Managed Services & Hosted Applications Volume 2 Track 3: Enterprise Mobility Professional Services

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1 Practice Executive Brief June 2012 Strategic Insights 2012: Enterprise Mobility Solutions Managed Services & Hosted Applications Volume 2 Track 3: Enterprise Mobility Professional Services By: Britt Libby Research Associate With: David Krebs Vice President 0

2 Research Summary About this research program Strategic Insights 2012: Enterprise Mobility Solutions Market Opportunities and Forecasts in The full research program includes: Market Definition & Segmentation Maps Market Estimates & Forecasts for Competitive Position, Share & Direction The Strategic Insights 2012: Enterprise Mobility Solutions Market research program provides granular data and detailed analysis on the biggest issues and trends in the enterprise mobility solutions market in order to help clients identify, define, prioritize, plan and attack the best market opportunities. In order to help clients fully apply the research, clients also receive analyst inquiry time so that they may: get an our Analyst s commentary on specific decisions and strategies for their company, have a deeperdive conversation related to a specific issue or trends covered in the research or a discuss the definitions, assumptions and methodologies driving the segmentation models and forecasts in the report. Customer Requirements, Preferences & Investment Plans Channel & Other Ecosystem Participant Capabilities Definition & Analysis of Key Issues, Forces & Trends This executive brief provides an overview of our coverage and analysis for this volume. The full research report offers deeply segmented data and analysis that is extremely actionable. We encourage you to contact us to learn more. 1

3 Ways to Work With Us Our market research is the basis for the many other ways that VDC can help you to grow your business. Our clients rely on us to provide actionable insights that support their most important strategic initiatives including: corporate development projects, opportunity assessments and lead generation programs. 2

4 Scope & Methodology To develop this report, VDC employed the following research methods: Background & Objectives VDC s Enterprise Mobility Professional Services series spans two volumes that provide market estimates, forecasts, competitive share, end-user requirements, and channel trends for enterprise mobility professional services including traditional break-fix, integration and deployment services to more advanced managed services. This study was conducted as part of VDC Research s ongoing research initiatives that examine detailed trends and end-user perceptions of a pay-as-you-go deployment models for mobility solutions. VDC defines a mobile managed service as an offering / solution that could encompass a broad range of mobility related components and services such as: configuration, applications, integration, management and maintenance these offerings / solutions have typically been onpremise / behind the firewall. Mobile managed service offerings are being brought to market via a service delivery platform that can combine all or multiple elements of solution design, deployment and integration, device management and maintenance, and application hosting all of which can be delivered on a an a la carte, pay-as-you-go basis. Methodology / Demographics In-depth vendor interviews with marketleading Carriers, SIs, ISVs, Hardware OEMs 433 qualified completes via a web-based survey Field Dates: April 2012 <$100M in annual revenues: N = 224 $100M - $1B: N = 65 $1B+: N = 103 Qualifications & Requirements IT and LOB executives (manager level and above) Involvement in the purchase / approval process of enterprise applications and services. Currently using or planning to deploy mobile solutions. 3

5 Market Overview Even as IT asserts its authority over enterprise mobility management, customers and employees remain key stakeholders driving organizations mobile initiatives 35% 30% 30.7% 29.6% What are the primary drivers for your organization s adoption of mobile managed services? (Percentage of respondents select up to three) 25% 20% 24.7% 24.0% 23.8% 23.1% 20.1% 18.0% 17.8% 15% 13.4% 10% 7.6% 5% 0% 1.2% Internally, within the organization, the primary drivers of mobile managed services are employee satisfaction and support of the IT staff, which has not developed expertise in mobile deployment. Externally, rapid innovation in mobile technologies has driven many organizations across all sizes and vertical markets to deploy mobile technologies as a means to keep pace with competition as mobility facilitates new approaches to customer engagement. These primary drivers of mobile managed services adoption indicate that IT decision-makers are motivated largely by strategic as opposed to operational motives. For vendors, this indicates that investments to enhance the scope and quality of their services will be advantageous even at the expense of increased prices for the customer. 4

6 Market Estimates & Forecasts Vendor offerings in application-level security will see growing traction The transition to a per-user model of mobile management As mobile technologies penetrate both the consumer and enterprise markets, we are seeing employees utilizing multiple mobile devices on a regular basis to access corporate data and applications. Smartphones and increasingly tablets have seen strong growth in the enterprise rather than replacing devices such as the laptop or desktop PC, however, these devices are used alongside these more established computing technologies. This trend is especially acute in health care where medical personnel may utilize several devices in the course of their work. This trend will increasingly drive demand for security and BI solutions capable of identifying and monitoring which user is accessing which data. We will also see vendors develop more flexible licensing and pricing models to accommodate these organizations, transitioning to a per-user licensing/pricing system. Evolving mobile services portfolios Security will always be the low-hanging fruit for management of enterprise technologies. Moving forward, however, we will see vendors supplement their MDM and mobile security management offerings with more sophisticated, targeted security services. This includes drilling down into mobile security with application-level security policies and services for data loss prevention including dual-persona solutions (where separate business and personal profiles co-exist on a single device), sandboxing of applications, and app wrappers (enabling security policies and encryption to be applied to a single application). These solutions have all entered the market in the past 12 months, and are already seeing traction as MDM and MAM providers look to differentiate and expand their solution sets. Verizon s new Application Certification program will evaluate and rate all apps in their app store against certain protocols, indicating their level of security and enterprise readiness. We will also see increasing demand and adoption of the enterprise app store as organizations begin to implement more strategic mobile initiatives, and increase their app development capabilities. This market will see considerable growth as vendors build in value-added offerings such as mobile analytics and BI capabilities to differentiate their offerings from those of competitors. Hybrid solutions as the new norm As the mobile services market continues to evolve, with new offerings and vendors entering the market, vendors are increasingly challenged with development of a comprehensive end-to-end mobile management platform. Antenna with its AMPchroma platform is an example of a vendor offering a single simple yet sophisticated mobile management console. As vendors partner to develop more comprehensive solution sets, it will be important that these vendors also be able to customize these bundled service offerings. For the SMB market, especially, flexibility will be required to meet the price restrictions in the large enterprise, IT will expect customization of these service offerings to meet their unique requirements. As much as possible, vendors must develop seamless mobility management platforms, capitalizing on synergies across their partners solutions, and simplifying IT s vendor management. Talent acquisition key to driving vendors mobile platforms Talent acquisition will remain an important consideration for these mobile MSPs as they continue to shape and evolve their mobile services portfolios. Individuals such as Jim Somers (former AT&T) and Mark Watson (former IBM) at Antenna and Mark Siegel (formerly McAfee) at Mocana are playing a significant role in shaping the evolution of this market. Vendors must invest not only to advance their mobile technologies, but in the continued evolution of their mobile services capabilities against those of competitors. Symantec s recent acquisition of Nukona added value not only in advancing its MAM capabilities but in adding Chris Perret and Mark Gentile to their team. 5

7 Strategic Issues, Drivers & Trends Today s rapidly expanding mobile managed services market will inevitably converge mobile ISV market to see increased acquisitions Co-Opetition & Channel Play The growing influx of mobile technologies into the workplace has created a wealth of opportunities. The market continues to expand with new vendors, products, solutions and services entering the market each day. This vendor ecosystem includes everyone from carriers, mobile ISVs, enterprise ISVs and hardware OEMs to large and small Sis. Mobile MSPs have employed strategies from increased M&A to seeking third-party partnerships (including white-label partnerships) to adapt to this channel-centric market. Announcements of new market acquisitions are frequent, as companies look to grow their customer base, grow their product portfolio, expand their market reach, or increasingly for talent acquisition. Each of these players has struggled to exploit its unique market positioning to carve out a strong market play. Co-opetition remains a mainstay for this market, however, and the channel its backbone, as these vendors recognize their inability to satisfy each stage of mobile lifecycle support and customer engagement at a competitive level. Each of these vendor communities commands unique potential in this market. Traditional Enterprise ISVs & HW OEMs Carriers Customers Mobile ISVs Systems Integrators The Path to a Consolidated Mobile Managed Services Market History Predicts the Future We will see further acquisitions and consolidation in this immature market (e.g. Symantec acquiring Nukona and Odyssey, Wyse acquiring Trellia, SAP acquiring Syclo) as vendors bring new technologies and solutions to market. Looking at the evolution of the market for traditional managed services, we see many similarities the flood of startups into the market with innovative solutions and venture funding, staggered acceptance and adoption of these services and the wave of market acquisitions as an early sign of market convergence. More important than these similarities, however, are the variations telcos have invested early to establish their role in this market (namely AT&T, VZW, Orange). Systems integrators, conversely, have been slower to see success early on, and have advanced slower than other vendor communities this will change as we see mobility as a managed service mature, and companies look to systems integrators as trusted consultants and technology specialists. Maturation and consolidation of this market although inevitable will be a non-issue for the short-term. Looking long-term (at least 2-3 years out), we see mobility shifting from a standalone service to an integrated piece of enterprise technology management. As this occurs, mobility will no longer represent a product category in and of itself ISVs, OEMs, telcos, and mobile ISVs will strive to differentiate their solutions from those of competitors and build up the resources and infrastructure required for enduring success in this market. Systems integrators, and those replicating this business model integrating others solutions, but building strong customer relationships will wield a strong advantage over competitors. Tier 2 and 3 SIs such as Vox Mobile, Peak Technologies, Stratix, and DecisionPoint embody this business model on a smaller scale, and may become attractive acquisition targets for large SIs. As trusted advisors to the enterprise, with extensive experience and resources to support mobility as a service, maturation of the mobile managed services market will favor the systems integrator business model and vendor community. Proof of this is carriers acquiring professional services companies (Verizon acquiring Terremark, AT&T acquiring incompass) and replicating this business model. 6

8 About the Team For further information about VDC s 2012 Strategic Insights 2012: Enterprise Mobility Solutions Market Track 3: Enterprise Mobility Professional Solutions, Volume 2: Managed Services & Hosted Applications report, contact: Mike Collette VP, Sales & Enterprise Accounts x112 info@ Team David Krebs Vice President VIEW FULL BIO Eric Klein Senior Analyst VIEW FULL BIO Balca Korkut Analyst VIEW FULL BIO Britt Libby Analyst VIEW FULL BIO 7

9 About VDC Research VDC Research Group (VDC) provides exceptionally detailed direct-contact market research and consulting services to many of the world's largest technology suppliers, innovative start-ups and leading investors. The firm is organized around four practices, each with its own focused area of coverage. Our clients rely on us for highly segmented research and analysis which is derived from our unwavering commitment to the idea that all markets are collections of smaller market segments and that winning companies must develop and execute strategies that are segment- specific. Please visit our website at www. to learn more, or call AutoID MEET THE TEAM Embedded Hardware & Systems MEET THE TEAM Embedded Software & Tools MEET THE TEAM MEET THE TEAM 8

10 2012 Notice of opyright The entire contents of Source: VDC s 2012 Strategic Insights 2012: Enterprise Mobility Solutions Market Track 3: Enterprise Mobility Professional Solutions, Volume 2: Managed Services & Hosted Applications report are proprietary to VDC Research Group, Inc. (VDC), and may not be distributed in either original or reproduced form to anyone outside the client s internal organization within five (5) years of the report date without prior written permission of VDC. VDC has devoted its best efforts to obtain for and provide to its clients as accurate data as is possible. Nevertheless, we cannot be held responsible for incorrect information provided to us by vendors, users, or others that we interview. Nor can we be held responsible for forecasts of the future evolution of an industry, which, in retrospect, proves inaccurate. Our goal is to provide the best possible analysis of an industry, utilizing data obtained through a time-proven and rigorous research methodology, for our clients to employ in developing strategies to compete in an uncertain and ever-changing business environment. Trademark Acknowledgement Many names of companies, associations, technologies, products and product types, etc. mentioned in this report comprise Trademarks, either registered or non-registered, owned by various entities. These are too numerous to mention individually. VDC acknowledges that ownership of these Trademarks exist and requests that readers acknowledge this as well. 9