VDC Research: Enterprise & Government Mobility Market Blog

A Smarter Election in 2016

Last night, the citizens of Iowa kicked off the presidential nomination process by coming out in record numbers to participate in the quirky, uniquely American Iowa Caucus. The event’s complicated voting process, with Republicans using a secret ballot and Democrats showing their support for candidates based on their location in the room, has resulted in a number of vote counting and reporting errors over the course of its history. Most recently, in 2012, Mitt Romney was declared the initial winner when in fact Rick Santorum had won by a mere 34 votes; a finding that took two weeks to determine and release publicly. This error afforded Romney a host of political benefits, including increased publicity and access to funding that he might not have otherwise received. Perhaps more vexing, however, was the fact that votes from eight of the state’s 1,774 precincts were lost in the process. While a small proportion of the total number of votes cast, this incident generated concern among many participants, causing them to question the legitimacy of the political process, in which all voters expect to have an equal voice.

Elections, if only due to their colossal size, are difficult to measure. The Florida recount during the 2000 presidential election exemplifies the issues associated with vote counting and the often unsuccessful implementation of technology to remedy a centuries old process. Moreover, technology in the election process is often accompanied by great skepticism, and blunders are not uncommon—see Mitt Romney’s 2012 ORCA program failure. As a result, it was not surprising to learn that Microsoft had developed and deployed a mobile application to count 2016 Iowa Caucus votes and streamline the process of distributing this information to party officials.

Modernizing the Voting Process

Microsoft in collaboration with its partner, InterKnowlogy, developed two mobile applications (one for Democrats and one for Republicans) that enable fail-safe data entry into its Azure cloud system; thus, providing timely and accurate results to party leaders, the media, and the public. While very simple applications, they nonetheless helped modernize a process previously reliant on pen, paper, and landline telephones. Furthermore, to enhance security, Microsoft built two-factor authentication into the application; a feature important for ensuring only privileged Caucus workers had access to the system.

Image: Microsoft

Likely a public relations opportunity for Microsoft (the company offered its software for free), the process went smoothly despite some extremely close contests that could have caused a vote counting and reporting error in previous caucuses. This outcome, not only highlighted Microsoft technology, but also illustrated the transformative nature of mobile technology. While Microsoft and the political parties do not at this time intend to use the applications for other upcoming caucuses and primaries, the precedent has nevertheless been established.

The use of mobile technologies in the voting process remains limited, with traditional data collection (pen and paper) and information distribution (mail) processes the norm. As a result, attempts to improve the accuracy and speed of the process should spur mobile technology adoption over the course of the electoral season. For even Clinton’s and Sanders’s campaign created their own Caucus applications to track the outcomes throughout the course of the night in an attempt to fact-check the process.

Campaigning in the age of Mobility

Candidates for political office have understood the importance of technology for some time, with Obama successfully employing analytics and social media tools to win the 2008 presidential election. Since that time, mobile technologies have evolved substantially and the American populous’ use of these devices has similarly increased. As a result, candidates over the course of this election season will leverage these technologies even more as they attempt to systematically target potential voters and craft political messages.

Microsoft may have not made money on the Iowa Caucus deal, but many technology companies are positioned to benefit this year from billions of dollars of spending on political advertisements. A large portion of which will go to Google and Facebook, given their substantial user bases and advanced targeting capabilities. The advertisements and the platforms they run on are important, but success will largely depend on a campaign’s ability to leverage big data pertaining to potential voters. Utilizing advanced analytics, campaigns will refine their messages and targeting to have the greatest impact.

Digital and technical expertise differs significantly by party, as exemplified by the notable adeptness of the Obama campaigns in 2008 and 2012. Republicans, acknowledging the importance of leveraging data and digital platforms, have invested heavily in these areas as of late—either building in-house capabilities or hiring digital companies, such as Targeted Victory and Harris Media. Nonetheless, Democrats still possess greater resources in these areas and have stronger ties to Silicon Valley. In particular, Hillary Clinton’s chief technology officer Stephanie Hannon, a director of product management for civic innovation and social impact at Google, brings unmatched technical experience and knowledge to the campaign trail.    

An Evolving Political Future

Mobile technology, as a tool for advertising and voter engagement, will reach record heights this year as candidates attempt to accurately target and mobilize their voter bases. Mobile is fast becoming the most effective medium for reaching target audiences, and politicians like companies continue to shift their resources towards this channel. More interesting, however, is the use of mobile technology to support electoral processes as in the case of the Iowa Caucus. Mobile devices and applications support mission-critical workflows in a number of industries from healthcare to public safety, but the political process has largely remained outside the influence of these technologies. In this way, Microsoft set a precedent that will likely serve as an impetus for further modernization. However, it will be the people, ultimately, who will need to decide the extent to which technology will be allowed to influence the electoral process.

Written by Matthew Hopkins.  For more information, contact us at [email protected].  The author can be contacted directly at [email protected].

FirstNet RFP Marks Move to Modern Public Safety System

On Wednesday, the First Responder Network Authority (FirstNet) released a much anticipated request for proposals (RFP) for the nationwide public safety LTE network. The Indefinite Delivery/Indefinite Quantity contract with a limit of $100 billion for a performance period of 25 years marks what FirstNet’s Chief Executive Officer Mike Poth describes as a “first of its kind public-private partnership”.  Proposals for the project are due by April 29^th and many telecommunications carriers will likely enter the competition, which could prove profitable as any of the unused 20 MHz of 700MHz broadband spectrum will be left under the operator’s control. Moreover, the RFP highlights 16 key objectives requiring additional investments in a number of other auxiliary technologies to ensure network functionality.

Following the lead of other nations (United Kingdom and South Korea), the RFP is a crucial first step in the process of shepherding the American public safety system to modernity in an age of mobility and information. Over time, by increasing interoperable communications among first-responders and providing improved situational awareness with multimedia data, the network will inevitably revolutionize the way first-responders complete business processes and interact with one another and their communities. Moreover, FirstNet enables public safety workers to employ some of the very same technologies in the workplace that they are so comfortable with in their personal lives. In this way, the project is more than the development of infrastructure to support first-responder LTE use; with the RFP outlining the need to ensure user adoption, create a device and application ecosystem, and guarantee security among other objectives. For only with these tangential developments will the system work both technically and fundamentally to improve the effectiveness of first-responders and the lives of those they serve.

The success of the network ultimately depends on user-adoption, for a network without users, will be as effective as the current system albeit at a greater cost. To this end, devices operating on the network should meet industry work standards as well as ease-of-use expectations.  In particular, the RFP states that mobile devices should be “capable of gloved, one-handed, or hands-free operation as well as…multimedia and high-definition data transmission both from humans and machine-based sensors”. Fortunately, several mobile device and public safety equipment manufacturers—Sonim, Kyocera, Motorola, etc.—have developed Band-14 devices that live up to these requirements. Capable of dealing with rough work-conditions characteristic of the public safety industry, these devices also boast many of the features prevalent on consumer devices, thus reducing the learning curve often associated with custom-built rugged devices. In essence, FirstNet looks to improve the functionality and integrate further, a piece of equipment already deemed critical by many first-responders. Often used unofficially for acquiring contextual information, communicating with co-workers, or accessing organizational email, smartphones on a dedicated first-responder network are more likely to be integrated with back-end information systems and other personal safety equipment; thus increasing the productivity and effectiveness of a largely mobile workforce. 

As important, if not more important than a device ecosystem, a vibrant application ecosystem supplies the tools for modernizing workflows and providing first-responders with information fundamental to quick and appropriate decision-making. In particular, the RFP calls for the development of a “vibrant third-party applications developer community” and application store that will generate an “evolving portfolio of mobile and enterprise applications, as well as cloud services”. APCO International, the world’s largest public safety professional organization, understanding the importance of public safety mobile applications, created Appcomm.org in 2013. Initially listing 60 mobile applications dedicated to public safety, the site now provides access to over 200. First-responders can use these applications to improve their situational awareness, engage with the community, document evidence, and gain access to business-specific information in seconds. In this way, applications will undoubtedly change the way first-responders complete business processes by brokering access to important contextual information and enabling greater autonomy. Large and small software vendors alike have devoted resources to creating applications that address the unique needs of first-responders and encourage end-user adoption.

FirstNet’s RFP is intimidating with over 500 pages and 13 sections. This is indicative of the enormous scope of the LTE network project. With many individual moving parts vital to the success of the overall network, a strong and open relationship between U.S. agencies and the private sector is crucial. A number of early adopters—New Jersey, New Mexico, LA-RICS, Harris County—have provided test-cases for the large scale deployment that remains several years away. These experimental deployments should help develop guidelines and use-cases for how to best take advantage of the capabilities engendered in a dedicated first-responder LTE network. Moreover, the experiences of these communities should help mitigate obstacles such as balancing mobile security with usability. The network and the mobile devices on it will need strong security to protect the sensitive information housed on public safety networks. However, these security measures should be designed in a way that does not deter user-adoption or effectiveness. FirstNet will not be a panacea for all of the industry’s technical woes but rather is a stepping stone on the path to modernization; a path that will necessitate all communities buy into the benefits of mobility.

Written by Matthew Hopkins.  For more information, be sure to review our forthcoming Public Safety View discussing FirstNet developments, set to be released next month (February), or contact us at [email protected].  The author can be contacted directly at [email protected].

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.

Warfare in the Age of Information and Mobility

In an upcoming military and defense report, VDC will examine the unique security, application, and hardware requirements for mobile devices employed among military users.

The phrase “fog of war” describes the general state of uncertainty surrounding military operations, and has been referenced frequently in military literature for over a century. Equipped with less than perfect information, military leaders use their best judgment and the little information they have to make decisions in the theatre of war. Generally, these gaps in knowledge, or situational awareness, occur on both sides of the battlefield, essentially offsetting one another. However, if one side does possess superior information, even in the slightest, then it could tip the scales of war. This logic largely supports the network-centric warfare doctrine, which argues that communication, computer, and IoT systems provide an operational and strategic advantage in war. More generally, a military receives a competitive advantage when they have the ability to collect, analyze, communicate, and act on information in a synchronized manner.  

Abiding by the principles of network-centric warfare, militaries have researched, developed, and implemented a growing arsenal of information and communications technologies. The United States, the largest military spender, maintains a diminishing global lead in technological superiority. This lead is largely owed to astronomical spending and access to some of the most cutting-edge technology coming out of Silicon Valley and other high-tech geographical clusters located within the nation. Private sector companies have played, and will continue to play, an important role in developing products for command, control, communications, computers, and intelligence (C4I) solutions. Procurement of commercial off-the-shelf-technology (COTS) has increased over the past decade owing largely to the private sector’s improved technical competency and the decrease of Western military budgets. Notably, this reduction in the West contrasts increased military expenditures in the Asia Pacific and Middle East regions.

The investments in C4I technology include hardware, software, and networks; the three components interact with one another to produce insights and an operating picture necessary for informed decision-making. Crucial to ensuring this integration and interaction are mobile devices and applications, which provide soldiers and support-employees with the tools to distribute and act on information. In the most basic sense, these devices act as receptacles for mobile applications that serve as the gateway to data often stored behind organization firewalls. Tablets and smartphones now possess powerful computing capabilities in a mobile format, thus ensuring access to information anywhere and at anytime (assuming an available network is present). This value proposition has encouraged defense organizations to implement mobile devices in the field as well as in-and-outside the office. Imposed requirements such as general-use guidelines and enhanced security features including device management software and encryption help to reduce risks associated with mobility and are representative of a “secure enough” approach taken by many military organizations. This is the most feasible approach since completely impenetrable mobile devices are the stuff of science-fiction. The measures employed as part of this  approach increase security while maintaining functionality, and most agree that the gains of greater information distribution offset minimized security risks.

The Department of Defense’s mobile policy abides by these guidelines and includes an application store, which grants employees access to productivity enhancing, commercially available applications as well as line of business applications that enable business processes and access to organization data. Security measures differ based on whether an employee resides on the classified or unclassified network, but in general, the DoD acknowledges the trade-off between security and usability and has increased the footprint of devices under management to include popular consumer devices such as iPhones and Samsung Galaxy smartphones. While this type of enterprise-use is fairly common throughout the private-sector albeit with greater security measures, the field use-cases for mobile devices are certainly unique.

The U.S. Army’s Nett Warrior system uses consumer-grade Android smartphones to arm individual soldiers with enhanced situational awareness and communication capabilities on the battlefield. This use-case falls directly in line with the network-centric warfare doctrine since it facilitates informed decision-making in an arena in which judgments must be made quickly and frequently involve life and death decisions. Operating on radio networks, these devices provide details on friendly as well as enemy troop locations, and allow soldiers to send text communications to one another. Perhaps most importantly, this system serves as a platform on which more applications can be built; increasing the capabilities of soldiers and improving their effectiveness in the field while reducing risks associated with uninformed decision-making. As tactical radio networks evolve and mobile device technology becomes more powerful, soldiers will essentially have access mini computers in the field. Therefore, this device will not only improve communications with command and control and among soldiers, but will also serve as an interface for data garnered from numerous sensors on the battlefield and satellites in the sky.

Militaries face a number of obstacles—budgets, fragmentation, and legacy technologies—that inhibit their use of modern technologies. Nonetheless, these organizations have made great strides in incorporating mobility within the past few years alone. The idea of equipping individual soldiers with consumer-grade mobile devices in the field for communications and situational awareness would have seemed ludicrous to many only a few years ago; yet Nett Warrior now embodies these ideas. VDC expects “lowest price technologically acceptable” acquisitions to increase the competitiveness of commercial vendors and even consumer-grade products in some instances. Only time will tell whether these devices are suitable for military use-cases as insights into failure rates in mission-critical environments are currently unavailable. While policies and requirements for mobile devices will undoubtedly change to reflect evolving technologies and use-cases, the increasing role of mobile devices in this space is inevitable. Military leaders view information as a transformative tool on and off the battlefield, and mobility is a crucial component for transmitting and accessing this resource.

Written by Matthew Hopkins and David Krebs.  For more information, be sure to review our forthcoming full military/defense report, set to be released next month (January), or contact us at [email protected].  The author can be contacted directly at [email protected].

The Postal-Courier Industry’s Looming Technological Challenge

The postal-courier industry, in the midst of market changes, will need to grapple with a significant technological challenge looming on the horizon. The delivery of goods is an expensive proposition that requires significant capital investments and a large supply of labor. Technology, in the form of handheld devices and delivery software, works to create an efficient process that enables companies to minimize costs and maximize revenues. The handhelds used by delivery personnel include a number of important capabilities—bar code scanning, messaging, GPS—that help facilitate workflows. From enabling track and trace to obtaining proof of delivery, the current use-cases for these devices are plentiful. As the expectations of consumers grow and their desire for greater personalization increases; postal-courier organizations will need to heavily rely on these devices to transfer real-time data between all parties involved in a transaction. Moreover, postal-courier organizations attempting to expand their service offerings to offset declining mail volumes and differentiate themselves from the competition will employ handheld devices and new applications to complete additional business processes. To this end, upgrading to a new, more modern operating system helps organizations expand into auxiliary, customer-facing services.

Today’s Operating System

While several postal-courier organizations have chosen smartphones as their delivery device, the vast majority have opted for ruggedized enterprise mobile computers. Over 80% of these devices run on legacy Windows Embedded CE and Windows Mobile 6.x platforms. These legacy systems are particularly well-suited for enterprise devices and applications due to their customizable nature and strong ecosystems of solution providers developing applications. Moreover, comprehensive lifecycle support from Microsoft and OEM partners provides further value-add for these platforms. However, Microsoft ended meaningful support for Windows Mobile 6.x in January 2015, and support for Embedded CE will end shortly; with Microsoft only providing security patches for the platforms through 2020. As a result, over the course of the next few years, postal courier organizations will need to transition to a new operating system. 

 

In theory, the logical next step would be to transition to the most recent iteration of Windows without needing to implement any serious changes. However, the situation is far more complicated than that; leaving many organizations debating their next steps.

The Path Forward

With the deadline of 2020 fast approaching, companies must begin evaluating their options regarding hardware, operating system, and software. In choosing an OS for next generation enterprise handheld devices, the decision comes down largely to the consumer heavyweight, Android, or the enterprise incumbent, Microsoft. However, with Microsoft having failed to deliver a desirable operating since the release of Windows Embedded Handheld 6.5 in 2011; some in the industry have moved to the Android operating system with its modern features and capabilities.

Android does not represent a perfect solution. Designed for the consumer space, the operating system lacks many of the security and management features of Windows as well as the substantial base of enterprise developers and OEMs supporting it. Nonetheless, Android’s enterprise user-base has grown steadily over the past few years, coinciding with improvements in the OS’s enterprise functionality. All leading rugged OEMs now offer an Android option, and several view this operating system as the way forward for the industry. Moreover, many ISVs that previously supported legacy Windows systems have shifted their R&D focus to Android (and iOS). This growing portfolio of Android devices and enterprise applications serves as justification for many to switch to this OS in light of Microsoft offering no suitable alternative.

Microsoft’s hopes to regain its market share, or at the very least stop the flow of users away from Windows, lie with its new OS for enterprise handheld devices—Windows 10 IoT Core. Postal-courier organizations, specifically those in the United States, have a pent up demand for a Windows solution, albeit having been burned by Microsoft in the past. Failing to deliver a Windows 7 solution and releasing an unsuitable solution in Windows 8; confidence among those in the space is waning. Windows 10, with its cross-device functionality and enterprise features could meet this demand. However, the release continues to be delayed, incentivizing those in need of a more immediate upgrade to switch to Android. Continued delays, or the release of an incomplete product, would further spur Android adoption, essentially sealing Microsoft’s fate in the rugged enterprise space.

What about the Apps?

Devices and operating systems play an important role in the completion of business processes, but applications/software are the last piece of the puzzle. Most organizations either develop their applications internally or outsource the process, but either way, the finished applications provide the key to performing tasks in the field. Unfortunately, postal-courier organizations planning an OS transition will also need an application-transition plan. For regardless of OS choice, organizations will need to recode old applications or develop new ones.

Windows 8 and 10 are not backwards compatible with legacy Windows systems, and a move to Android or iOS will similarly require recoding. This process, in most cases, will be expensive and cumbersome. If the company has the technological resources, they may complete the project in-house; however, most organizations will likely need to outsource at least some of the project. There are a number of tools on the market, such as Xamarin or iFactr, which enable cross platform development, and essentially provide organizations with a bridge to their next OS. Microsoft is also providing hooks from Visual Studio (VS) to the Xamarin platform making it easier to leverage existing .NET and C# skillsets to support development on Android or iOS. Moreover, we expect many in the industry to use this period as an opportunity to modernize applications that have been in service for decades.

The Bottom Line

Handheld devices play an instrumental role in the postal courier market now and moving forward. The next few years mark a period of mass transition of the likes never seen in the postal courier industry, and the lack of leadership by Microsoft creates an environment of uncertainty. However, this period also marks a moment of opportunity for organizations to modernize their systems and applications. The path taken today will largely dictate the quality of enterprise mobility capabilities tomorrow.

Written by Matthew Hopkins and David Krebs.  For more information, be sure to review our forthcoming full postal-courier report, set to be released this month (November), or contact us at [email protected].  The author can be contacted directly at [email protected].

Hip to be Enterprise: New Enterprise Focused Tablets Stealing the Show

With the broader tablet market in the midst of an identity crisis one segment receiving increased attention are enterprise end users. VDC’s recently published 2015 Enterprise and Government Tablet analysis confirms this opportunity, forecasting annual growth of enterprise tablets – which represent approximately 15% of the overall tablet market – at 12.1% annually through 2019. A flurry of new products targeting the enterprise user from mega-brands Apple and Microsoft and specialty rugged mobile vendors Zebra and Xplore are directing the spotlight on this segment.

In comparison to other mobile form factors, tablets are an increasingly popular selection for enterprise line of business (LoB) applications. According to recent research conducted among enterprise mobility decision-makers, tablets are selected 33% of the time among devices issued to employees by enterprises in support of LoB applications. As the number of mobile deployments in LoB workflows continues to grow, consumer mobile devices are setting the benchmark for what any mobile device should look and feel like, resulting in the emergence of a new breed of enterprise tablets. Beyond enterprise-focused rugged OEMs, consumer-grade vendors are also turning their attention to the enterprise market through both their consumer portfolios and the introduction of more durable, enterprise-minded devices.

Enterprise Issued Mobile Devices Used to Support LoB Workflows by Form Factor

  

New Rugged Tablets from Zebra Technologies and Xplore Technologies

Zebra Technologies held its much anticipated Tablet Plus launch announcement on September 15 during which it unveiled the details of its new ET 50 and ET 55 tablet computers. As Zebra’s first new tablets to be released since the launch of the ET1 in 2011, notable features included support for both Windows 8.1 and Android Lollipop 5.1 in addition to Wi-Fi and/or LTE connectivity. Designed with a consumer feel and equipped for the enterprise, the tablets look to penetrate a still unsaturated enterprise tablet market. With a rugged design, comprehensive accessories to meet industry demands and unique scanning capabilities the ET 50 and ET 55 look to address a number of business use-cases, most notably those in the direct store delivery (DSD), field service, and retail verticals. However, a challenge for Zebra in our estimation will be aligning their tablets with the most appropriate use cases and target industries. Although tablets are being widely adopted in markets Zebra typically serves, these are mostly lower priced consumer devices. Demand for rugged tablets with the specifications and price points featured by Zebra’s new products is mostly concentrated in public safety, utilities, telecommunications and manufacturing environments, segments outside of Zebra’s traditional “sweetspot”. Another challenge, not uncommon in the rugged mobile market, will be the price points of the ET 50 and ET 55 which are $1,850 to $3,000, depending on the configuration. Although the benefits of rugged mobile devices are calculated by their lower failure rates, higher reliability and ultimately lower cost of ownership, even these target prices are high when compared to competitive rugged tablets.

Not to be outdone, Xplore Technologies unveiled the XSLATE B10, a fully rugged 10.1” tablet running Windows 8.1 (Windows 10 upgradeable), also on September 15th. The device is a fully featured tablet with multiple I/O and configuration options targeting field worker applications in transportation, manufacturing and telecommunications segments.  Xplore has undergone some significant changes in 2015, none more impactful than its acquisition of Motion Computing’s assets in April. According to VDC’s most recent rugged mobile research, boosted by the Motion acquisition and strong performance of its existing business, Xplore was the leading rugged tablet supplier in Q2 2015. Now with the target on their back Xplore will need to provide staying power and consistency in performance – especially surrounding support services for its increasingly global customer base – in order to build on its recent successes. 

   

Not the only new tablets in town

The Zebra and Xplore announcements comes on the heels of Apple’s release of the iPad Pro on September 9. The iPad Pro makes a stronger enterprise use-case argument as compared to Apple’s past consumer-focused tablets. Features including a large 12.9” display, the new A9X chip for increased speed and responsiveness and new iOS capabilities such as split screen viewing. In addition, accessories such as the new Apple Pencil and Smart Keyboard enable the device to more adequately serve end-users in corporate environments. Borrowing liberally from Microsoft’s playbook (which will be introducing the Surface Pro 4 in October), this device is Apple’s first foray into the rapidly growing 2-in-1 market. However, at the end of the day the iPad Pro is an iPad running iOS at a price point that makes it competitive with Apple’s MacBook Pro. While iOS9 does introduce some interesting features that make the platform more friendly to corporate users – for example, multi-tasking and app management including app-specific VPN management – it cannot be considered an enterprise alternative to Microsoft’s Surface Pro or other 2-in1s powered by big OS/x86 architectures.  

The enterprise limitations of the iPad Pro when compared with PCs is clear including the lack of file management capabilities and scripting technologies designed for PCs, compatibility with most productivity applications, lack of AD support and limited I/O options to name a few. At the end of the day this is just another, somewhat larger, iPad, albeit with a high end active stylus (pencil) at a higher price point.  While one could argue a future where iOS or other lightweight OSes become the enterprise OS of choice and laptops are promoted to the same architecture and framework as the rest of the mobile eco-system, that is a generational change and not one just around the corner. That said, Apple is not standing still and is clearly serious about the enterprise opportunity. Initiatives with IBM and Cisco are breaking enemy barriers and compelling use cases for iOS devices (especially tablets) are being created, often transforming existing workflows.  However, even with all of these enhancements, the iPad Pro is not a general purpose PC and cannot be considered a direct competitor to other two in one products like the Microsoft Surface Pro. Therefore we do expect Apple to encounter a bit of a positioning dilemma with the iPad Pro relative to existing iPads, 2-in1s and its own MacBooks.

What Makes a Tablet Enterprise Friendly?

According to a recent survey fielded by VDC Research among over 650 enterprise mobility decision makers, when evaluating mobile devices for line of business applications, battery life ranked predictably high on the list as did price and overall quality and reliability. With many of these tablets used in the field, wireless options—including embedded cellular capabilities—are critical (one key pain point for many enterprise and government tablet deployments has been sub-optimal GPS quality). In addition, overall ruggedness of the device—in terms of drop and water/dust protection—are key decision criteria for many applications. Surprisingly, however, security features such as integrated biometric capabilities did not crack the top five in overall importance.

However, tablets are often best characterized as a marriage of compromises. Therefore, for many enterprise line of business applications, of equal importance is the accessory and peripheral eco-systems developed by tablet OEMs and their partners. According to our research, protective cases lead the list of accessory requirements, in addition to solutions like payment and scanning sleds, multi-bay charging docks and vehicle mounts. In addition, highly application specific functionality, such as Zebra’s wireless DEX Bluetooth FOB (which addresses the huge headache and point of failure of cabled DEX solutions in the Direct Store Delivery market) often represent the keys to a well designed mobile solution. 

Mobile Device Requirements for Devices Supporting LoB Applications

The tablet form factor has unique appeal for mobile workers supporting a variety of enterprise and government workflows and applications. While the overall tablet is going through its most recent identity crisis, opportunities for business and public sector applications remain strong and robust annual unit growth (for both rugged and non-rugged tablets) is projected by VDC through 2019. The tablet form factor addresses mobile workers’ need for a portable mobile device while providing sufficient display real estate to support meaningful applications. From forms-based inspection and data collection applications to using the tablet as a customer engagement tool in high value retail environments, the opportunities for these devices are substantial.

To view our recently released report on the tablet market please click here.

Written by Matthew Hopkins and David Krebs (EVP)

How Apple and IBM are Changing the Face of Enterprise IT

A Continuing Partnership

Over the course of the past decade, Apple has come to epitomize the consumer side of technology, from the iconic iPhone to the Mac, which has made significant progress against the once-ubiquitous PC. In the enterprise, however, Microsoft’s legacy as the de facto OS for business remains a significant barrier that Apple continues to chip away at by virtue of its massive consumer appeal. Under CEO Tim Cook’s stewardship, there has been a notable shift to prioritizing the OS enterprise – take, for example, the partnership with onetime rival IBM in July of last year. Following the acquisition of EMM vendor Fiberlink, IBM has continued to enhance its enterprise mobility portfolio. Since announcing its partnership with Apple, the firm has been able to develop strategic and vertical-specific mobile applications for its clients while continuing to pursue its unified endpoint management initiatives by becoming more expert in managing both Apple’s mobile OS (iOS) and desktop OS (OS X).

Capitalizing on an increasingly Apple-friendly work environment

At face value, Apple’s products appear to be designed with the consumer squarely in mind, rather than the enterprise. However, with each successive OS update, key security and IT-friendly administration features continue to improve the company’s security posture, and have led to the expanded use of Apple products in business settings. In fact, IBM has been deploying iPads to its sales force since 2014, and has seen the number of Apple devices (iPads, MacBooks and iPhones) under management expand to 110,000 through the Mac@IBM program. The company expects the number of internal MacBook deployments to grow and is taking what it has learned from the experience to the enterprise market. Through its Mac at Work service offering, IBM will begin to support large scale Mac deployments as a managed service. (The company had been providing this service on a custom-basis for some time, but only recently extended the offering to all companies as a standardized service.) While PCs will remain dominant in the enterprise space for the foreseeable future, IBM recognizes that Macs are gaining traction in the enterprise, particularly among those now entering the workforce. As a result, not only will the demand for Macs in the enterprise grow, but tools to ease the process of deployment and management will be required. IBM has wisely partnered with JAMF Software for its Mac at Work offering, as JAMF’s Casper Suite is a widely used solution automating the deployment and configuration of OS X and iOS devices.

The Enterprise is Microsoft’s to Lose

IBM’s partnership could help Apple increase its presence in the enterprise beyond the mobile space to become a truly viable business OS. However, the recent release of Windows 10 could sap some of Apple’s momentum, since Microsoft’s next-generation OS has the potential to shore up its PC business while expanding its mobile presence. Beyond bringing back the Start button, the new OS allows applications to run seamlessly on all Windows devices, a capability that Apple has still not incorporated despite the similarity of iOS and OS X. The benefits of such compatibility from an enterprise perspective remain fairly ambiguous, as PCs tend to be used in a more isolated manner. However, the move could make mobile devices (especially tablets, given their larger screen size) more capable of handling business tasks. Furthermore, both Windows 10 and the growing role of Macs in the enterprise have implications for the endpoint management market tasked with managing the growing number of heterogeneous devices and operating systems used in businesses today.

The fact that IBM and Apple continue to expand their partnership is notable, and it places considerable pressure on Microsoft to evolve its enterprise mobility strategy – particularly its unified endpoint management products (SCCM and Intune) and Visual Studio tools for mobile application development tools. As the divide between consumer and enterprise becomes less and less distinct, the power of partnerships like that of IBM and Apple grow in significance. The days of Microsoft as the lone enterprise juggernaut are over, and the market – both partners and competition alike – is taking notice.

With Matthew Hopkins, Research Associate 

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.