Smart Money: Where There's Mobility, There's Margin
Solution providers big and small are tackling the explosion of mobile devices in the enterprise, whether those devices are proliferating via employer purchasing or through BYOD policies. And unlike the PC, there are plenty of options for operating systems, hardware designs and device sizes.
But that immense wave of choices can be a double-edged sword, as companies attempt to navigate a widening field of platforms and hardware to find the right mobile solution for their business. Enter the mobility-focused solution provider, which is establishing itself as the lone beacon to help guide companies through the maze.
Boston-based iCorps traditionally made most of its revenue around the data center, but in the past couple of years the business has shifted more toward mobility solutions. The company now works with a wide range of vendors, including Microsoft, Apple and BlackBerry, in the growing mobile market. Jeffery Lauria, director of technology at iCorps, said he's seen an enormous shift in how corporate America, whether small and midsize businesses or large enterprises, look at mobility.
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"We're seeing a lot more companies that were very restrictive about technology and devices open up more," Lauria said. "Having the latest and greatest technology helps companies attract younger talent. Plus, a lot of companies don't want to be in the business of purchasing devices for their employees."
The mobility market has become so big that some solution providers say it now rivals the growth and opportunity of cloud computing. Karl Volkman, chief technology officer at SRV Network, Chicago, said cloud and mobility are now neck and neck as SRV Network's two biggest businesses. Volkman said the two biggest drivers of mobility are the diversity of devices and operating systems and the lack of any real mobility strategies or BYOD policies in the majority of corporations.
"Most companies we see don't support BYOD policies just yet," he said. "They may be allowing employee-owned devices into the office, but they don't have any sort of plan for device management, security and data protection."
A recent study by the Ponemon Institute, commissioned by data backup vendor Acronis, revealed that 60 percent of companies don't have a BYOD policy, while 80 percent of companies haven't educated their employees about mobile devices or BYOD. And even when businesses deploy a BYOD strategy and empower employees to select and purchase their own mobile devices, solution providers say most companies recommend choosing from a small range of devices or platforms.
And those recommendations usually come from the solution provider. So how do mobility-focused VARs decide which mobile OS, device and apps are the right ones for clients? CRN takes a closer look at the boom of smartphones and tablets in the enterprise to see how solution providers are influencing the mobile revolution.
NEXT: BYOD And Mobile Moneymakers
Solution providers agree that BYOD, in no uncertain terms, has radically changed the mobile device landscape—even for companies that haven't deployed a true mobility or BYOD plan. The consumerization of IT has put the focus of mobility less on office environment compatibility and more on the device itself (ease of use, performance, functionality, interface and even device size).
Richard Cheston, master engineer and distinguished inventor at Lenovo, is one of the chief architects of the computer maker's products and believes consumerization has put the focus back on the user experience. "Users are driving mobility," Cheston said, even when it's the enterprise that owns the devices. "It's more attention toward the user to be more connected and productive. Mobility is rippling through organizations as the main initiative."
Steven Findlay, president of Noratek Solutions, Prince George, British Columbia, said even if employees aren't technically allowed to bring their own mobile devices into work, they're making their preferences known to IT decision-makers. "At the end of the day, BYOD is really benefiting the Apple and Android devices because that's what younger people want," he said.
XMatters, an application vendor that specializes in alert and notification management for mobile devices, has seen the mobility market shift drastically over the past decade. Abbas Haider Ali, chief technical officer at xMatters, said the shift from BlackBerry to Apple and now to Android in the commercial market with BYOD has complicated the mobility landscape for businesses.
"Unfortunately, there are very, very few customers with any kind of real enterprise mobility plan, whether it's BYOD or employer-driven," he said. "We don't see many companies with mobile device management services or support, and the ones that are usually are using first-generation tools and don't have a lot of experience with the different mobile OSes."
But that void, solution providers say, is an opportunity. Brian Dagan, senior systems support engineer at Connected Work- Place Solutions, Washington, D.C., said CWPS traditionally concentrated on managed services for corporate infrastructure. But now, he said, the company is moving beyond server and workstation management to mobile device management.
Why? Dagan explains CWPS has approximately 100 customers for its managed services practice, with a total of 6,000 servers and workstations. While that number may seem big, it's nothing compared with the sheer volume of mobile devices being used by the employees of those clients. "MDM is the new cloudlike buzzword," Dagan said. "It's a huge opportunity."
NEXT: Android Functionality, Flexibility And Ferocity
If there's one thing that has further complicated the mobile device landscape for businesses, it's been the extreme growth and popularity of Google's mobile operating system. Android initially was viewed in the commercial market as a fragmented platform and a potential security risk, due to plenty of bad press about malware disguised as legitimate apps in Google Play.
While the security concerns are still there—a recent study by British Telecom claimed one-third of Android apps contained some kind of malware—Android's market share has skyrocketed behind growing popularity with consumers and a range of supporting vendors such as Samsung, HTC, Lenovo and others. Like many solution providers focused on mobility, Colorado Computer Support has seen Android take off in the corporate world. Blake Schwank, CEO of Colorado Computer Support in Colorado Springs, said a year or two ago Apple was the clear leader in the mobile device market. But today, that's not the case. Schwank, like others, sees about a 50-50 split between Apple and Android today, with Google's mobile OS growing at a faster clip.
"BYOD is absolutely driving Android growth," Schwank said. "Android as an OS has gotten a heck of a lot easier to use— and cooler—in the last couple years compared to iOS." The numbers look even better for Android on a worldwide market scale; according to IDC's first-quarter smartphone market share study, Android and iOS combined for more than 92 percent of the entire OS market—but Google's OS earned an amazing 75 percent of the smartphone shipment share, leaving Apple with just 17.3 percent.
The numbers are nearly as strong for Android in the tablet market: IDC's first-quarter numbers show Android with 56.5 percent of all tablet shipments, as opposed to just 39.4 percent one year ago. Apple's iPad, meanwhile, saw its fortunes reversed as its share fell from 58.1 percent in the first quarter of 2012 to 39.6 percent this year.
So why has Android made such gains? And which vendors have most benefited from that growth? "It's very easy to use and manage and develop for, so it's the most popular choice with the IT guys," Findlay said. Noratek Solutions works with all of the major mobile platforms, from iOS and Android to BlackBerry 10 and Windows Phone, and Findlay said he's seen a definite trend around Android adoption.
"It's a toss-up between Android and Apple right now," Findlay said. "And I think it depends who you're selling to, if it's IT department or if it's line of business. If the IT guys are involved, they almost always go with Android. If not, the executives go with Apple." XMatters' Haider Ali agrees. He said xMatters still sees the majority of its customer base going with iOS devices but said Android's popularity and adoption recently have surged. "We've seen an overall trend of Android being the popular choice for consumers and tech-savvy people, and Apple for executives who prefer ease of use and a simpler experience," he said.
On the device side, Samsung has emerged as the strongest Android player with its Galaxy family of smartphones and tablets. According to IDC's first-quarter market-share study, Samsung owns 41 percent of the Android smartphone market and trails only Apple's iPad in total tablet market share with nearly 18 percent.
Samsung isn't alone, however. Lenovo and Asus have competing Android tablets, and the market has gotten more crowded recently as HP introduced its first Android device, the HP Slate 7.
Samsung is faring even better in the smartphone market. The company recently released its newest flagship smartphone, the Samsung Galaxy S4. Samsung is hoping to capitalize on consumer-level demand with a new B2B marketing campaign this year, which will in part promote the company's Galaxy brand around BYOD and MDM trends in the enterprise.
Lenovo’s Cheston said he has seen more and more customers actively utilize smartphones in the business environment. "I can do work related things, access company resources and I can improve my productivity at work and away from work." Cheston said. "And they've started getting a lot,of traction [among] C-level executives."
NEXT: Ease Of Use: The Apple Advantage
Apple's iPhone and iPad, however, have been the dominant devices in the commercial market for some time, due to iOS' popularity with executive users.
Ben Greisler, president of Apple partner Kadimac, Exton, Pa., believes it's the ease of use and general lack of hassles of the iOS experience that appeal to users. It also, he said, has the advantage of being older than competing platforms like Android and Windows Phone. "IOS is a maturing platform," Greisler said, "and better usability comes with that." But many solution providers believe that in terms of functionality, Android has leaped ahead of iOS. Colorado Computer Support's Schwank levies a frequent criticism at the mobile OS of late: For all its ease of use, iOS has failed to keep up with advancements of other mobile platforms, specifically Android, in areas such as multitasking and application management.
"There's no doubt in my mind that iOS has fallen behind Android as a mobile OS," he said. "Apple no longer has the majority in the commercial market. When you look at iOS, it really hasn't changed much at all over the years until just recently [with iOS 7]."
Usability and stability are still huge selling points for the iPhone and iPad, according to solution providers. But a couple of key differentiators for iOS in the past have become less relevant today. One of those was Apple's decided advantage with apps.
Solution providers said mobile applications were a key factor years ago in selecting the right smartphone, but apps have become less of a factor for a variety of reasons. First, the app market, which once favored Apple, has leveled out and more developers are building or porting apps for other mobile OSes (in the case of BlackBerry 10, the platform actually allows native Android apps to be easily ported to BB10).
The second factor, according to Greisler, is that businesses today have a better idea about what applications they need for their mobile devices. "Typically customers already know what kind of apps they need on their mobile devices," Greisler said. "A year or two ago, that wasn't the case. But now we spend more time integrating iOS and the mobile devices' data to the office environment instead of working on the apps."
IOS' second and more important differentiator is security; while Apple's mobile OS is generally considered a safer platform than Android, iOS recently has seen its share of high-profile security vulnerabilities and targeted attacks. In addition, there are a number of security tools and MDM software that allow solution providers and MSPs to protect both the device and the corporate network.
"We can secure and wipe and lock down an Android device today the same way we can do with other devices, so in that respect security isn't as big of a factor," Schwank said.
That's not to say security has become irrelevant in the mobile device revolution; solution providers say it's a key piece of their overall mobility solutions practice. For example, IBM launched its MobileFirst program, which ties together existing IBM products and services with a mobility focus, earlier this year with a focus on enterprise-level security for mobile devices.
"Our key recommendation for our types of customers at an enterprise-level conversation starts with, ’How do I secure everything?' " said Caleb Barlow, director of application, data and mobile security at IBM's Security Division.
But even though security is top of mind at companies such as IBM that are deploying and managing those mobile devices, it's not as big a priority for users. The consumerization of IT has created the "pro-sumer"—a professional-consumer hybrid user—and that's blurring the lines between enterprise and consumer use of mobile devices.
"The short answer is there isn't a difference [between enterprise and consumer]," Barlow said. "Let's put it this way: Most devices are consumer devices first."
NEXT: Business Class: Windows And BlackBerry
As Apple and Android duke it out on the consumer end of the mobility spectrum, two other companies are chipping away on the business end.
BlackBerry once owned the smartphone market but has fallen on difficult times as its keyboard-based devices were eclipsed by touch-screen devices such as the iPhone. Black- Berry is making a comeback play with its new BlackBerry 10 operating system and new touch-based smartphones.
iCorps' Lauria said BlackBerry is still a popular choice in certain verticals such as financial services and legal services, which have a greater focus on compliance issues and regulations. "For companies that really need to keep track of their emails and IMs and data, BlackBerry 10 is a strong option," he said.
But if employees are given the option of choosing their own smartphones, Lauria said, the vast majority will choose between the iPhone and an Android device. "BlackBerry still has a strong brand in the corporate market," Lauria said, "but that's not who's buying the devices now."
If BlackBerry smartphones aren't winning over users, then how is BlackBerry staying in the game? The company has made a strong push in the MDM software market with its BlackBerry Enterprise Service 10 and Black- Berry Secure Workspace for Android and Apple devices, and Lauria believes the company has a strong future there. But the MDM push, especially with Secure Workspace, could work against BlackBerry's smartphone business by giving Android and Apple devices more protection and thus eliminating a key differentiator for BlackBerry 10 devices. Microsoft, meanwhile, has a different dilemma. While Microsoft has the desktop monopoly, the software giant hasn't been able to translate that to success in the mobile world just yet. Windows Phone is battling BlackBerry for the third spot behind Android and iOS, and the smartphone platform has shown some signs of life lately; IDC reported Windows Phone shipments jumped more than 133 percent in the first quarter and surpassed BlackBerry for the third spot in the mobile OS smarket. Even with Microsoft's recent struggles with Surface and its mobile push, the company has a large partner base that's committed to making Windows 8 a success. Toronto-based Evron Computer Systems is one such partner.
"We recommend Windows 8 and Windows Phone for all of our mobile device deployments," Amit "Sunny" Sahni, vice president and CTO at Evron, said. "We have a strong mobility practice with a full-service management solution that works with Apple, BlackBerry and Android, but we recommend Windows to our clients especially if they're already a Windowsbased business."
Sahni said he's frustrated by Microsoft's channel strategy for its own Surface line of tablets (Microsoft has restricted Surface authorizations to just 10 U.S. large account resellers so far), but that hasn't deterred him from promoting other Windows 8 tablets and hybrid devices.
Tropical Computer Consultants, Hobe Sound, Fla., is another Microsoft partner. James Elkins, president and owner of Tropical Computer Consultants, is a believer in Windows 8 and recommends the operating system on tablets for clients because of its security features and business-class functionality. But Elkins admits that in the tablet world, Windows 8 can be an uphill battle because, despite its attributes, Microsoft's OS is lacking when it comes to the actual platform experience. "Windows 8 tablets may be more functional from a business standpoint," Elkins said, "but the ease of use and interface aren't nearly as good as Android."
Elkins has seen strong sales of Lenovo's Windows 8-based ThinkPad Tablet 2, for example, but overall, the consumerization of IT is driving more people toward iPad and Android tablets. "You can tell customers that Windows 8 tablets are more functional than iPads or Android devices, but they don't care," Elkins said. "They like using those devices, and they think they can get by with them from a business standpoint."
As for the integration advantage of having a complete Windows environment, solution providers say that's less of a factor as well. Colorado Computer Support's Schwank said there are plenty of software tools and MDM platforms—not to mention expert solution providers—that can bridge the gap between a Windows office environment and different mobile OSes. "There are challenges with any platform, but you don't have to have Windows devices if you have a Windows office environment," Schwank said. "In this day and age, most things play together."
NEXT: Device Dilemma
So, the mobile OS has been chosen. But what about the actual device? In the case of iOS and BlackBerry, the decision's already been made—the OSes are tied to proprietary hardware. But when it comes to Windows and Android, there are a host of OEM offerings and therefore more decisions to make, especially on the tablet side. While solution providers say most business users prefer a 10-inch display, there's a growing movement to smaller tablets. D&H Distributing, for example, said it's seen a huge increase in sales of 7-inch tablets such as the Google Nexus 7 from Asus. And with the growth of smaller tablets comes pricing pressure. "The $169 price point for HP's new [Slate 7] Android tablet is very aggressive," said Jeff Davis, senior vice president of sales at D&H, "and I think we're going to see more of that as the year goes on."
Consumer-focused Android tablets are selling for as low as $99 today, while on the high end of the scale, models like the Microsoft Surface Pro with 128 GB of storage can top $1,000. It's quite a range, but solution providers say pricing tends to be less of a factor with tablets than PCs. Why? In the case of the shift toward BYOD, users are willing to pay more for what they want. "It's more expensive for corporations to buy devices, but people have passion around their device and applications around it," said IBM's Barlow.
As for size and form factor, there are also larger tablets like Samsung's Windows 8-based ATIV Smart PC, which boasts an 11.6-inch display. Despite its name, the ATIV Smart PC is a tablet that can connect with a docking keyboard station and it's one of many new hybrid tablet-notebook models to arrive this year. HP, for example, recently unveiled not one but two new hybrid devices—the HP Split x2 for Windows 8 and the HP SlateBook x2 for Android.
Bill Hair, president of My Computer Guy in Rockwall, Texas, sees big potential for hybrid devices that combine the functionality of a notebook with the portability of a tablet. "Hybrids are big right now," Hair said, "and I think interest is growing." There are more form-factor criteria to be considered, too. Some tablet vendors are focusing more on battery life to appeal to business users. For example, the HP ElitePad comes with an expandable battery jacket and docking station, while the Dell Latitude 10 Windows 8 tablet is one of the few tablets around that has a replaceable battery.
All in all, there's a plethora of Windows 8 and Android tablets that are challenging the iPad's dominance. Solution providers say Samsung and Lenovo are two of the stronger contenders. "Lenovo is extremely popular right now," said Rob Robinson, owner and president of Computer Upgrade King in Midlothian, Va. "Along with Samsung, I'd say they're the two that are doing the best in the tablet market." But that demand could shift depending on the next great device or platform innovation, which is probably lurking just around the corner. If the mobility revolution has taught the channel anything—aside from the margin lesson—it's that things in the mobile devices market can, and probably will, change quickly.