Executive Summary. MOBI PResents:

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1 MOBI PResents: EXPERT TIPS TO UNDERSTAND AND REDUCE MOBILE DEVICE TOTAL COST OF OWNERSHIP Executive Summary As enterprise mobility continues to grow both in popularity as well as complexity, more organizations are finding the value in outsourcing parts or all of their mobility programs. When deciding whether or not to move forward with the process, they must evaluate the annual total cost of ownership (TCO) of the mobile devices in their corporate wireless structure. The annual total what? Yeah, it gets pretty confusing and calculating your annual carrier bill expenses doesn t even begin to scratch the surface. Luckily, Gartner began the conversation in 2012 when they published Total Cost of Ownership of Mobile Devices. Using that as a stepping stone, we rounded up some industry experts to weigh in on the different aspects of TCO so hopefully we can provide you with a clearer understanding of the value in the process, along with the value that outsourcing wireless needs can bring an organization. In order to gain a clear picture of the true TCO of your wireless program, an organization must calculate all of the following costs: Voice & Data, Labor Costs, MDM, Device Hardware & Software, and General IT Administration & Training. In the following report, we will explain each of these cost categories more indepth, while showcasing the advantages an MMS vendor would bring in reducing them. General IT Admin & Training, $65 Total Annual Cost per User $1,900 End User Labor, $250 t s e r n a l Co s r ie r / Ex t Voice & Data, $830 Help Desk Labor (L1 + L2), $250 In t e r n a l Co s $700 Labor Fully Burdened t s Ca r IT Operations Labor (L3), $200 Device HW & SW, $200 WiFi/VPN HW & SW, $50 MDM / Security, $55 Gartner "Total Cost of Ownership of Mobile Devices"

2 Voice & Data: $830...data consumption is rising and consumption of voice services is declining. This is particularly true for mobile broadband use with smartphone apps, videos, pictures, messaging, and social networks. Joe Basili Managing Director of TEMIA The cost for voice and data coverage is arguably the most obvious element of TCO. While it may be obvious that this cost should be included in TCO calculation, it is less obvious how organizations can control or decrease voice and data charges each month. Oftentimes, they rely on the carriers themselves to help optimize their wireless bills each month by suggesting savings options. Unfortunately, this strategy is often met with lessthanstellar results, as the desire of wireless carriers to make money from their customers reigns supreme. Despite an increasingly competitive wireless carrier market driving prices down, customers carrier bills are continually on the rise. According to Joe Basili, Managing Director of TEMIA, there are a number of different reasons to explain this phenomenon. First, the communications services that employees use are constantly changing. Service costs may decline, but employees may consume more services or change the mix of what they consume. For example, data consumption is rising and consumption of voice services is declining. This is particularly true for mobile broadband use with smartphone apps, videos, pictures, messaging, and social networks. In order to combat the subpar job that carriers do in helping to optimize wireless bills, and the growing cost of wireless bills in general, organizations are turning to MMS to help with expense management. Included in the expense management wheelhouse of responsibilities is the monthly analysis of all carrier bills to compare anticipated versus actual employee voice, data, and messaging usage. There are significant savings from avoiding unused data or minutes. Most organizations find big savings from having employees on the right plans based on consumption patterns. There will be some employees that should be pooled together and others in separate plans, noted Joe Basili. Further, expense management teams can monitor individual lines over extended periods of time, eventually suggesting cancellations of any zero usage lines after a month or many months of inactivity. MMS savings with expense management services

3 4,524 Hours Annually $249,875 Salary Expense MMS enables and creates this bandwidth and allows organizations to work smart, based on the increased visibility and analytics MMS provides. Mitch Black President, MOBI LABOR: $700 The Labor Cost component of TCO includes both the cost of employing an internal IT team to do what an MMS vendor can do, as well as the cost of the time taken away from critical projects to address wireless issues. According to Gartner s original report, Labor Costs, on average, amounted to $700 annually. So we asked mobility experts to weigh in on what exactly organizations are doing wrong that makes this number so high. According to Timothy Colwell, SVP of Global Business Analytics for AOTMP, Users are driving mobility demand and often demand outpaces native corporate support capabilities. Users want to be mobile and to be connected, which requires the same level of user support as seen with desktop support. The difference with mobility is that user demand is forcing policy and support development to mature in parallel with delivery of support, which leads to operational inefficiencies that increase cost. Recently, a MOBI prospect delivered an internal presentation to its management team regarding the benefits of outsourcing their wireless needs. In the presentation, they noted that between their Network Services, IT, and Help Desk teams, their current wireless environment required 87 hours of staff time weekly to manage that s 4,524 hours annually, and $249,875 in salary expense alone. Naturally, organizations next beg the question: What happens to my internal IT staff if we start outsourcing wireless needs? We posed this same question to MOBI President Mitch Black, who offered the following to relieve such qualms: MMS enables those people to work more efficiently and focus time and efforts on more strategic company goals in mobility. Mobility First organizations continue to increase and the need to have IT professionals focused on this trend is key. MMS enables and creates this bandwidth and allows organizations to work smart, based on the increased visibility and analytics MMS provides. When organizations turn their wireless programs over to an MMS provider, they are not only saving money, but also saving resources by gaining the ability to reallocate their internal staff s skills to more strategic business initiatives. The Gartner report breaks the levels of support down into three tiers, and we called on Gartner s Research Director, Federica Troni, to help explain what each entailed: Tier 1 Service Desk Requirements: typical help desk support, provided by phone, , instant messaging, etc. Tier 2 Escalation and Dispatched Support: used if issues cannot be resolved by the Tier 1 remote agent; a visit to the user desk or appointment with a technician is now required. Tier 3 Escalation and Architects: involves the resolution of more complex issues, many times involving networking or architectural aspects of the mobile environment.

4 MDM: $55 MDM (Mobile Device Management) software is used to secure, monitor, manage, and support mobile devices in an enterprise setting. As enterprise mobility continues to evolve, MDM solutions are gaining popularity. In many cases, they are now viewed as a necessity to ensure the confidentiality of sensitive corporate data shared via . MMS vendors have started partnering with MDM vendors in an effort to integrate the two solutions to create one single super solution for customers. Managing MDMs can be a complex task, but MDM vendors understand said complexities and know exactly how to manage them to minimize the risks associated with stolen data. Device Hardware & Software: $200 According to the Gartner TCO Report, the device hardware portion of this category refers to the annualized cost of the device, plus 7% of the annual value for lost, stolen, or damaged devices and spare parts. Additionally, the software portion refers to an annual allocation for software on the device, IT software, and annual maintenance. The cost of device hardware is on the rise, as many organizations shift away from traditional cell phones in favor of smart phones. The capabilities available with smart phones today render older, dumb phones just that dumb. Not to mention, the trend in 20 and 30somethings of the business world today vying for the latest and greatest in technology. As soon as the new Apple iphone is released, the previous version becomes null. Organizations have to be careful to implement strict guidelines around device upgrades in order to avoid the fees associated with early upgrades with carriers. Tablet Data Card Feature Phone MachinetoMachine Smartphone Signal Booster General IT Administration & Training: $65 This cost category refers to the support required throughout the life cycle of the device, which will be fully provided by either an internal or external IT organization. Further, the user training required by employees to learn how to use the device and/ or applications on the device is factored into said cost as a productivity loss.

5 Conclusion Mobility is rapidly becoming as prevalent as desktop/laptop technology for many users and as mobility services continue to proliferate, the total cost of mobility ownership will increase. Tim Colwell AOTMP So what can we expect to happen to these costs over the next five years? In order to gain visibility into future trends of TCO, we asked each expert to share their opinions on the matter. According to Tony Rizzo and Ralph Rodriguez of Blue Hill Research, they expect to see aggregate TCO to increase substantially as enterprises continue to expand their wireless programs across more levels of their organization. However, they noted that they predict the average TCO per project will drop as organizations become more knowledgeable on best practices in their mobility environments, and mobile vendors begin lowering prices due to economies of scale in selling a substantially higher number of mobile services to many more enterprises. Tim Colwell echoed similar predictions, saying that he expects TCO to continue to rise as organizations expand their wireless programs. Further, he added, mobility is rapidly becoming as prevalent as desktop/laptop technology for many users and as mobility services continue to proliferate, the total cost of mobility ownership will increase. Enterprise mobility programs are on the rise, and expert support for these programs is essential to ensure the best ROI. MMS providers understand the complexities of all different shapes and sizes of wireless programs. They have the knowledge and tools necessary to ensure enterprises get the most out of their wireless environments. Sources Gartner Total Cost of Ownership of Mobile Devices: 2012 Update (PDF) Joe Basili TEMIA Federica Troni Gartner Mitch Black MOBI Ralph Rodriguez & Tony Rizzo Blue Hill Research Tim Colwell AOTMP