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.

Focused-Based Services (FBS) are an emerging mobile category that will play a significant role in the next generation of location-based services (LBS). FBS are delivered based on what the user is looking at in real-time versus simply where the user is (location). In contrast to augmented reality, which combines location and mobile Internet search to provide information on landmarks in static environments, FBS enables the tracking and tagging of objects (or individuals) in moving or dynamic environments. In simple terms, FBS leverage an assortment of advanced location determination technologies to enable mobile users to point their phones at moving objects or people to access real-time information about their subject of interest. This information may include real time data, statistics, or user reviews of the subject (whether a physical or human asset) and clearly presents some very unique and lucrative avenues for hyper-targeted marketing promotions, advertising, and mobile coupons. Frost & Sullivan believes the initial traction of FBS is likely to occur in arenas or stadiums that support live events, as these venues can provide immediate revenue generating opportunities for mobile advertisers. For example, a mobile user attending a sporting event may focus his camera phone on a particular player for a photo, video, or tweet. The player’s sponsor might want the user to see ads for their products in the form of an enhanced augmented-reality overlay. A hyper-targeted mobile advertising or discount could then be sent directly to the user’s device where a real-time transaction can occur. Advertisers, teams, or event organizers can build a variety of unique value-added benefits beyond simply advertising, such as providing real time player or team statistics when a user focuses on a given player or object in the venue. A powerful analytics platform will be a critical element of the FBS ecosystem to enable marketers and sponsors to best position ads for real-time shifts in crowd momentum and user engagement behaviors. Jon Fisher, CEO of CrowdOptic, a pioneer in the FBS space, explains, “If one asset is being viewed five times more, you can charge five times more. In a baseball game, for example, you might think a banner behind home plate is the best asset, but what’s the second or third best asset? We can validate that data,” Fisher says. “It’s a whole new advertising form.” The concept of FBS will likely evolve beyond sporting events and into a variety of environments that inherently have large mobile crowd-sourcing traffic (i.e. metropolitan areas, theme parks, airports, shopping malls, tourist sites, subways etc). FBS represent the convergence of location based services, augmented reality, and mobile advertising and should be considered an attractive growth opportunity for a variety of market participants in the mobile & wireless space.

Facebook will likely make close to 20 acquisitions in 2011, up from 10 in 2010 (and one in 2009). To date, the pattern with Facebook acquisitions has been to hire the executive and/or development team in order to acquire their domain expertise, rather than to simply rebrand a service or new technology. Nevertheless, many of Facebook ’11 acquisitions provide some very interesting clues towards their future mobile direction and strategy. Strobe Acquisition (Nov 10th, 2011): Platform for Mobile Apps Using HTML5 Strobe has developed a HTML5 (or web-based) platform for mobile application developement. Facebook currently supports application developement for iOS, Android, and the mobile version of their website. With the aquisition of Strobe, Facebook has aquired the tools to create a more complete and comprehrensive platform that can support device agnostic mobile applications. Potential Implication: Simply building a stand-alone mobile application is not necessarily a true 'mobile strategy', however, building or acquiring a platform is. The inherent advantage of a HTML5 platform is that developers are not constrained to build multiple versions of their application for different platforms. The Strobe aquisition could enable Facebook to leverage cross-platorm application development, allow users to discover applications directly via Facebook's social channel, and encourage both users and developers to participate in the Facebook Credits payment system. Thus, a Facebook HTML5 platform could evolve to compete directly with Google’s Android Market and the App Store. Rel8tion Acquisition (Jan 25th, 2011): Localized Mobile Advertising + Analytics Rel8tion focuses on location and demographics-based ad targeting tools for mobile devices. Potential Implication: Facebook currently has monetized mobile users through its LBS promotions system, Facebook Deals, which presents users coupons and discounts at local businesses when they 'check-in' through Places. With web advertising currently generating the lion's share of Facebook’s revenues, it is inevitable that mobile advertising will become an even more important revenue source going forwad. Facebook continues to entice users to expose more location-based details related to personal and workplace environments. This data, coupled with advancements in mobile location determination technologies, will likely be leveraged by Facebook to furher enhance location-based advertising opprtunities. Digital Staircase Acquisition (Nov 9th 2011): Visual Editing Tools for Mobile Users Allows users to edit photos & video and create professional-looking image effects on a mobile device. Digital Staircase has already introduced a number of premium photo/video applications for iOS that have seen traction in the App Store ecoystem such as SmartSplice, StereoCam and MovieCam. Facebook is likely to discontinue these applications for iOS and leverage the visual editing tools from the aquisition to create a stand-alone customized Facebook application. Potential Implication: Expect a Facebook branded photo editing application for smartphones to materialize in the near future. With Facebook users uploading an estimated 250 million photos a day and over 350 million mobile users, an extremely large addressable market exists for this type of application.

Is Google's rumored announcement of "very, very large" Google Apps customers the first death knell for Enterprise Hardware vendors like Avaya, Siemens, Alcaltel Lucent, even Cisco? The rumors are reported here http://www.mercurynews.com/top-stories/ci_19531412 Imagine a world where a typical desk worker uses Google Apps for productivity, Google Talk for chat, UM and video conferencing, and they access those services through an Android phone, an Apple tablet, and either an inexpensive laptop or a MacBook. For voice calls, they use their smartphone’s native calling, or maybe even Skype or a Google talk application. That world may not be that far away. Companies that have relied on comfortable revenue streams from expensive desktop phone products and core systems seem to have missed the boat. Tight integration with super capable employee owned devices, like iPhones or Android phones, may deliver better UM integration than the incumbents can deliver. Low, predictable costs will give employees devices that they want to own and carry everywhere. Apple's model of native applications frees enterprise of many of the security risks that have plagued Wintel machines for decades, and Google's cloud model, layered on top of these applications allows enterprises to deploy tightly integrated productivity apps easily, quickly and inexpensively. To me, the missing piece of the puzzle is SalesForce. The various SalesForce tools along with the ability to buy prebuilt force.com applications or build your own enterprise applications is a critical piece that is missing from Google Apps. Were Google to partner up with SalesForce (or even buy them....) companies could run their entire enterprise on a reliable, predictable cost, platform with real delivery of the CEBP that current enterprise vendors tout. Will Google partner here, or try to develop a platform to compete with force.com? Although a key watchword of the 1990s was CTI (Computer Telephony Integration) it never really worked right and never recognized its potential. When you next see an ad for a mobile phone, listen for the specs. Dual Core 1Ghz Processors, 64 Gigabytes of Storage, 4G mobile networking, 802.11 b/g/n, it’s not a phone, it is not a limited handheld computer. It is a powerful mobile computer. It makes no sense to think about integrating the laptop to an expensive desktop phone system, the integration is already done and it’s not integration between a laptop and a desktop phone, it is integration of the smartphone with itself by way of the native applications. We live in a time of economic uncertainty, if you listen to the bears, this will be the case for some time. Enterprises are being forced by young people entering the workforce to provide mobile work solutions so they have to deploy smartphones. Those same enterprises are looking for places to save money, and spending to deploy desktop IP phones, spending to deploy an IP PBX, and then spending on people to maintain those superfluous products will all look like attractive costs to cut. Is my vision upon us or a pipe dream? My colleague Alaa Sayeed is still quite optimistic about phone shipment growth in his World Enterprise Telephony Platform and Endpoint Markets which can be found here. http://www.frost.com/prod/servlet/report-toc.pag?repid=N942-01-00-00-00 . That said, these deals could be game changers. All that said, the role of the "land line phone" will never go away completely. Professionals in carpeted environments will demand mobility, but many environments will benefit from fixed devices. Retail, manufacturing, warehouses, hospitality, hospitals all look for tools for mobility, but even ruggedized devices get lost and broken. Many employees and customers in these spaces need a communications device that they can always find and use in a specific spot. The big question is, can our traditional enterprise hardware vendors evolve quickly enough to keep up with the dynamic nature of companies like Google and SalesForce that have embraced tight integration with mobility and deliver it through cloud based services or can they survive on the increasingly niche markets that will still want fixed telephony?

Thanksgiving is one of the biggest travel days of the year, and for my family that means a weeklong trip to visit the grandparents at their home in Alpine CA. For those that don’t know California geography, Alpine is a very small rural community about 40 miles east of San Diego. While San Diego may be home to some wireless superpowers, the mountainous, rural terrain of Alpine is tough on mobile reception. My parents’ home, a long narrow stucco house perched on the edge of the Cleveland National Forest is a worst case scenario for getting work done using mobile devices. In the past I have tried multiple solutions to enable work from this hostile environment. They have ranged from using Cisco’s IP communicator on my laptop, to taking advantage of T-Mobile’s UMA calling features on my Blackberry. This year I planned ahead and was able to procure an AT&T 3G Microcell to do things right. Upon arrival in Alpine, we got the AT&T 3G Microcell out of the box. It is a very attractive Cisco unit, with a striking white and orange enclosure. We followed the instructions carefully and the unit exhibited the flashing green lights as explained in the instructions. Although the quick start guide had easy to follow instructions for the physical connections of the 3G Microcell, there was one key issue. The instructions I received stated to visit “att.com/3gMicrocell-activate”. However, typing this address into the browser bar redirects to the main AT&T wireless page. Perhaps I received an old set of instructions. After some searching, browsing, swearing and guesswork, www.att.com/3gmicrocell took us nicely to a page where the device could be activated. The quick start guide states that once it is all connected that we should wait 90 minutes while the 3G Microcell configures itself, downloads firmware updates etc. We waited dutifully, and waited and waited. Eventually, nothing happened. We left the 3G Microcell to its own devices for 24 hours and still nothing. After that we tried multiple iterations of cycling power and different connection Ethernet wiring configurations. Eventually, one final cycle of power and everything worked great. A brief site survey of the house showed us that the full area of the 3400 square now got a full five bars. Calls immediately connected and voice quality was fantastic. In my mind, users in rural settings really have two legitimate options for solving poor service issues. One they can use a Picocell solution as covered in Frost & Sullivan’s World Femtocell and Picocell Market study http://www.frost.com/n8ba or they can use a tool to make calls over WiFi like T-Mobile’s UMA feature or Skype. There seem to be pro’s and con’s to both solutions. Picocell Pro’s as offered by AT&T’s 3G Microcell Calls are made on the native 3G network. Calls roam seamlessly from the 3G Microcell to the AT&T 3G network. You don’t need to pay an additional plan fee to use the Microcell. The 3G Microcell has strong security. Only whitelisted users can make calls on your 3G Microcell and use your backhaul. The 3G Microcell has well thought out 911 capabilities with built in GPS. Device connectivity is managed centrally from a web site without having to touch the users’ phone. Picocell Con’s as offered by AT&T’s 3G Microcell AT&T generally requires the user to purchase the 3G Microcell equipment. You use your plan minutes when talking on the 3G Microcell. Good when you are using unlimited minutes, but bad if you are making a call that costs minutes or incurs a toll. An additional “Unlimited Microcell Calling” feature must be purchased to avoid using minutes. Users need to be careful of their device’s data settings to be sure that their device is using their WiFi connection for data not the potentially more expensive 3G connection. This is always true, but with the 3G Microcell activated, users may now connect to the 3G network for data where they used to only have WiFi service. AT&T limits the number of devices that may be simultaneously registered to the 3G Microcell to 10. T-Mobile UMA WiFi calling Pro’s UMA calls do not draw down plan minutes or incur additional toll fees. UMA calls work over any WiFi connection. Users take advantage of the service at home, or when traveling. T-Mobile UMA WiFi calling Con’s In my experience roaming from UMA to the 3G network always fails and calls are dropped. Users must plan very carefully when they initiate calls to avoid dropping important conversations. The tools provided on my BlackBerry Bold are functional, but not necessarily easy enough to use in this regard. Voice quality is generally good, but does not seem to deliver the same QoS as the picocell solutions. WiFi must be configured on the users device for every new site. All in all both solutions solve the issue of poor 3G network coverage at a given site. In my experience the 3G Microcell is a much better solution for business users who cannot afford to drop calls as they move from site to site. The UMA calling features, or even using a Skype client on a smart phone are a passable option for consumer users who are focused on toll avoidance or minimizing their plan costs. The set-up of the Microcell was no more confusing or complicated than setting up a WiFi router. From a business perspective, the 3G microcell management is attractive because one does not need to touch the device itself. The AT&T 3G Microcell is a very elegant solution. It solves a real problem faced by many users. It is easy to use and configure. It has huge safety advantages due to the 911 functionality especially for uses that have no land line. All those things said, I think AT&T, and other carriers are being somewhat greedy in how they handle billing. The customer is providing backhaul, and in many cases the customer must buy the equipment. It seems fair to me that since the customer is covering the capex and opex spend that they shouldn’t have to pay for minutes or data.