will market interest in mobile managed services convert to customer contracts for mobile managed...

Will Market Interest in Mobile Managed Services

Convert to Customer Contracts for Mobile Managed

Services in 2010?

David KrebsPractice Director, Mobile & Wireless Solutions Practice

Recording Available

These slides are from a webcast presented on 03/17/10

A full audio recording is available for download at:

http://www.vdcresearch.com/market_research/mobile_wireless/freeresearch.aspx

1 – 2010 VDC Research Group, Inc.

http://www.vdcresearch.com/market_research/mobile_wireless/freeresearch.aspx


VDC Research

Complimentary insights & marketing data on the

enterprise & government mobility markets is available at:

www.vdcresearch.com

http://www.vdcresearch.com/


Today’s Speaker

• David Krebs, Director – Mobile & Wireless Solutions Practice

10 + years covering the markets for enterprise and government mobility solutions,

wireless data communication technologies and automatic data-capture research

and consulting.

Focus on identifying the key drivers and enablers in the adoption of mobile and

wireless solutions among mobile workers in the extended enterprise.

Consulting and advisory experience including: technology and market opportunity

assessments, technology penetration and adoption enablers, partner profiling and

development, new product development and M&A due diligence support.

Extensive primary market research management and execution experience to

support market sizing and forecasting, total cost of ownership (TCO), comparative

product performance evaluation, competitive benchmarking and end user

requirements analysis.

Boston University (BSBA).

Will Market Interest in Mobile Managed Services

Convert to Customer Contracts for Mobile Managed

Services in 2010?

David KrebsPractice Director, Mobile & Wireless Solutions Practice

VDC Research Profile

Core Practice Areas

• Mobile and Wireless Solutions

• Automatic Identification

• Embedded Hardware and Systems

• Embedded Software and Tools

• Industrial Automation and Control

Nearly 1,000 clients annually

• 90% technology suppliers

• Institutional investors, Tier 1 users, Tier 1 integrators

Core Offerings

• Syndicated multi-client market intelligence studies and services

• Proprietary market intelligence and strategy development support

• Strategic and commercial due diligence support


Mobile & Wireless Solutions

We have been serving tech executives since 1971

Embracing Open Platforms and Consumer

Influence, Enterprise Mobility Evolves Considerably

1990+ 2000+ 2010+

Custom designed

applications on

purpose built devices

Pre-packaged mobile

applications and

wireless e-mail

Application

generators and device

proliferation

Traditional Enterprise Mobility

• Limited mobile HW

choices

• Siloed approach to

solution development

• Uneven wireless coverage

• Limited mobile processing

capabilities

• Immature I/O solutions

Technology Drivers

• Device convergence

• Ease of use

• Wireless ubiquity

Business Drivers

• Increasingly mobile

workforce

• Real time business

processes driving

operational change

New Enterprise Mobility

• Diversity in device

choices

• Enterprise-wide mobile

strategies

• Mobile capabilities of

enterprise SW platforms

• Impact of consumer

products on business

user expectations



Mobile and Wireless Solution Requirements will

Differ by Worker Type

Road Warriors and Executives (Knowledge Workers)

Mobile office professional (Corridor warrior)

Campus mobile worker

• Wireless Email

• Dashboards

• BI/CI

• Mobile CRM

• Approvals

• Expense Reporting

• Workflow Management

Mobile

Worker

Target

Applications

Preferred

Device

Smartphone

Wireless Handset

Personal

Smartphone

Technical

Requirements

Field mobile worker (Task/Line Worker)

Smartphone

Vertical Device

• Wireless email

• Time & attendance

• Approvals

• Workflow management

• Mobile browser

• 3G+ GPS

• Push email

• Image capture

• Device management

• 3rd party apps

• Security support

• Push email

• Active sync

• Application partitioning

• WiFi

• Mobile browser

• 3G+ GPS

• Image capture

• Device management

• 3rd Party Apps

• Durability

• DECT functionality

• WiFi

• 3rd party apps

• Image captureVertical Device

• Wireless email


• Approvals


• Vertical applications


• Dispatching


• Vertical applications

US Worker

Population

11.5M

12.6M

16.8M

14.3M



http://images.google.com/imgres?imgurl=http://www.mobiletopsoft.com/images/news/htc_touch_Elf_front-celsius.jpg&imgrefurl=http://www.mobiletopsoft.com/board/tag/windows_mobile_6_professional/2/date&usg=__oiZxGLQz8OLQgyjqPDQaG0-rSJM=&h=2516&w=1539&sz=595&hl=en&start=2&tbnid=iy5DoCoyNefWWM:&tbnh=150&tbnw=92&prev=/images?q=HTC+Touch&gbv=2&hl=en

Rate the following mobility issues or concerns in terms of their level of importance

to your firm (1=Extremely unimportant; 6=Extremely important)

3.8

3.9

4.0

4.1

4.2

4.4

4.4

4.7

4.8

4.8

0 1 2 3 4 5

Supporting dual mode devices (work and personal use)

Provide real time remote training to field users

Clear mobile asset and software inventory management

Remote provisioning of devices

Remote helpdesk

Security policies for handling lost/stolen devices/data

Reducing support costs

Preventing data breaches

Ensuring user friendliness of mobility solutions

Minimizing device downtime user productivity loss

Effective Management of Mobile Solutions an

Increasing Concern

Managing the TCO of mobile device deployments is a consistent ‘top of mind’ issue for organizations

deploying mobile solutions.


Mobile & Wireless Practice

Demand for Managed Mobility Services Continue

to Evolve…

• Enterprise mobility end users are expressing strong interest in an appetite for new delivery,

deployment and management models for their mobile solutions. Primary issues among

organizations is maintaining control and visibility of their mobile ecosystem.

As a result of decentralized management of mobile devices, limited visibility into mobile inventory, total spend

and mobile usage, organizations are shifting their approach to managing mobile solutions.

Frequently, this means looking for third party support through a managed service model of their solutions.

• Mobile managed services portfolio evolving in phases. Initial phase focusing on more

traditional maintenance and monitoring services. Core services to include:

Inventory creation and tracking;

Break / fix and outsourced helpdesk (T1/T2) for user support;

Environment and networking monitoring and management services;

Enhanced security services; and

Mobile edge device support and technical services.



…and Will Include More Sophisticated Application Deployment and Management Services

• The second phase of managed mobility services will center more around application

deployment and support – including hosting. Key capabilities include:

Application deployment and provisioning

Online ordering portal for policy enforcement

• Although many end users postponed their mobile and wireless investments in response to

the recession, many are citing the recession as a catalyst for next generation managed

service business models.

54.7% of enterprises responding to a Q4 2009 survey are investing in an investigation of a broader managed

service delivery platform for their mobility solutions.

Today, more than 1 in 3 enterprise mobility solutions operators are receiving some or part of their mobile and

wireless solutions through a managed service.



Which of the following are the most important factors

driving the shift towards a service-based

mobility deployment model?

20.2%

15.5%

15.5%

14.0%

10.1%

8.5%

0% 10% 20% 30%

Simplifying end user mobility

Integrating the full set of technologies required for

enterprise mobility

Simplifying day to day IT & compliance operations

Ensure endpoint & data security

Ensuring universal connectivity & access control

Eliminating need to invest capital to continually grow a mobility

management platform

• With limited internal resources to support mobile

solutions, organizations are increasingly looking

to third party services to manage their mobility

services.

• For some organizations, management of security

policies is actually a driver for managed mobility

services.

• Even though many of the vendors identified the

IT departments within organizations to be their

inside competitors, a lot of the end users have

recognized the importance of managed services

in the simplification of IT operations.

Simplifying Solutions – Both for Users and Support –

are Key Factors Driving Demand for Mobile Services



Alignment of business, social and technological

imperatives is driving accelerated take up of mobile

data services in the enterprise

ERP

CRM

SCM

RMS

Expense Reporting

Collaboration

Email

HR

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

0% 5% 10% 15% 20% 25% 30% 35%

CI/BI

Pe

ne

tra

tio

n

Compound Annual Growth Rate % (2009-2013)

Bubble size correlates to 2009 installed base

CRM: Customer Relationship

Management

SCM: Supply Chain Management

ERP: Enterprise Resource Planning

RMS: Records Management Systems

CI/BI: Customer

Intelligence/Business Intelligence



A Key Demand Driver is the Structural &

Organizational Change Among Users

• A key issue for organizations today is the lack of internal resources to support mobile

solutions.

End users are demanding increased access to a more comprehensive suite of enterprise applications on a

broader collection of mobile devices.

However, IT organizations do not have the resources capable of supporting these requirements. As a result

demand for third party managed mobile services is expected to ramp.

• Many operators and evaluators of enterprise mobility solutions have significantly downsized

their IT departments over the past 18 months. As a result, the demand for outsourced

services and hosted application business models is heightened.

Moreover, organizations are increasingly consolidating their mobile and wireless investment decisions within a

broader IT function and are moving away from dedicated mobile and wireless teams. This transition is only

elevating the need for outsourced services as organizations frequently lack the dedicated expertise they used

to have in this function.

• As organizations consolidate their approach to mobile and wireless services, they are

consolidating their service contracts as part of their broader IT managed service contracts.

In these instances mobile and wireless may represent as little as 2-5% of the total value of the contract for

large scale operations.

Given this low level of investment for mobile solutions relative to other IT services, end users are increasingly

deferring to their service providers to make their mobile technology selection decisions. Technology vendors

will need to more closely align themselves with service providers to ensure equal representation.



User’s Requirements are Becoming Clearer – if

not Less Challenging

• Enterprise mobility solution operators cite a clear preferred path for migration to hosted

deployments, or adoption of managed services deployment models.

• The following solution elements are most often cited as preferred hosted deployment

migration:

Device management;

Security management;

Expense management; and

Core provisioning capabilities.

• An additional major issue for many companies – and opportunity for service providers –

will be compliance management and inventory management of their mobile devices.

Especially for multi-national organizations that are exposed to unique regional or country market nuances –

for example Massachusetts 201 CMR 17), this will represent an increasingly challenging issue.

In addition, with the influx of individual liable devices in corporate environments – and their use to access

corporate networks – organizations are looking for some control over these devices. This is especially acute as

organizations are now shifting from a homogenous mobile environment (one mobile OS/platform) to one that

supports multiple models.

• However, these capabilities are only beginning to be delivered through a structured

approach and there remains confusion surrounding which parties in the commercial

supply-chain are best positioned to deliver these capabilities.



SaaS Deployments Driving Mobile Opportunities…

or Mobile Requirements Driving SaaS Adoption?

• Adoption of enterprise applications in a

SaaS model is reaching critical mass

Leading SaaS-based enterprise applications

include CRM, E-mail and messaging, HR and

Recruiting and Collaboration Services to name a

few.

Organizations are citing ‘speed of deployment’

and ‘capital’ and ‘operation expense savings’ as

the driving forces behind their adoption decisions.

• The pressures on IT from an increasingly

mobile workforce and the need for remote

access to enterprise applications across a

broader spectrum of devices – from

notebooks to Smartphones – is expected to

be another major catalyst to organizations

deploying SaaS-based applications

IT organizations are struggling to keep up with

demand to access key data securely in

increasingly remote settings.

Moreover, the challenge to support a broader

range of device types and OSes is driving

organizations to evaluate alternatives.



37.5%

31.3%

29.7%

12.5%

12.5%

0% 10% 20% 30% 40%

CRM (Customer Relationship

Management)

ERP (Enterprise Resource Planning)

HR (Human Resources/Payroll)

SCM (Supply Chain Management)

Other

SaaS-based Enterprise Application Adoption

22.0%

18.5%

15.5%

10.7%

10.7%

7.7%

7.7%

0% 10% 20% 30%

Enterprise app integration

Ability to customize

User friendliness

Support

Scaling users

Scaling functionality

Hosted options

When evaluating mobile applications, what are the most important selection

criteria?

• Some of the key mobile application selection

criteria are in conflict with traditional SaaS

capabilities.

• Specifically, many SaaS solutions today are

effectively standalone systems that are not

deeply integrated with other back end enterprise

applications (Salesforce.com, for example).

• Moreover, the demand to customize the mobile

solution will be a challenge for mobile SaaS

vendors to support.

• Conversely, mobile SaaS solutions are capable of

effectively handling requirements concerning

scalability and user friendliness.

Requirements for Backend Integration Will be Key

Hurdle for SaaS-based Mobile Applications



Rank the following criteria in terms of their priority

regarding the advantages of using a SaaS rather

than an on-premise software solution for

enterprise mobility applications(1=Very Low; 5= Very High)

3.9

3.9

3.8

3.7

3.6

3.6

3.6

3.5

1 2 3 4 5

Ease of implementation

Lower upfront investment

Ease of management

Shift to variable IT cost

Faster deployment

Scalability

Ease of upgrading

Reduce staffing costs

• The suppliers’ efforts to decrease the

implementation and customization time have

certainly been recognized by the end users.

• The manageability aspect of a SaaS solution is

not underestimated by the end users even with

the older / technology resisting users.

• Vendor communities’ worries for the increasing

compliance requirements are surprisingly not

recognized by the end users.

• VDC predicts that emphasizing the cost savings

associated with SaaS solutions could be more

attractive since the consumers have become

highly cost-sensitive due to the economic

difficulties.

Ease of Deployment and Lower Upfront

Investment are Key Mobile SaaS Drivers



Rank the following criteria in terms of their

priority regarding the concerns of using a SaaS

rather than an on-premise software solution

for enterprise mobility applications(1=Very Low; 5= Very High)

3.9

3.8

3.8

3.7

3.7

3.6

3.3

3.3

0 1 2 3 4 5

Data privacy

Integration issues with other applications

Vendor lock-in

Connectivity issues

Customization capabilities

Loss of IT control

Higher long term costs

Software features change with little notice

• Some of the end users’ main concerns with SaaS

solutions can be overcome by educating them

regarding the subject matter.

• Many of the vendors declared that they are

focusing on offering highly customizable

solutions even though it is not one of the top

issues highlighted by the consumers.

• Most of the vendors are not expecting the

network to be consistently connected and

therefore are equipping their devices with offline

functionalities.

…While Data Privacy and Back-End Integration

Represent Key Concerns



Systematic Approach to Development of Next

Generation Delivery Models Required

• Which mobile services map best to next generation deployment and delivery models?

As a result of limited internal support capacity, end users are expressing strong demand for third party

managed services for their enterprise mobility investments.

Most organizations are basing initial investments and evaluation decisions around outsourcing device

management and security management.

While appetite for mobile SaaS solutions is increasing, overall demand is expected to be uneven as end users

struggle to address backend integration and customization requirements and ability to operate in an off-line

or disconnected state.

• Where the opportunity exists, what are the leading mobile SaaS requirements?

Demand for SaaS-based mobile applications will be strongest in some of the more established or mature

applications such DSD or workforce management.

One of the benefits end users are looking for is ease and time of upfront deployment. End users ideally

looking for deployment timeframes of less than 8 weeks.

End users are looking for monthly or quarterly billing for these solutions. Per user or flat fee enterprise licenses

are the most desired licensing options.

Uptime availability – another key issue – should be at least 96%.



Q&A Session

For more information about VDC Research coverage of the global markets

for enterprise & government mobility – including the Enterprise Mobility

Managed Services: Next Generation Deployment Models Report – please

contact:

David Krebs

Director, Mobile & Wireless Solutions Practice

[email protected] | 508-653-9000 ext.136

Gerrald Smith

Account Executive

[email protected] | 508-653-9000 ext.113



mailto:[email protected]

mailto:[email protected]