Enterprise mobility - thriving or sputtering?

July 10, 2013

Dyslexia mode

Summary:: Since I last wrote about the struggle of enterprise mobile storefronts, I’ve continued to grapple with the confusing state of enterprise mobility. To get some perspective, I went on the hunt for mobility studies that might make sense of the contradictions.

Since I last wrote about the struggle of enterprise mobile storefronts, I've continued to grapple with the confusing state of enterprise mobility. Meantime, Dennis Howlett and I completed the next phase in our video series on SAP startups, many of which are either mobile-focused, or consider mobile deployments central to their strategy.

Although some enterprise mobility startups are a bit, shall we say, UI challenged, for the most part I've been very impressed by their ability to apply mobile solutions to industry pain points and re-imagine processes for on-the-go workers.

But the startups have struggled with pure mobile apps plays, largely because of difficulties around enterprise mobile storefronts and pricing. On the pricing side, you can imagine per user pricing for high caliber industry functionality that would blow the mind of the typical App Store shopper.

But that pricing hasn't sorted itself, perhaps because consumer apps habits have conditioned buyers to think about apps with modest pricing for scale. The short-term result? The most successful enterprise mobile apps tend to be cross-industry workflow and approval types that can be priced for the enterprise masses.

That doesn't help startups embedding deep industry know-how into their apps while they pursue viable pricing models and apps marketplaces. Another challenge? To attract developers, enterprise mobility must demonstrate broad apps demand. To get some perspective, I went on the hunt for mobility studies that might make sense of the contradictions.

The Good Technology Mobility Index Report Q1 2013 (PDF link - June 5, 2013) predicts that mobile devices used within the enterprise will continue to diversify and grow throughout 2013. The report concludes that adoption will ‘start to more closely align with consumer trends, as businesses continue to realize the productivity gains as well as top and bottom line increases.’ However, the report stops short of directly addressing the health of the enterprise app space.

Good Technology's report uses data from more than 5,000 different companies, all drawn from their own mobile security customer base, a typical limitation of these kinds of surveys. But with half of the Fortune 100 companies in its stable,Good’s take on device trends does have some enterprise credibility.

The most compelling aspects of the Good report, at least in terms of who’s firing up gadgets that might attract enterprise app activity, are the numbers for device adoption by industry/sector:

Financial Services led the way with 24% of all activations in Q1, though that’s down 10% when compared to Q4 2012. Next were Business and Professional Services (19%), Insurance (9%) and Public Sector/Government (7% -- nearly double the previous quarter’s 4%). Speaking of which, guess who announced, just last month that they’re launching an app storefront? None other than the U.S. Department of Defense (to the tune of $2.9 million) – one sign that enterprise app development might be morphing into a higher-value target.
Wholesale & Retail increased activations to 6%, Life Sciences and Healthcare stayed steady and High Tech saw a decline of about 2%. That decreasing high tech number may suggest that some of the easier stuff to accomplish, like apps for sales force automation, service employee field devices, and plant level employee activation is leveling off.
Education, Hospitality and Real Estate sectors showed up in the activations list for the first time in Good's study for Q1 2013. Though with each at less than 1% of total activations, overall numbers appear negligible at this point.

The above industry numbers, when contrasted with those from a Citrix mobility report (PDF) which examined the previous quarter (4Q 2012), indicate that most of the advancing sectors still skew more toward the iOS platform.

The notable exceptions, which lean much more heavily toward Android, are also those with the medium to smaller percentages of adoptions: Heathcare (4.3% in Q1), Communcation Services (2.7%) and Transportation (1%).

One difference between consumer and enterprise mobility is the contrast in iOS versus Android adoption. Android has not gained ground on iOS in the enterprise like it has in the consumer market. The high level of iOs adoption has implications for administrators and developers alike. The Good Report data reinforces the iOS-over-Android enterprise trend, though Android is showing a steady creep upward that's worth monitoring: Among the report’s iOS-versus-Android findings:

Apple’s iOS platform again sits atop the leader board when it comes to the total number of device activations. The company leads in five different device categories, despite its market share of activations decreasing by 5% year-over-year.
Android’s market share picked up the 5% of activations that Apple lost.
Apple’s iPhone 5 is the preferred device among business users, followed by, in order, the iPhone 4S, the latest gen iPads, the iPad 2 and the iPhone 3GS. Samsung’s Galaxy S3 came in sixth place with just 5% of all users.
The overall number of device activations for Q1 2013 increased by almost 30% Y-O-Y. This includes holiday season BYOD (bring-your-own-device) purchases that employees introduced for workplace activation after the start of the year.

No real surprises, with Android continuing to slowly gain on Apple, albeit at a yearly pace that was less than half that of the previous quarter, when Citirix reported Android as having enjoyed an 11% increase in market share Q-O-Q.

The Good report doesn’t mention anything about another growing trend – app blacklisting/whitelisting, whereby companies respectively block or enable employee mobile devices to access certain apps. The Citrix report from Q4 ‘12 found that 18% of enterprise customers had deployed some kind of black/white-listing policy. Typical blacklisting victims are not a surprise (Facebook, Angry Birds and YouTube); frequently whitelisted apps/sites include Evernote, Google Chrome and Adobe Reader. Staying on the happy side of that list is a growing concern for enterprise apps developers.

It's proving not to be as simple as 'if you build it, they will come.' As my diginomica colleague Phil Wainewright pointed out:

Many enterprises have made the mistake of rushing to port their existing applications to mobile without first thinking through the potential to do things differently. Rehashing existing apps is quick and painless using HTML5, but the result is almost always a disappointment for users unless they make use of native capabilities on the devices.

What’s more, says blogger Jesus Rodriguez of ReadWrite, 'In order to enable a mobile-first enterprise experience, organizations need to build the infrastructure to contextualize business data so that it can be effectively consumed on enterprise mobile applications.” Which raises the question: if you build the infrastructure, will the apps flourish? And how will they be purchased and consumed? We don't have a satisfying answer yet.

But there are signs that mobile developers are shifting their attention to the enterprise regardless. In a ReadWrite follow-on, Dan Rowinski notes that between Q4 of 2010 and Q2 of 2013, the percentage of developers focused on enterprise apps has expanded from 29.3% to 42.7%, with consumer-focused mobile developers shrinking in percentage over that same period from 70.7% to 57.2%.

There's a fairly big caveat: the numbers Rowinski cites come from Appcelerator, which measured among 6,046 users of its Titanium Studio IDE (integrated developer environment) and other tools. Rowinski notes that Appcelerator’s corporate focus has moved more into enterprise services during those last three years. Any survey of its developer base would likely reflect some aspects of that shift.

It's a trend worth tracking. Stories about the struggle to make money with consumer iOS apps keep cropping up, including this grim piece from 2012 that found 59% of iPhone and iPad developers don't break even on costs. That translates to a lot of skilled but disillusioned iOS developers that could be drawn to greener enterprise pastures where iOS still dominates.

If the apps storefront data is still sluggish and murky, one area that appears to be gaining momentum more quickly is Machine to Machine (M2M). Baseline Mag quotes ABI Research as saying that upwards of 50 billion M2M connections will be in place by 2020. For those connections to be of value, enterprises are going to have to adopt new technologies – including the apps that interface with them – as well as to revamp and expand governance policies.

A recent edition of Kevin Benedict's M2M News Weekly compiles plenty of M2M activity. Example:

Between now and the end of 2015, RWE and competitors like British Gas, E.ON, Scottish & Southern Energy, EDF Energy and First Utility -- the “big six” energy retailers that control the majority of the U.K.’s market -- are expected to deploy as many as two million smart meters, out of the eventual 50 million or so mandated for rollout by 2020.

That means enterprise work galore, or headaches depending on your job role, managing massive data streams and integrating with back end systems. Expect plenty of 'Internet of Things' keynote buzz at an enterprise show near you.

Verdict

With enterprise giants like SAP working with startups to surface fresh thinking in a new breed of apps, and Infor reporting that their customers want to build their own mobile apps, 'one-app-fits-all' is not going to cut it for enterprise mobility. Machine-to-machine may be the trend that pushes the infrastructure work forward, but many companies are still evaluating how to build on early mobile rollouts. Enterprise mobility is trending positive, but questions remain.

Disclosure: SAP is a diginomica premier partner.