The first wave of smartphone adoption and data/applications growth was primarily a consumer-oriented phenomenon. But over the past couple of years, the enterprise mobility market has been on fire.. Venture capitalists, initially reticent to invest in enterprise-centric plays after the "mobile middleware" debacle of ten years ago, are looking more favorably on the sector.
In 2011, VCs put some $1.5 billion into enterprise-oriented application and infrastructure firms, such as Antenna Software, Apperian, Pyxis Mobile/Verivo, MobileIron and Appcelerator. Major consulting companies are seeing significant growth in their mobility consulting practices. Leading operators are intensifying their focus on the enterprise, shown in the growth of AT&T's Business Solutions Group and Verizon's recent formation of the Enterprise Solutions Group. And 2012 will be the first year when the "mobile" component of major brands' advertising budget will be more than a rounding error.
The initial phase of enterprise activity in mobile has centered around three main components:
- Developing mobile policies for smartphones, mobile data and applications. Bring-your-own-device, device management, security, and virtualization fit into this category.
- Mobile-enabling core functions. 4G wireless networks, more open development tools, smartphones, and cloud services are now enabling companies to extend core functions to an anywhere, any device framework, via the Web or as apps. This is a far more rapid and less costly process than it used to be.
- Developing a mobile presence. Business and consumer customers are starting to expect that they can use a smartphone or tablet to perform most of the transactions they can do today on a PC--and in fact expect the experience to be possibly even better. There is huge activity out there--such as Google's highly publicized GoMo initiative--to provide companies with the tools to rapidly and inexpensively mobile-optimize their Web presence.
As all the above activity occurs concurrently and at an accelerated pace, I believe the next several years will witness an even more significant transformation: leading brands will harness mobile to develop entirely new revenue streams. Although the B2E segment will continue to grow rapidly, we will see intensification of activity in the B2B and B2C spaces. One fascinating indicator is to see the number of "VP, Mobile Strategy" positions being recruited--across vertical industries.
Forward-thinking companies will see a mobile device not merely as a "portable computer", but for what it is: a combination information, personal assistant, entertainment, and purchasing appliance that is almost always with the person, is connected, knows where you are, has a unique interface, and, with the proper safeguards and permissions, encompasses a treasure trove of information about the subscriber that can be used proactively and productively.
Some leading-edge enterprises are already harnessing this potential. They can point to mobile initiatives that are either creating new or ancillary revenue streams, or are delivering some form of sustained competitive advantage. At OpenTable, for example, some 15 percent of all reservations are now booked via mobile, translating into one million seated diners per month. At Pandora, nearly 70 percent of all use of Pandora comes from a mobile device, representing a huge part of the company's growth. Additional revenue streams will come from more relevant advertising and greater likelihood of instant purchases.
Think of travel as another example. Being able to purchase an airline ticket from your phone instead of a PC is a "check the box" phenomenon, per the above. Ancillary revenue opportunities might be a last-minute paid upgrade, based on dynamic pricing and inventory; proactively selling a day pass to the airline club when there's a delay; previewing and purchasing a meal or entertainment on the way to the airport, etc.
Every major company is or will soon be "doing something" in mobile. But just as we saw with the Web, there will be a delta between those companies that merely mobilizing existing processes and those who use mobile to create substantial new business opportunities. There will also be enormous opportunity to develop the framework to help companies recognize the potential, and then plan, implement and measure against it.
Within a couple of years, any medium-to-large-size company whose Web presence and core customer functions are not "any connected device" enabled will be at a competitive disadvantage. The real story will be the companies that are using mobile to significantly extend or open new lines of business.
Mark Lowenstein, a leading industry analyst, consultant, and commentator, is Managing Director of Mobile Ecosystem. Click here to subscribe to his free Lens on Wireless monthly newsletter, or follow him on Twitter at @marklowenstein.