Demand for enterprise mobility should continue to ramp slowly this year, as companies move cautiously on well-thought-out strategies, according to two analysts who study the space.
Coincidentally, both analysts – Kitty Weldon at Current Analysis and Bill Hughes at In-Stat – said that enterprise initiatives were “all over the map” based on a variety of factors such as the most-sought applications, a company’s size and complexity, whether mobility is sought for a division or companywide and how mobility is paid for.
Both analysts said they were unaware of any solid survey data that would paint a consistent portrait of corporate decision-making, device or services purchasing in the space and, thus, trend forecasts backed by data are elusive. Most examples are anecdotal, they said separately. Yet both shared a few observations about the months ahead based on recent history and tangential studies.
Security, budget concerns remain
“The wireless industry runs the risk of overstating the growth of mobile data used by businesses,” Hughes said flatly, in a year-end report on the topic.
Hughes found that, among corporate decision-makers, interest is strong while implementation lags. In part, information technology managers are enthusiastic, but concerned about security issues and working under intense budget constraints.
Wireless carriers and those in the ecosystem should temper expectations, he said in an interview.
“Corporations change strategy regularly – primarily the reimbursement approach,” Hughes said.
The In-Stat analyst said that studies show corporations would find it cost-effective to pay for wireless use by employees, who tend to be more productive under that scenario. Requiring workers to seek reimbursement via expense accounts is costing American corporations billions of dollars, Hughes found.
Once a company adopts a formal policy toward mobile use of proprietary data, however, there’s a dramatic shift toward “corporate liability” based on security concerns, said the In-Stat analyst.
Voice and e-mail services are the simplest horizontal applications to implement and have seen solid growth that’s leveling off, Hughes said, and more complex applications require time for strategic thinking, return on investment calculations and pilot programs. Thus the mobile enterprise ecosystem should look to an under 30% compound annual growth rate for each of the next five years, the In-Stat analyst forecast. Investments by carriers and others should be made accordingly.
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Wireless nearing wireline parity
According to a survey of I.T. managers on voice services alone, the amount of money spent on wireless services is beginning to approach that spent on wireline and the two will reach parity in two years, Hughes said. As executives grasp that a substantial amount of telecom expense is “backdoor spending” – that is, accumulating through expensed wireless services – corporations will act on mobile plans and policies.
Meanwhile, he said, “it’s every man or department for himself.” Tension between sales teams and I.T. managers is a common anecdote and “corporate politics have an amazing influence on this process.”
Weldon concurred that supply exceeds demand – not unusual in a nascent technology where services need to be in place first, she said. The major wireless carriers, overall, haven’t made a lot of new managed service announcements, though several have wireline and wireless divisions and expertise in the former should carry over to the latter. But the “sheer number of announcements” from middleware vendors, for instance, means some consolidation is likely to take place in that sector. That may make the market simpler and more attractive to businesses now overwhelmed by a plethora of choices, Weldon said.
FMC on the horizon
Weldon said that several areas of enterprise mobility merit scrutiny going forward. U.S. carriers have yet to determine their business cases for promoting fixed-mobile convergence, which should in theory save corporations money and add convenience. Meanwhile, traditional vendors such as Cisco Systems, Motorola Inc., Siemens, Avaya and a fresh crop of “new age” providers are working FMC.
“Supposedly, 2008 is ‘the year for dual-mode, cellular and Wi-Fi,” Weldon said. “In reality, it may be that ’08 brings the service announcements and ’09 brings adoption.”
The current embrace of all things “open” may also bring some confusion to corporate deliberations on going mobile, as the number of devices potentially available to endusers skyrockets.
“It could be a nightmare for I.T.,” Weldon said, “with implications for enterprise mobility vendors.”