Competitive pressures are leading American companies to adopt mobility for the obvious reasons: increasing productivity, decreasing costs and distinguishing themselves among their competitors.
The top three carriers in the United States – AT&T Mobility, Verizon Wireless and Sprint Nextel Corp. – are attempting to secure these enterprise customers as the carriers seek reliable, data-driven revenue streams.
Data revenue from enterprise use – in contrast to the fickle consumer, whose data expense is based on discretionary income – is viewed as a solid bet.
Drivers of enterprise mobility adoption include the advent of widespread 3G network coverage in the U.S. and abroad, improved latency as 2.5G gives way to 3G and a clearer picture of security needs and the technology to meet those needs, according to Lisa Pierce, a VP at Forrester Research.
The carriers do not offer up revenue figures for their enterprise initiatives, nor do they discuss market share or estimates of the size of the market today or its potential. Among the reasons for this reticence: reluctance to tip one’s hand to competitors and set benchmarks for beatings by Wall Street analysts, Pierce said.
However, according to a Forrester assessment, in 2007, 30% of North American enterprises reported using 2.5G/3G services on a regular basis. Pierce said that that estimate focused only on corporate-liable cases – where the enterprise pays for employee use of wireless services – and when individual-liable use is factored in, usage is likely higher.
Bill Hughes, analyst at In-Stat, has found that productivity rises at a reasonable cost as corporations unflinchingly pay for wireless service, while corporations that require individuals to pay (or get reimbursed via expense account) do not see effective returns on investment. Hughes has said that as corporations understand this factor, corporateliable wireless adoption will accelerate.
Horizontals and verticals
Enterprise applications fall into two categories. Horizontal applications such as email and other messaging options have most rapidly penetrated the enterprise. Vertical solutions – industry- or company-specific applications – also are gaining in adoption, but complexity, cost and a plethora of suppliers may hamper uptake.
Many enterprises, carriers and analysts said, typically get started with a pilot project to mobilize sales forces, for instance, to immediately boost revenue. Other “silo” applications may follow before the enterprise decides that it needs a unified, flexible mobility platform that can serve a company-wide strategy.
The prospects for those who serve this growing market are huge, carriers and analysts agree. And that has led to a complex, highly segmented and well-populated ecosystem of carriers, systems integrators, cost-management specialists and pure-play application developers. Supply currently exceeds demand – not unusual in a nascent market where services must be available for demand to grow, according to Kitty Weldon, analyst at Current Analysis.
Carriers must leverage relations with corporate parents and siblings to unify and bundle wireline/wireless offerings and other value-added opportunities, Weldon added. Otherwise, “they leave money on the table,” she said.
Carrier commonalities
These market conditions, the market’s potential and the carriers’ traditional role as network operators have led to certain commonalities among the carriers’ approaches to the enterprise, carriers and analysts agreed – though key differences arise based on the carriers’ individual organizational legacies and choice of technologies.
The enterprise – in contrast to small- and medium-sized businesses – requires special carrier teams that target the largest players in a slew of vertical industries where specialized applications are needed and multiple, complex back-end data systems often are in use.
The laundry list of verticals is familiar: white-collar industries such as finance and insurance, blue-collar industries such as transportation, manufacturing and construction and special animals such as government, health care and education all present opportunities for mobility.
All three top carriers field special teams of sales and marketing personnel, often populated with experts on the verticals – and the highly differentiated sub-verticals – they approach. A vertical such as transportation, for instance, has sub-verticals such as fleet management and asset tracking, each potentially requiring a different technology approach which then must be tailored to the individual company’s operations. Carriers often approach this market segmentation by using Standard Industry Codes (SICs), which provide a logical breakdown to what could be a confusing plethora of distinctions. Thus the need for carriers to have a deep familiarity with perhaps a score of verticals and many times that number of sub-verticals.
The carriers also develop a vast array of partnerships for systems integration and application development that is not their natural strong suit. That involves giant systems integrators such the IBMs and Accentures of the world, but also with specialized pure-play vendors that may, for instance, focus on specific applications such as salesforce automation or fleet management.
Further complicating the picture is the fact that all three carriers may rely on the same partners. And, analysts, said, most enterprises have relationships with more than one carrier and may decide to spread their mobility business among more than one carrier. That requires the carriers to differentiate themselves and put their best foot forward.
Sprint Nextel’s approach
Sprint Nextel Corp. is widely credited with having the longest legacy in mobilizing the enterprise thanks to Nextel Communication Inc.’s anchor push-to-talk solution.
Tim Donahue, VP for business marketing at Sprint Nextel, said that carrier’s differentiators include the expanded footprint of its broadband network – with WiMAX on the horizon – and the depth of its understanding of verticals, sub-verticals and individual companies.
“We consider our market approach and depth of application development capability to be a strategic advantage,” Donahue said.
Sprint Nextel’s internal “Strategic Alliance Group” addresses the carrier’s array of partnerships, which includes large integrators who already have a holistic understanding of an enterprise client’s business. Other concerns: data security and archiving is required by law and often performed by the carrier’s partner.
Donahue said Sprint Nextel sees sustainable revenue in the mobile enterprise space.
“The growth trajectory for the mobile enterprise market is higher than for consumers, based on the economic benefit of mobilizing data,” Donahue said. “Mobile enterprise data typically has a ROI factor. The consumer market is based on discretionary income.”
In enterprise mobility, the best metric is “data spend” rather than “number of subscribers,” Donahue added.
Verizon Wireless’ take
Verizon Wireless is working to provide the bulk of enterprise customers’ needs, while partnering with experts for customization of mobile applications, according to Catherine Sugarbroad, associate director of business segmentation at the carrier.
“We provide a broad suite of solutions and software expertise,” Sugarbroad said. “We have an extensive catalogue of partners for vertical applications such as sales-force automation, fleet management – you name it.”
Verizon Business, on the wireline side, is an important partner to serve “corridor warriors” who venture away from their desks, but remain on campus.
Verizon Wireless’ sales teams are organized by vertical industries and focus on “premier solutions” and the unique needs of each particular customer. For instance, a construction company has underlying needs for enhancing safety, quality control and cost management. An internal technical board composed of representatives from lar
ge enterprise customers provides feedback on solutions and helps the carrier define its priorities within vertical industries.
Sugarbroad sees a pattern to current enterprise mobility uptake.
“Previously, we saw one-off business needs for mobility – a particular problem needed resolution,” she said. “Today, enterprises may realize they’ve got three or four silo applications and now they want a mobility platform for a single solution. They’re looking for a flexible solution for a variety of business applications and to reduce the complexity of multiple back-end systems.”
AT&T Mobility
According to John Kampfe, director of media and analyst relations at AT&T Mobility, the carrier benefited from predecessor Cingular Wireless L.L.C.’s long experience in serving enterprise and today is the leading provider of Research In Motion Ltd.’s BlackBerry service and leads in BlackBerry subscriber growth.
Due to its GSM technology, the carrier also can claim the broadest international coverage of any domestic carrier – 200 countries for voice, 145 countries for data.
“Anywhere you do business worldwide, you can do it with AT&T Mobility,” Kampfe said. “And you can check all this out with analysts.”
“Our approach integrates our wireline side and our wireless side,” Kampfe said. “We have one face for all communications needs, from mid-market companies to the Fortune 10. Simplicity is important. Other carriers have not integrated their efforts at this level.”
AT&T Mobility has a Seattle-based team focused on vertical solutions that address 20 verticals and their sub-verticals, offering off-the-shelf solutions to customized applications.
“We’ve got hundreds of third-party application providers who market and sell on their own, or we go in together,” Kampfe said of the carrier’s partnerships. “We’ve hired experts in the verticals that we serve who understand the vertical and its competitive landscape and how to maintain a competitive edge by using wireless.”
With a maturing horizontal market for e-mail and smartphone prices dropping, mobility is driving deeper into the enterprise, Kampfe said.
“Now we’re developing new solutions that allow companies to do more with wireless,” Kampfe added. “With our 3G network being built out, companies are asking us ‘what more can we do’?”
This year
“Everyone claims that this is ‘the year’ that pilot programs give way to company-wide deployments and broad adoption of mobility,” Current Analysis’ Weldon said. “I can’t get quantitative data from the carriers. The sector may be so small the carriers are reluctant to discuss it. But everyone is wildly excited about the opportunities.”
