WHITE PAPER N Enterprise: MDM Usage and An Osterman Research White Paper Published July 2012 SPONSORED BY sponsored by SPON sponsored by Osterman Research, Inc. P.O. Box 1058 Black Diamond, Washington 98010-1058 USA Tel: +1 253 630 5839 Fax: +1 253 458 0934 info@ostermanresearch.com www.ostermanresearch.com twitter.com/mosterman
EXECUTIVE SUMMARY Mobile devices are becoming an increasingly important component of the typical organization s IT infrastructure. For example, Osterman Research has found that 32% of the corporate workforce in mid-sized and large North American organizations employed a smartphone in late 2011; these figures will grow to 41% in 2012 and 50% by 2013. Moreover, the diversity of mobile platforms is increasing in three important ways: the number of different hardware platforms that are used in the typical workplace, the number of mobile operating systems in use, and the different versions of each operating system (particularly in the Android market) that must be supported. Add to this the fact that a growing proportion of these devices and operating systems are being supplied by individual users who retain ownership of these devices, but access corporate resources using them the so-called Bring Your Own Device (BYOD) phenomenon. KEY TAKEAWAYS IN THIS WHITE PAPER More smartphones, tablets and BYOD = a rapidly growing need for Mobile Device Management (MDM) The combined growth of mobile hardware platforms, operating systems, operating system versions and the increase in corporate/personal mix of devices is creating a need for MDM platforms that offer more features, more scalability and better performance than what many organizations are using today if they are using MDM at all. The MDM market space is small and fragmented The market for MDM is on the verge of gaining even greater attention from corporate decision makers, which will result in rapid market growth and consolidation in the market. MDM requirements are driven by security, scalability and the need to move beyond ActiveSync Organizations that do not address MDM properly face a growing set of risks, including greater downtime, higher IT costs, violation of legal and regulatory requirements to protect data on mobile devices, an inability to adequately retain data on mobile devices, and reduced employee productivity. More MDM = more IT complexity, more strain on resources and a growing emphasis on cloud-based MDM solutions The growing resource drain that mobile management is imposing on IT departments is driving many organizations to consider either a managed service provider (MSP) or cloud-based approach for their MDM solutions. The combined growth of mobile hardware platforms, operating systems, operating system versions and the increase in corporate/person al mix of devices is creating a need for MDM platforms that offer more features, more scalability and better performance. MOBILE DEVICES MAKING SIGNIFICANT GAINS PENETRATION OF MOBILE DEVICES Our research has found that smartphone penetration is reasonably high in the workplace, with 36% of email users employing a smartphone in a corporate context as of early 2012 (from 32% in late 2011), although the combination of smartphones and traditional cell phones is nearly 100% in most organizations. The research conducted for this white paper is consistent with the research conducted for an Osterman Research industry analysis study i that was published in February 2012 showing that smartphone penetration among mid-sized and large organizations in North America will reach 50% by YE2013. 2012 Osterman Research, Inc. 1
Proportion of Workforce that Uses Smartphones 2011-2013 Not surprisingly, and despite RIM s struggles of late, BlackBerry leads the penetration of smartphone devices in the workplace with 42% of users. BlackBerry is followed by ios, Android and Windows Phone, as shown in the following figure. Recent attempts by RIM to stem the tide with new BlackBerry smartphones and the introduction of the RIM PlayBook have not succeeded in helping the company to retain its once dominant position relative to alternative platforms in use in the workplace. Distribution of Smartphones by Vendor Recent attempts by RIM to stem the tide with new BlackBerry smartphones and the introduction of the RIM PlayBook have not succeeded in helping the company to retain its once dominant position relative to alternative platforms in use in the workplace. 2012 Osterman Research, Inc. 2
THE GROWTH OF TABLETS For a product category that was basically non-existent two years ago, the current and forecasted penetration of tablets at work, with the ipad in leading position, is nothing short of remarkable. Microsoft experienced limited success with the tablet capabilities in Windows XP and Vista, but the resulting devices were expensive and usually required pen input within standard Windows applications. Tablets running Windows have become few and far between at least in terms of actual usage if not models available. With Apple s introduction of the ipad, support for multi-touch gestures, and lightweight applications, the dynamics changed significantly. On average, the use of ipads and other tablets at small organizations is 50% higher than at large organizations. It is usual for larger organizations to have more mature IT processes for approving more devices, but with process maturity usually comes longer timeframes. Thus, Osterman Research believes that the higher penetration at smaller organizations comes at the cost of less stringent security precautions. Proportion of Workforce that Uses Apple ipads and Other Tablets 2011-2013 BYOD will cut corporate costs in the short run, but will add to them significantly if organizations do not deploy robust MDM capabilities. THE IMPACT OF BYOD Osterman Research found in a study published in 2012 ii that the budget for mobile messaging initiatives and management in 2012 is expected to increase by just under 10% from 2011. However, these figures are significantly lower than what was forecasted based on a similar survey published the year before. The smaller budget in this year s survey may be a direct result of the BYOD trend. Because organizational decision makers are increasingly amenable to employees desire to supply their own smartphones and tablets, they may now be budgeting less to the acquisition of the devices themselves and may have more funds available for the MDM systems required to support them. This will cut corporate costs in the short run, but will add to them significantly if organizations do not deploy robust MDM capabilities. THE GROWING DIVERSITY IN THE MOBILE WORLD Even though RIM continues to lead in the market for mobile devices used in the workplace, it is losing ground on two critical fronts. RIM s market share in the 2012 Osterman Research, Inc. 3
corporate smartphone market is dwindling from the much greater market share it held just a few years ago as shown in the following figure as corporate users and decision makers migrate toward ios and Android-based devices. Demand Among Mobile Users for Various Devices, 2008-2011 % Responding That Users are Strongly Requesting or Clamoring for Devices Second, and perhaps more significantly, RIM is losing the hearts and minds of consumers including corporate employees who are the driving force behind the BYOD trend. While BlackBerrys are still in demand, iphones and Android-based devices are in much greater demand. Demand Among Mobile Users for Various Devices % Responding That Users are Strongly Requesting or Clamoring for Devices RIM s market share in the corporate smartphone market is dwindling from the much greater market share it held just a few years ago as corporate users and decision makers migrate toward ios and Android-based devices. 2012 Osterman Research, Inc. 4
THE NEED TO IMPROVE MOBILE DEVICE MANAGEMENT A SNAPSHOT OF THE MOBILE DEVICE MANAGEMENT SPACE Mobile device management solutions are a critical component of any infrastructure that supports more than a handful of mobile devices. MDM solutions manage mobile device policies, configurations, permissions, security and other aspects of mobile device use, ensuring that mobile devices are used in accordance with corporate policies, regulatory requirements and legal obligations. The absence of MDM in an organization that relies on the use of company-supplied and/or personally owned mobile devices is akin to the corporate email system being a hodge-podge of Hotmail, Gmail, Yahoo! and other email systems that are not managed by IT according to corporate or other policies. MDM solutions are offered by a number of large and small vendors more than 80 vendors currently serve this market, including RIM, Microsoft, HP, Good, Notify, Sybase, Visage, Zenprise, MobileIron, BoxTone, Airwatch, Fiberlink and many others. The market for MDM is relatively fragmented owing to its relative newness compared to other markets for messaging system management solutions and tools. Given the dominance of the BlackBerry and its long tenure as the leading mobile device in use in the workplace BlackBerry Enterprise Server (BES) leads the deployment of MDM solutions. As shown in the following figure, our research found that BES is deployed in more than one-half of the organizations surveyed. Distribution of MDM Solutions by Vendor We anticipate that the need for MDM solutions to replace BES coupled with growth fueled by organizations that have not yet deployed MDM solutions will create significant change and consolidation in the market. However, the decline of the BlackBerry relative to iphone and Android devices has created flux in the market. We anticipate that the need for MDM solutions to replace BES coupled with growth fueled by organizations that have not yet deployed MDM solutions will create significant change and consolidation in the market over the next 12 to 18 months. RIM has recently introduced the new BlackBerry Mobile Fusion server to extend BES to manage Android and ios devices. While Fusion may save BES as an MDM platform, it may also accelerate migration off of BlackBerry mobile devices. 2012 Osterman Research, Inc. 5
RAPID MDM GROWTH IN RECENT YEARS The penetration of MDM systems has grown significantly in recent years, with more than one-half of organizations deploying an MDM solution in 2008 or later, although the most significant uptick in demand for MDM began in 2009. Deployment of MDM Systems by Date THE MDM-MOBILE DEVICE MISMATCH Even though RIM s share of the corporate mobile device space is declining, RIM continues to hold a commanding lead in the MDM market. This is due to a couple of factors. As the leading corporate mobile platform for many years, organizations initially deployed BES to manage BlackBerry devices that were proliferating at a much faster pace than any other mobile platform. The current dominant share held by RIM is testament to the legacy impact of MDM systems, led by BES, which were deployed in mid- to late 2000s. However, as the market for mobile devices shifts from BlackBerry to ios devices and Android devices, an expanded set of MDM solutions will need to be deployed in order to manage the mainstream devices. Interestingly, however, as shown earlier in this white paper, Microsoft s Systems Center Mobile Device Manager occupies the second slot in the MDM rankings ahead of any of MDM solutions from Airwatch or Good which are usually thought of as the more full-featured and market-leading MDM offerings. There are at least four possibilities for this Microsoft-centric focus: As the market for mobile devices shifts from BlackBerry to ios devices and Android devices, an expanded set of MDM solutions will need to be deployed in order to manage the mainstream devices. Many enterprise decision makers have still not completely grasped the significance and importance of having highly robust MDM solutions in place. Some mainstream MDM vendors still have not engineered platforms that work well enough with ios and Android devices to motivate decision makers to implement them. The MDM space is very fragmented and many of the key MDM vendors, such as Good, MobileIron, and Airwatch, are not spending enough vs. Microsoft to break through with name recognition and differentiation for their offerings. There is a lack of education and awareness by IT about what is required in the MDM space. 2012 Osterman Research, Inc. 6
While some combination of these factors may be in play in many organizations, Osterman Research believes that the dominant reason is the first one: decision makers perhaps motivated by IT budgets that are still strained because of the ongoing soft economy have not fully grasped the critical importance of robust MDM solutions to manage their mobile users and devices. As evidence of this are the following data points from the survey conducted for this white paper: Among those organizations that have not yet deployed an MDM solution, 36% indicated that they simply have not yet had a need for such as solution, despite the fact that the penetration of smartphones in non-mdm-enabled organizations is reasonably high today and has been growing at a rapid pace over the past few years. 29% of respondents that have not deployed an MDM solution indicated that the Native Exchange capability for managing mobile devices ActiveSync is good enough to satisfy their MDM requirements. A separate study by Osterman Research iii found that 90% of Exchange-enabled organizations view the native mobile policy management tools in Exchange as somewhat to very sufficient. One-quarter of organizations noted that they have not had a sufficient number of smartphones deployed in their organization to justify the effort involved in deploying an MDM solution. 21% indicated that MDM solutions have been too expensive to deploy, and an equal number indicated that there is simply not enough value in MDM platforms to justify the cost of deploying them. THE NEED INCREASED AWARENESS IN THE MDM SPACE It is also important to note that MDM is still a relatively nascent market compared to more established ones like email and collaboration. Having said, that, of the IT executives who are aware of the importance of MDM, these MDM solutions will take budgetary priority over many other developing platforms like unified communications or social media management solutions. Because of the immaturity of the market space, though, some decision makers not sufficiently familiar with all of the available solutions will thus consider only those MDM solutions that have the highest name recognition. For example, the survey conducted for this white paper (which surveyed only those knowledgeable about mobile issues in their organizations) asked, If you were going to switch to a new MDM system (or deploy one initially), which of the following your organization would most likely select? The most common response was BES, following by Microsoft Systems Center Mobile Device Manager, which together accounted for 83% of the responses. That is not to say that there isn t some merit in selecting either of these systems, but the plethora of viable alternatives was not cited in large numbers in our research. The rapid growth in the deployment of sophisticated MDM solutions will be driven by a number of issues with which IT departments are only just beginning to wrestle in the context of managing mobile devices: security, the need to move beyond ActiveSync and scalability. RESOLVING MOBILE MANAGEMENT ISSUES Over the course of the next two years, there will be a significant surge in the deployment of sophisticated MDM systems. For example, our research found that among those organizations that have not yet deployed an MDM platform, 32% will do so by early 2013 and another 24% will do so by early 2014. WHAT IS DRIVING THE NEED FOR IMPROVED MDM? The rapid growth in the deployment of sophisticated MDM solutions will be driven by a number of issues with which IT departments are only just beginning to wrestle in the context of managing mobile devices: security, the need to move beyond ActiveSync and scalability, each of which is discussed below: 1. SECURITY Growing potential for the loss of intellectual property The growing penetration of mobile devices used for critical business applications 2012 Osterman Research, Inc. 7
will increase the level of risk that organizations face. For example, as more data is sent and stored on mobile devices, the level of compliance risk grows because the physical loss of devices increases the likelihood of a data breach, loss of intellectual property and related problems. Moreover, increasing use of mobile devices in general increases the likelihood that intellectual property will be lost in the course of users sending content from their devices. Our research found that among those that would switch to a new MDM platform or adopt one for the first time, 34% cited the potential for loss of intellectual property as a key factor in their decision. The need for IT to regain control over mobile assets Mobile devices that are owned and controlled by individuals may be more difficult to remotely wipe when they are lost or misplaced since they are not under IT s direct control. This can expose corporate intellectual property to loss and may result in the breach of sensitive data, potentially triggering state, provincial or national data breach notification requirements; not to mention compliance problems under PCI DSS, Gramm-Leach-Bliley, etc. Retention of mobile data will become more important Content repositories including mobile email and other repositories contain a growing proportion of business records that must be preserved for long periods of time. Moreover, this content is increasingly requested during discovery proceedings and it must be produced when required. As a result, it is critical that all relevant electronic content be made available for e-discovery purposes. BEYOND ACTIVESYNC The need to move beyond native Exchange management There is a growing need for more features and capabilities than are available in native Exchange tools as the proportion of employees with smartphones increases. For organizations that have only a small number of smartphones in use, native Exchange management tools will often suffice; however, as smartphone penetration increases in an organization, coupled with more education about what higher end MDM platforms can do, native Exchange tools will be replaced. Our research found that among those organizations that would switch to a new MDM platform or adopt one for the first time, 36% indicated that native Exchange policies are too few and insufficient to meet their requirements. 2. SCALABILITY A need for improved performance and scalability Our research found that if organizations were to switch MDM platforms or adopt a new one, 54% would do so to improve the performance relative to their current system, while 43% would do so to improve the scalability of the solution. Managing mobile devices will consume more of IT s time As a result of the growing diversity in mobile platforms and operating systems, IT will be increasingly focused on managing mobile devices, largely because many lack robust solutions that can efficiently manage cross-platform environments. The absence of these tools will force IT to spend an increasing proportion of their time on mobile management activities, resulting in less time available for other initiatives. This will drive many organizations to deploy robust MDM solutions that can improve the efficiency of managing mobile devices. Our research found that among those organizations that would switch to a new MDM platform or adopt one for the first time, 36% indicated that native Exchange policies are too few and insufficient to meet their requirements. Mobile users are often more sensitive to downtime Increasing the difficulty associated with managing mobile devices is the fact that these devices tend to be used by higher profile employees like senior executives and salespeople who are typically less tolerant of downtime when trying to access mobile email or other corporate resources. The research conducted for this white paper found that only 9% of respondents are very confident that their mobile infrastructure is protected against downtime. BYOD will necessitate better MDM solutions Increasing the complexity in the management of mobile devices in the workplace 2012 Osterman Research, Inc. 8
is the growing number of personally owned devices that are being used by employees alongside company-supplied devices. This is making mobile device management, in many ways, a shared responsibility between formal IT staff and the employees they serve and creating risks and other problems as a result. Related to this is the fact that different mobile devices may need to be managed in different ways. For example, a company-provided smartphone may be subject to a different set of regulatory, legal and best practice considerations than a personally owned ipad. However, even personal devices can be subject to strict supervisory and retention rules. For example, the FINRA Regulatory Notice noted above states that FINRA expects members to prohibit, through policies and procedures, communications with the public for business purposes from employees own electronic devices unless the member is capable of supervising, receiving and retaining such communications. These types of requirements will further drive the need for deploying sophisticated MDM solutions that manage these types of granular requirements. ENTER THE CLOUD AND MANAGED SERVICES Our research found that there is significant interest in the use of cloud-based MDM solutions. For example, in response to a question about which MDM system would most likely be selected by those switching to a new MDM platform, 31% of those surveyed indicated that they would likely select a cloud-based solution, such as those offered by Zenprise, MobileIron, Airwatch, etc. In fact the cloud focus is even more pointed towards a private cloud option as 55% consider it important or extremely important that customer data hosted in a cloud offering cannot use a database that is shared with other customers. All of the reasons cited by respondents for an interest in cloud solutions are also directly applicable to managed services solutions. The reasons cited are simplified administration and maintenance (cited by 69% of those responding), reduced and predictable costs (39%), improved security (39%) and a desire not to use internal IT staff to service MDM (21%). In addition to the above data, there are two additional trends emerging, which are helping to create the perfect storm of MDM management issues: First, as higher-end MDM products creep into the marketplace, with them comes increased complexity to learn and use, putting further pressure on IT. Second, as the percentage of smartphones in the enterprise continues to increase there are more devices to actively manage overall. With regard to the second point, the IT staff requirements focused on managing mobile users and the costs associated with doing so continue to increase. For example, the research conducted for this white paper found that FTE staff requirements to manage smartphone users are increasing, from a median of 2.9 FTE staff member per 1,000 smartphone users in 2011 to 3.6 today and 4.0 in 2013. If we assume that the average, fully-burdened salary for an IT staff member was $80,000 in 2011 (and assuming 3% annual wage growth), just the labor cost for managing smartphone users is growing at a rapid pace, as shown in the figure below. Increasing the complexity in the management of mobile devices in the workplace is the growing number of personally owned devices that are being used by employees alongside companysupplied devices. This is making mobile device management, in many ways, a shared responsibility between formal IT staff and the employees they serve. 2012 Osterman Research, Inc. 9
Annual IT Labor Cost per Smartphone User SURVEY BACKGROUND Osterman Research conducted an in-depth survey during February 2012 among individuals who are knowledgeable about mobile device-related issues in their organizations. The goal of this research was to understand the problems, concerns and other issues that organizations face when attempting to manage mobile devices and integrate them with email systems, databases and various applications. There are a mean of 7,720 employees at each of the 117 organizations surveyed (median is 1,500) and 7,670 email users (median is 7,670). The survey base was dominated by organizations that have deployed Microsoft Exchange: 78% of the users in the organizations surveyed are using on-premise Exchange and 1% are using Office 365 or BPOS. FTE staff requirements to manage smartphone users are increasing, from a median of 2.9 FTE staff member per 1,000 smartphone users in 2011 to 3.6 today and 4.0 in 2013. 2012 Osterman Research, Inc. 10
ABOUT AZALEOS Azaleos Corporation provides managed email, collaboration and unified communications services available in private cloud, on-premise or mixed deployment architectures. Azaleos 24x7 managed services for Microsoft Exchange, SharePoint, Active Directory, Lync, and both BlackBerry Enterprise Server and AirWatch improve availability, security and performance, while reducing maintenance time and costs. The patented AzaleosX technology platform enables customers to maintain control over servers and data including their location, while uptime, maintenance, and support is proactively handled by certified experts in its network operations centers. Hundreds of companies from Fortune 500 to mid-market enterprises rely on Azaleos to manage their collaboration infrastructures and address issues before users ever know they exist. Azaleos is the largest provider of private cloud, on-premise and hybrid managed services in the communications and collaboration space and the go-to option for organizations who can t find a fit with Microsoft or Google public cloud solutions. A member of the National Systems Integrator program (NSI), Azaleos is one of Microsoft s top 34 partners in the United States and a member of both the Microsoft Exchange and SharePoint Technology Adoption Programs For more information visit www.azaleos.com. 2012 Osterman Research, Inc. All rights reserved. No part of this document may be reproduced in any form by any means, nor may it be distributed without the permission of Osterman Research, Inc., nor may it be resold or distributed by any entity other than Osterman Research, Inc., without prior written authorization of Osterman Research, Inc. Azaleos is the largest provider of private cloud, on-premise and hybrid managed services in the communications and collaboration space and the goto option for organizations who can t find a fit with Microsoft or Google public cloud solutions. Osterman Research, Inc. does not provide legal advice. Nothing in this document constitutes legal advice, nor shall this document or any software product or other offering referenced herein serve as a substitute for the reader s compliance with any laws (including but not limited to any act, statue, regulation, rule, directive, administrative order, executive order, etc. (collectively, Laws )) referenced in this document. If necessary, the reader should consult with competent legal counsel regarding any Laws referenced herein. Osterman Research, Inc. makes no representation or warranty regarding the completeness or accuracy of the information contained in this document. THIS DOCUMENT IS PROVIDED AS IS WITHOUT WARRANTY OF ANY KIND. ALL EXPRESS OR IMPLIED REPRESENTATIONS, CONDITIONS AND WARRANTIES, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, ARE DISCLAIMED, EXCEPT TO THE EXTENT THAT SUCH DISCLAIMERS ARE DETERMINED TO BE ILLEGAL. i ii iii Mobile Messaging Market Trends, 2011-2014; Osterman Research, Inc. Mobile Messaging Market Trends, 2011-2014; Osterman Research, Inc. Mobile Messaging Market Trends, 2011-2014; Osterman Research, Inc. 2012 Osterman Research, Inc. 11