Blog archive - December 2011

Earlier this year, Frost & Sullivan surveyed mobile and wireless purchase decision-makers in the North American small and mid-sized business (SMB) segment. A number of interesting findings surfaced, with all of them pointing to high SMB interest in mobile applications for their remote workers. Takeaways included: The value proposition around mobile enterprise applications is being successfully communicated to today’s small and mid-sized businesses. In addition, the substantial level of interest in mobility management platform products indicates an increasing level of mobile sophistication in the small and medium business (SMB) sector. Current mobile application users are very satisfied and represent a significant incremental sales opportunity, with half of current users planning to expand their deployments. Meanwhile, one quarter of SMBs do not currently use, but are planning to introduce, one or more mobile enterprise applications during the 2011-2013 time period. This “Planner” segment is convinced of the benefits of mobile solutions, and now needs to be actively motivated to actually make the purchase. The wireless carrier reigns as the preferred mobile applications partner with the SMB sector. This is not surprising given the high-touch relationship carriers maintain with SMBs. Out-of-box deployments are enjoyed by 24 percent to 35 percent of current users. When faced with a need to customize some aspect of their mobile solution, smaller businesses are more likely to handle this job in-house, rather than employ a third party. Hard-dollar return on investment metrics are noted by current application users. Reduced paperwork and increased worker productivity are cited most frequently. Lastly, SMBs have strong brand preferences in each application category: BlackBerry for mobile office, AT&T and Oracle for mobile sales force automation (SFA), and AT&T for mobile workforce management.

The North American mobile workforce management sector is a vigorously growing market, with distinct evolutionary phases. Mobile workforce management applications use wireless and location technologies to locate, track and manage mobile workers and their tasks. The U.S. is right in the middle of morphing to Stage IV, translating into the long-awaited mass adoption phase, and teeing up new challenges and participants. The Canadian market lags in terms of interest and deployments; however, it is expected to “catch up” in terms of portfolios and marketing effort during the next three to four years. This market is being positively driven by a multitude of high-impact factors, including: A quick, consistent, hard-dollar ROI The entry of major corporate software vendors Increasing emphasis on creating vertical-specific solutions Improving technology Growing line-of-business (LOB) involvement in the purchase decision At the same time, challenges continue to rear up and act as a brake on purchases and deployments. These include: Continued dampening impact of the current economy A perceived lack of business value High upfront investment requirements Concerns regarding corporate data security A lack of confidence and expertise on the part of the prospective customer Industry trends around product capabilities, pricing, targeted markets, platform vs. point solutions, key stakeholders, both new and maturing channels, technology advancements, and the purchase decision process are all normal for this phase in the larger adoption life cycle and continue to exhibit progress on all fronts. Wireless carriers continue to function as a key distribution channel for these solutions. And AT&T continues to provide the template for other carriers to benchmark against. AT&T presents a strategically well thought-out selection of solutions, addressing the unique needs of smaller vs. larger companies. The carrier has defined best-in-class partners, trained up and incented a professional sales force, and is implementing a strategy that will position it strongly against new market entrants and threats. Frost & Sullivan user and revenue forecasts have been updated to reflect growing participation by major corporate software vendors, who have partnered and acquired their way into the mobile enterprise applications sector in general and the mobile field service category in particular. Their sizeable customer bases and willingness to work with best-in-class mobility platform players make the large CSVs formidable competitors. Market share is expected to steadily shift from wireless carrier domination as major corporate software vendors and systems integrators become more active. Mobilizing field service workers continues to receive an abundant amount of attention from both IT and LOB heads. What used to be a purchase decision initiated and made by the IT department is now including active engagement by the individual line of business heads. LOBs are recognizing the impact of increasing visibility and value out in the field with their service workers. The individual business heads have the money and the motivation – and are flexing their muscles to force MRM purchases. Challenges -- and the resulting strategic and tactical recommendations -- differ by stakeholder segment. Given the vast amount of potential MRM users, this market promises substantial rewards to the stakeholders that survive.

The Mobile Asset Tracking category is part of a growing collection of premium next-generation wireless data applications that are designed for use by businesses. This is a category that is still defining itself; however, as a whole, it encompasses enterprise solutions that utilize wireless and location technology to remotely locate and track mobile and semi-stationary assets in the field. Some mobile asset tracking devices are the size of a pack of cigarettes -- small enough to place unobtrusively into shipping pallets or boxes. Other devices are larger and more brick-shaped, designed to be attached for prolonged periods of time to large pieces of company equipment out in the field. In addition to the hardware (typically a cellular modem with a GPS receiver, battery, and one or more sensors -- all packaged within a ruggedized outer casing), the mobile asset tracking solution is usually comprised of application software, a web-based administrative portal, data network service (for connectivity and location pings), and selected support services. Sensors can monitor motion, vibration, temperature, light, humidity, and tampering. Solutions can be pre-configured or customized. Businesses are exhibiting growing interest in tracking a broad range of asset types, including: Semi-stationary company equipment, such as trailers or containers, that are deployed for long periods of time in the same general location. Large pieces of company-owned equipment that are shifted often from place to place, such as generators, recycling bins, or construction equipment. High-value consumer products which are in transit from Point A for delivery to Point B, such as pharmaceuticals, electronics, or tobacco products. Cars or other vehicles which are under surveillance and being covertly tracked by law enforcement officials. These various asset types and use cases are driving the creation of an array of tracking devices. As a result, hardware can vary in terms of: Form factor (size, shape, ruggedization) Battery life (rechargeable or not) Portability Price Frequency of locates ("pings") Mobile asset tracking solutions appeal to all sizes of businesses and a broad range of vertical industries, including transportation, construction, energy, business services, and the government. Three major benefits emerge from this ability to shine a light on remote assets which had previously enjoyed no or low visiblity: Efficiency -- Especially in the context of mobile supply chain management, being able to know the real-time location and condition of a mobile asset results in cost savings on multiple fronts. It reduces the labor required to manually locate, inventory and report on products. It can also locate equipment that is closest to job sites, reducing transportation costs and employee downtime. Security -- Certain industries have been ripe for theft and shrinkage. Construction sites are prime examples. As are high-value consumer goods such as electronics and tobacco. Mobile asset tracking solutions alert when an asset is moved out of a pre-defined geofencing zone, and then help in subsequent asset recovery. Revenue Generation -- Businesses that track consumer goods in transit are beginning to quantify this capability's value-add and charge their customers for certain mobile asset tracking services, such as real-time status reports and alerts. Mobile asset tracking solutions are perfectly aligned with the wireless carriers' goal to increase the number of data connections and expand their overall revenue stream. These solutions are now viewed as a subset of the larger M2M category, which is receiving strong attention and resources from each of the carriers. Other large distribution channels are on the horizon, including major corporate software vendors and traditional security firms. Once the carriers, CSVs, and security companies are all fully engaged in this sector, application revenues are projected to rapidly increase.

2012 should be an interesting year for mobile sales force automation solutions in North America. This is a category that is still finding its way. Somewhat surprisingly, an earlier Frost & Sullivan survey revealed an average 52% adoption rate among U.S. and Canadian businesses (higher in the U.S., lower in Canada). In addition, there is room for quite a bit of near-term expansion with nearly 80% of North American businesses believing Mobile SFA is either Very or Somewhat Necessary in helping to meet their company goals. The Mobile SFA sector is being positively driven by a number of high-impact factors, including: Recognition on the part of traditional CRM vendors that mobile access can increase both utilization and seats Growing involvement by Sales and Marketing departments in the adoption decision Clearer ROI benefits More powerful networks and mobile devices A stronger focus on targeting the SMB sector -- resulting in more user- and price-friendly solutions At the same time, adoption challenges remain to be reckoned with. These include: A perceived lack of business value on the part of some segments Concerns regarding the security of corporate data A lack of user-friendliness in the product design High upfront investment requirements Anticipated implementation/deployment difficulties Customers are making their preferences known – and vendors are actually listening. Along with increased sensitivity around user-friendliness, the popularity of a variety of mobile operating systems, growing interest in tablets, and the financial advantages of SaaS (software as a service) and accompanying per-user/per-month pricing are being incorporated into Mobile SFA offers and plans. Still, a clear dichotomy exists between two Mobile SFA vendor camps: On one hand, there are the traditional CRM vendors who view mobility as an add-on to an already established product. Then there are the mobile-centric application developers and platform providers that view mobility as the starting point in any Mobile SFA design. While the CRM vendors have the advantage in terms of captive customer bases to sell to, their more mobile-centric competitors may ultimately offer the more optimal product. The next twelve months will witness a greater level of competition between these two stakeholder groups, as issues around pricing and feature sets continue to play out.

I recently developed an 87 slide Market Insight titled "Cybersecurity: A Global Economic Security Crisis" (9856-14) for our Network Security Research Practice that is available to Frost & Sullivan subscribers. In that market insight, there is a chapter titled "Identity Theft: Individuals Today-Organizations Tomorrow," which came to mind after I received an email from the New York Times along with another 8.6 million subscribers (email image attached). Although the company claims that the email was sent by mistake (second email image also attached), it still caused a lot of distress among NYT customers that thought their subscriptions were going to be canceled. This situation is something that the NYT would like everyone to quickly put behind them, but ever since speaking with executives that specialize in cybersecurity issues, odd emails and social media messages tend to stick in my mind. An excerpt from my Market Insight explains why: Cybersecurity professionals believe that the next step in the evolution of identity theft will target organizations so criminals can use the identity of companies and government agencies for illicit gain. In fact, identity theft in its current form is just the start of a series of attacks that will target vulnerabilities created over many years and as the threat evolves, the viability of organizations will be at risk. It is believed that hackers will be able to damage an individual’s cyber footprints so extensively that legacy IT systems won’t be able to tell the difference between the real person and the stolen identity. This means that eventually a stolen identity will be unrecoverable, which some in the cybersecurity community refer to as individual obliteration. Individual obliteration will be a real concern for individuals as well as organizations as techniques evolve over the next 5 years Fortunately for everyone, the NYT email was not a case of email hacking, phishing, or the beginnings of individual obliteration that could have generated false news stories, a 21st century Orson Welles-like uproar, and stock price swings that cyber criminals could benefit from. The unfortunate fact however, is that there are significant cybersecurity issues facing private enterprise and governments today that is damaging developed economies and changing the global economic landscape. Cyber espionage targeted at industry and governments is believed to be responsible for the largest shift in wealth in the history of the world, yet few people are aware that it is happening. This one of many reasons why Frost & Sullivan's Information and Communication Technologies Consulting Practice and the Frost & Sullivan Network Security Research Practice have teamed up to provide a closer look at cybersecurity issues in Q4 2011 and will continue to provide analysis and commentary in 2012.