsoft makes $2 billion in royalty payments from Android OEMs. Yes, Microsoft would still love to see its mobile OS share grow and, yes, Windows 10 does offer unique differentiation with Continuum. However, outside diehard Microsoft supporters and those curious enough to make the switch, it is unlikely that adoption will be sufficient to propel Microsoft market share to double digits.

Enhanced Privacy:  A BlackBerry Resurgence?

In the wake of the 2015 expansion of ISIS, hardware and software companies were pressured by governments to reduce encryptions or create back-end ways for monitoring potentially dangerous activity. The hardware and software communities will continue to push against these requests as their own quest for secure data continues in light of hacks and breaches. Expect to see more complex encryption techniques from software, mobile payment, and app creators. Additionally, expect to see hardware vendors leverage advanced biometrics. With the introduction of iris scanning into consumer-grade cell phones (e.g. Microsoft Lumia 950); look for further penetration of iris technology. Also, with fingerprint scanning penetrating both high and mid range consumer-grade devices, some rugged or semi-rugged devices may also see enhanced biometrics in 2016. Finally, the focus on privacy and security may also provide BlackBerry’s hardware endeavors with another chance at life.  The relatively positive reception of the BlackBerry Priv and rumors about a modernized design on their next smartphone are indicators that 2016 will provide BlackBerry with an opportunity for success not only in software, but also in hardware.

Graduating From BYOD and Basic MDM…Resetting Enterprise Mobility Expectations

2016 will be pivotal year for the technology industry writ large. Mobile and cloud computing will continue to disrupt how IT services are provisioned, as both personal and corporate computing continues to migrate to mobile platforms. However, how strategic is mobility really to today’s workforce and is the opportunity appropriately aligned with IT vendor’s initiatives? When it comes to customer engagement in segments such as retail then, absolutely, mobility initiatives or digital transformation (or whichever buzzword is currently trendy) are strategic and represent critical competitive initiatives. However, what about today’s workforce? Our research suggests that the workforce is increasingly mobile – estimated at approximately one third of the workforce or 1.4 billion workers. And, yes, the adoption/penetration of sophisticated mobile devices continues to scale – in 2015 global shipments of smartphones and tablets reached 1.6B units. However, when looking at how enterprises are truly leveraging these mobile devices to support or enhance mobile workflows the reality is that we are barely out of the starting gates. Outside of task or line workers such as warehouse workers, delivery drivers, retail associates, service technicians who rely on mobile solutions to support very specific and critical workflows, this opportunity has had a very slow burn rate. In fact, VDC’s research suggests that of the overall 1.6B smart device shipments in 2015, only 50M were deployed to support enterprise mobility workflows (this excludes the use of smart devices for email and basic productivity applications).

Yes, enterprise mobility is extremely challenging as is accurately conveying the ROI of many B2B opportunities. As a result we are seeing a shift among larger IT/technology powerhouses and their enterprise mobility initiatives. Standalone (enterprise) mobility practices will be a thing of the past as organizations realize the value of mobile as an enabling technology of a broader initiative (hello, Digital Transformation) rather than a standalone solution. This will represent a huge challenge for some of the pure-plays especially as some mobile capabilities – MDM representing the obvious example – become commoditized to the point that they are given away for free.

Event Recap – AirWatch Connect

Blending virtualization w/ EMM + some software defined security on the side

I had the opportunity to attend AirWatch's Connect event this past week in Atlanta, Georgia. The event was well attended and featured a nice mix of vendors on the show floor that ranged from small innovative mobile-first startups to industry heavies, such as AT&T, CDW, LG, F5, Sprint and Verizon.

As would be expected, AirWatch broke some news at its event:

Here's our takeaways:

Samsung: AirWatch announced an expanded reseller arrangement with Samsung—this is notable, as it shows that Knox is not dead (as some have declared). The two vendors may find opportunities to collaborate through Samsung's enterprise mobility services initiative, which continues to ramp and has a strong industry focus. This formalized partnership also shows that you can “have your cake, and eat it, too” (the company has also partnered w/ Google on its Android for Work program).

Mobile Security Alliance: AirWatch is demonstrating industry leadership via its Mobile Security Alliance; the firm had already had formalized partnerships with 9 of the 10 founding members (Proofpoint is the most recent vendor the company is partnering with). Each of the founding members (Appthority, Check Point, FireEye, Lookout, Palo Alto Networks, Pradeo, Proofpoint, Skycure, Veracode, Zimperium) is integrating more deeply via AirWatch's console and/or via AirWatch's device side agent (through APIs). The partners each bring very specific enterprise-grade security enhancements that are complementary to AirWatch's EMM value play. Alliance partners span three categories: device, application and network-focused protection.

ACE: AirWatch announced that the App Configuration for Enterprise (ACE) initiative that it is driving has grown to 44 members. Several notable vendors with innovative solutions around enterprise email (Nacho Cove), mobile application modernization (Star Mobile), and split billing (Movius) have joined the roster, but the addition of key SAP properties (Concur and SuccessFactors) were without question the most notable and important. Both of these applications are widely adopted and can now be seamlessly provisioned to AirWatch customers. It remains to be seen is ACE will propel the prepackaged application market—continuing to expand the ISV roster will certainly help.

Privacy First Initiative: AirWatch announced their Privacy First Initiative—the offering will help educate customers on privacy issues and provide end users with greater transparency on how their device (and applications) usage is being monitored. This is smart, and a capability that EMM vendors who compete with AirWatch possess. However, AirWatch is first to market with clear messaging and productized capabilities here. An example that was provided at the event was a scenario whereby IT wanted to ascertain an employee's location-going forward, this type of event can be fully audited/logged. More importantly, such events cannot be executed without informing the end user (policies are in place to information other LOBs, such as HR as well). The privacy feature will be available via AirWatch's console in Q4.

Platform Evolution: Supporting Windows 10 is a requirement; Microsoft's APIs have made it relatively simple to integrate with their Azure Active Directory product, which can streamline self-service device enrollment. AirWatch (along w/ competing EMM vendors) can also offer bulk provisioning for Windows 10 devices and support Win32 and Universal apps straight away. The company's integration also includes device management policies for native email configuration, per-app VPN connectivity and enforcement of enhanced security functions.

On the Same Page—Integration on Track. Still Plenty of Runway Left for EMM Vendors

In speaking with both VMware and AirWatch executives, it is clear that the companies are on the same page in their messaging—products such as NSX (more on this below) also show forward progress on integration. I also made sure to engage with several of AirWatch's prominent customers at the event—I was somewhat surprised by the slow progress in adopting mobile applications by several of the company's largest customers; however, overall, I got the sense that initiatives to expand applications were underway—many customers mentioned that they were busy in migrating/modernizing their legacy applications for mobile platforms.

Recognition that Mobile is Just Another Endpoint—UEM Strategy Required

The influx of new devices will require IT departments to reconsider how they deliver critical IT services to their internal end users, as the lines between personal and mobile computing will continue to blur and the number of “non-Windows” endpoints continues to expand. Device diversity is now common in most organizations and makes implementing solutions that have the flexibility to streamline the management of all devices, ranging from the ruggedized device deployments that are common in distribution centers, warehouses, and factories to consumer-grade devices that are finding their way into every business. AirWatch’s move into unified endpoint management (UEM) earlier this year shows that the vendor has been preparing to support the increasingly diverse range of non-traditional endpoints (e.g., ATMs, kiosks, smart vending machines, parking meters, POS devices etc.—as every EMM should be), but this has also signaled that the market has matured. Going forward, EMM vendors like AirWatch will be competing directly with much larger vendors (e.g., Accelerite, IBM, LANdesk, and Microsoft) as they begin to pivot to next generation UEM vendors. This will be a fascinating transition. 

Gelsinger Brings Executive Gravitas

VMware's CEO Pat Gelsinger attended Connect for the first time, adding some VMware executive "heft" (even though Mr. Gelsinger is svelte ☺) to the keynotes. Gelsinger is clearly pleased with the AirWatch acquisition, and spoke at length about security: specifically on how VMware's virtualization orientation enabled enhanced "built-in" security opportunities. The need to enhance security, compliance, and auditing capabilities is required for most large customers, and is a key driver behind the company's foray into Identity Management and its Workspace Suite. VMware is placing a big bet (R&D and marketing $'s) on both of these initiatives.

VMware's Sanjay Poonen who heads the EUC division spoke about the company's "Switzerland Status"—its ability to work across the ecosystem and how its Workspace Suite solution could simplify application delivery (native, SaaS, Windows, or web apps) on any device with robust security. The Workspace Suite marries Horizon, VMware's Identity Management solution, with AirWatch's Content Locker and its ability to unify app delivery. VMware can also offer additional security options by combining their NSX solution (a network virtualization platform), which offers granular application level virtual network policy controls with AirWatch's per-app VPN capabilities. This brings an opportunity to virtualize data center components, using a software-defined approach, along with the potential to reduce hardware costs by decoupling compute, network and storage functions. The security benefit is the ability to restrict application access to specific segments within a network.

Kudos to AirWatch for drawing a critical mass of enterprise mobility—oriented vendors to Atlanta—the event's Expo felt like what CTIA's event's used to be.

Split-Billing Heating Up

A Growing Importance

Split-billing, the process by which mobile phone charges are divided based on certain criteria and paid separately by the employee and employer, is a capability that is increasingly attractive due to consumerization trends. Companies providing mobile solutions to employees face a growing challenge in identifying and separating corporate and personal use; this is especially difficult in a bring-your-own-device (BYOD) or corporate-owned, privately enabled (COPE) environment. The issue remains divisive, with some employers expecting employees to pay for all mobile use—both corporate and personal—while others have implemented stipends, corporate phone plans, or reimbursements for corporate use. All of these methods have evident drawbacks, often forcing either the employee or employer to pay a disproportionate amount of the mobile costs. This issue became even more relevant in August of 2014 when the California Court of Appeals decided in Colin Cochran v. Schwan’s Home Service, Inc. that if employees must use their cell phone for work-related calls, then they must be reimbursed a reasonable portion of their cell phone bill. Under this ruling, companies in California will need to implement a strategy for reimbursement if they have employees using mobile devices for business purposes; failure to do so could result in costly litigation.

While California Labor Code Section 2802 may be unique in its wording and differ from labor codes in other states (with the possible exception being Massachusetts), the ruling could set a precedent that will entail a more national focus. In this vein, VDC urges companies who are moving forward in implementing BYOD policies to develop defensible ways to reimburse their employees. Unfortunately, split-billing technology by and large does not adequately address the needs of companies; however, some vendors have made significant progress in developing solutions that will solve employer mobile billing headaches.

Solutions Remain Few and Far Between

VDC Research has identified seven key players in the split-billing space and analyzed their solutions to determine which vendors will likely have the most success going forward.

• AT&T: The company's attempts to develop a split-billing solution have come in fits and starts. While AT&T’s Toggle solution has continued to evolve along with the company’s AT&T Work platform, the company has yet to deliver a fully functional product (thus far).
• BlackBerry: The acquisition of Movirtu in 2014 gave BlackBerry the technology to develop its WorkLife solution which elegantly separates voice, SMS, and data. (Samsung is also participating in this market via its partnership with BlackBerry).
• Good Technology: By acquiring Macheen last October, Good has been able to quickly build a split billing solution that separates corporate app data usage from personal activity.
• Movius: The company’s CAFÉ (Communications Applications Framework Engine) platform enables service providers with a means of quickly deploying applications to complement their core functionality of enabling users to have separate personas and different phone numbers for voice, messaging, and data (Movius has partnered with virtualization specialist Cellrox for this capability).
• Mast Mobile: The company leverages Oracle’s billing and revenue management solution to provide a unique and comprehensive solution that allows an employer to implement split-billing for voice, messaging, and data. Founded in 2013, Mast is a young company and is quickly evolving its solution to include stronger enterprise-grade features.
• OpenPeak: The company recently secured a patent in January for its split-billing technology. The technology enables companies to pay separately for data used through secure or enterprise applications in a container. OpenPeak white-labels this technology to AT&T.
• Syntonic: Like Mast, Syntonic is also a young company (founded in 2013). The company’s DataFlex platform provides core split-billing and data usage analytics capabilities.

Foreseeable Change in the Near Future

As BYOD and COPE trends continue to grow and companies evolve their mobile initiatives and implement new applications, VDC expects demand for split-billing solutions to increase. Enterprises have struggled to catch up to mobile technology and have focused primarily on ensuring the security of their data and finding use cases for the technology both in terms of increasing consumer engagement and improving employee productivity. The issue of paying employees for their mobile phone use has been largely overlooked, with many companies hoping to avoid the conversation altogether. However, with California’s court decision setting a strong precedent, this period of blissful ignorance is quickly drawing to a close.

Unfortunately, the solutions available to companies to effectively identify and split personal and corporate mobile use remain slim and incomplete. This is due largely to the heterogeneous nature of mobile devices and their operating systems, as well as the need to work with both the organization and telecommunications providers. Consequently, vendors in this space have developed unique technologies that offer vastly different experiences and varying levels of split-billing competency.

The vendors, broadly categorized, fall into three categories: EMM providers, telecommunications providers, and split-billing-first providers. Firms that fall into the first two categories have largely either partnered with other companies with split-billing capabilities or acquired smaller firms with the technology to provide the solution. Predictably, split-billing-focused firms, while small, have had the most innovative solutions and have become acquisition targets for larger EMM and telecommunications providers looking to expand their offerings to compete with other firms who have developed the technology. VDC sees Mast Mobile and Movius as the best near-term targets for acquisition, given their comprehensive solutions, small size, and innovative technology. There is a broad range of vendors that that could fill the role of suitor, including Citrix, Microsoft, IBM, and VMware would all benefit by acquiring a split-billing solution as the capability would expand and complement these firms' mobile solution range. VDC expects rapid growth and consolidation in this small segment of the enterprise mobility market as companies look to further expand mobile initiatives while reigning in the costs.

VDC will take a deeper look at these trends in an upcoming VDC View. 

With Eric Klein and Kathryn Nassberg

 *Correction (8/10/15): This post was revised to note Movius' ability to provide split-billing services for data as well as voice and messaging. 

Recap: Qatalyst Global’s Managing BYOX & End User Mobility conference

Managing BYOX Event Recap

At Qatalyst Global’s Managing BYOX & End User Mobility conference, organizations such as PG&E, Fairfield University, and Aetna shared their experiences integrating mobile initiatives, while vendors including Apperian, Bluebox Security, Dilligent, IBM, and WorkSpot, explained how their mobile services could increase company productivity and efficiency. We had the opportunity to speak with several of the end users in attendance about their BYOx approaches — not surprisingly, most were still challenged by the complexities of implementing BYOx policies and proving the ROI of these initiatives. The Fairfield University’s CIO, Paige Francis gave a great presentation that illustrated how heavily mobile technology was relied on by her student body and how important it will be going forward to understand the expectations of future generations of workers and customers. Francis spoke at length about the difficulties of meeting student and employee technology needs in a campus environment and how Service Oriented Architecture concepts now applied to mobility (she described this as “Mobile Oriented Architecture”). We agree, as mobile devices and services will need to seamlessly interact with one another independently. 

End Users Know They Need to Deliver a Positive User Experience

Companies at the conference were at all different stages of their mobile journey exemplifying the differing pace of adoption. Some companies stood out, PG&E for example has developed and deployed a number of mobile applications to enhance field service operations as well as meet customer needs. Interestingly, the utilities industry, which had remained fairly stagnant in regards to technology over the past few years now stands positioned to develop rapidly as mobile and IoT technologies are incorporated to enhance business processes. Other industries such as health care have been keen to embrace mobile technologies, but issues surrounding contractual and regulatory obligations complicate initiatives. However, a major take away from the conference has to be that keeping it simple in both development and deployment is essential. Focusing on the end user — how the end user will use and experience the technology — can guide the process fairly completely, while financial constraints remain important considerations. As Steve Damadeo — the IT Ops Manager for Festo — explained, BYOD and mobile applications provide ample cost-saving opportunities as well as productivity gains if implemented with a focus on cost containment and user experience.

Privacy Considerations Important Going Forward

Providing a unique and outside perspective on the legal obstacles facing multinational corporations’ mobile plans was VDC Research’s own Eric Klein. His presentation touched on one of the many impediments to crafting an effective technology policy that incorporates mobile; from security and privacy concerns to regulatory and user experience issues. Achieving compliance with laws and regulations that are often archaic in relation to modern technology can be cumbersome. Case law as explained by my colleague Eric Klein has failed to keep up with technological development – particularly with regards to mobile technology. Baker & McKenzie’s data privacy and security expert Harry Valetk was in agreement, and spoke at length about this topic and echoed many of these sentiments. While it will take time, the case law will catch up, Valetk predicted that “regulators and courts will apply the laws as they are today regardless of if they more accurately regulate the technology of 20 years ago”.  

Note: This was a recap of the first day (7/15) of the 2-day event. 

 

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.

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

Event Recap ― SAP SAPPHIRE (Mobile Perspective)

2014 proved that SAP can play "in the cloud", but they still need to get their mobile house in order ...

S/4HANA's Big Roll out

To no one's surprise, this past week's SAPPHIRE conference was all about S/4HANA, the next-generation ERP suite that SAP launched this past February. The company's CEO Bill McDermott spoke with conviction about the importance of digitization and customer centricity, and made it clear that S/4HANA was going to deliver on the "simple promise" and help businesses become both data-driven and seamless.

S/4HANA is definitely a big deal, as it has a notably reduced footprint which will reduce complexity and simplify migration. But the speed of the platform is what will be the most appealing (3-7x the throughput and up to 1,800 times faster analytics, according to SAP). It remains to be seen how quickly the company will be able to capitalize from its robust and cloud-optimized business suite. SAP did a superb job this year in getting key prominent customers to participate on stage at SAPPHIRE — of course, the risk is that the spokesperson goes "off script" — this seemed to happen when Walmart's EVP and CIO Karenann Terrel proclaimed "I hope to see S4/HANA delivered in my lifetime ... it’s on my bucket list." Ouch. SAP needs to quickly prove that migration can be simple and beneficial. Progress is being made (the company revised its Q1 S/4HANA customer count to 400+ (from 370), but the bet on S/4HANA is so large, that the pace will need to increase quickly.

Google and Facebook

McDermott provided some new details on the future of his company's partnership with Google, saying that it will "make work easier for people". Google's Executive Chairman Eric Schmidt (via video) described it as "a great day", and explained how SAP software integration with Google for Work was a priority for the company. Schmidt went on to say: "What's great about this first step, with all the big customers that we jointly have, is that we are now able to show the power of web and mobile computing and the power of all that data and computation that SAP has been producing for years."

There were no real new details pertaining to the partnership with Facebook; however it is clear that the companies have been collaborating together since last summer. It appears as thought they have made progress by leveraging S/4HANA to enable businesses to build on-the-fly social media marketing promotions and target Facebook users with customized advertisements.

There were other notable announcements at the event, including a new CRM digital for customer engagement (DCE) application (initial 30-day free trial then $29/user/month), as well as some clear progress on the IoT front — however, the remainder of this post will focus on what we learned about the company's progress in augmenting its Mobile Secure product portfolio.

Rick is Running

SAP snagged a true mobility veteran in Rick Costanzo who has been running the company's global mobility BU for just over a year. Costanzo also is responsible for the company's Telco business (a recent reorganization called for the two BUs to merge) — however, the reorg. along with the departure of several key mobile executives, raised some eyebrows. After meeting with several key mobility executives (including Rick Costanzo), the party line was that the BUs were not only similar in size, but were better together. Could be. But, SAP needs the newly consolidated Telco and Mobility business units to enhance its delivery scale, increase agility, generate portfolio synergy and improve profitability. This is precisely what seems to be in the works, with a realigned go-to-market strategy, and a dedicated enterprise mobility sales organization. This is good progress considering Costanzo's short tenure. 

Mobile Secure, Apps and Key Partners

SAP is hinting at further integration of its development platform (SMP) with its Mobile Secure solution — this makes sense, and seems to be direction that others are moving in as well. The company also announced partnerships with Innovapptive and Sitrion to complement its custom mobile app platform; both offer prepackaged mobile apps and leverage S/4HANA's mobile services. SAP continues to benefit from its partnership with Mocana, and alluded to new synergistic partners that will likely be revealed in Q3. SAP continues to de-emphasize its Afaria brand (smart), and is leading with the right messaging: security. However, differentiation is becoming increasingly difficult for all enterprise mobility vendors — in this vein, SAP should be more aggressive with showing its customers that has been successful in unifying its disparate development platforms (SUP, Syclo, Mobilizer) and showcase its content and application management capabilities.

One last take away — key SAP mobility executives seem to be working well with key ecosystem partners such as Apple, Google, and Microsoft. In my view, the company's customer footprint in the enterprise is more valuable than it realizes; this puts SAP in a excellent negotiating position with these larger and highly sought after partners.

Off to Citrix Synergy!

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MobileIron's Miss

"Standing Alone" increasingly challenging for mobile-first EMM ISVs

Larry Dignan's article over at ZDNet this past week was a shot across the bow for the EMM market. In case you missed it, MobileIron announced that their CFO was departing, and issued a profit warning in their pre-announcement of their Q1 earnings (the company's Q1 earning call is scheduled for this Thursday). In their pre-announcement, MobileIron said that its Q1 non-GAAP revenue will be between $32M-$33M (down from its previous outlook of $34M-$37M). Gross billings (between $35.5M-$37M) were also lower than the $40M-$42M that they had expected. MobileIron's CEO Bob Tinker attributed the miss to several large deals not closing in Q1. Tinker also argued that the company's customers were moving toward monthly subscriptions and that the trend was cutting into revenue (reasonable).

What MOBL's Miss Means for the Broader Market

The EMM space is the most visible of the "segments" of the enterprise mobility ecosystem: not only have there been notable acquisitions (AirWatch, BoxTone, Fiberlink, and Zenprise), but participating vendors have demonstrated that they can win large deals, and attract key partners in the channel. However, being one of the two (Tangoe is the other) public "pure-play" mobile-first EMM ISVs is a challenge, as every move is "under the microscope". While EMM vendors are enjoying success in the market, the market is shifting beneath their feet. "Standing alone" as several prominent vendors currently are (e.g., Globo, Good Technology, MobileIron and SOTI) will be increasingly challenging moving forward as global channel expansion and substantial R&D investments that ensure continual product enhancements will be required — not to mention the growing footprint of large and established vendors who have recently entered / plan to enter this market (e.g., Accelerite, CA, Dell, Microsoft, and Oracle).

Pivot!

I wrote about the "EMM Pivot" I was expecting this past March — and recent discussions I’ve had with several prominent EMM vendors has revealed an interesting approach on how they intend to evolve and differentiate their platforms moving forward. Key initiatives that are in development and on most road maps include:

• Split billing
• Unified Endpoint Management
• Enhanced email clients
• Secure Messaging
• IoT and Wearable Strategies      
• Architecture enhancements (moving away from "rack and stack")
• UX / Console optimization

If you participate in this market, I'm still taking briefings to discuss the evolution of EMM and the pivot that I anticipate.

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