by Eric Goodness | July 30, 2014 | 5 Comments
Last week I published the second iteration of the Magic Quadrant for Managed Mobility Services.
The study sought data, from providers and users, regarding MMS market performance and growth. The study revealed that over the past 12 months there was a big pick-up in the number of mobile assets placed under management by third party, external providers (both user owned and corporate owned devices). We also saw evidence that the demand for managing globally distributed mobile assets on behalf of multinational companies (MNC) had grown significantly over the same period.
The most interesting data points I discovered as part of the research are (with editorial comments):
- On average, vendor participants in both the 2013 and 2014 MMS MQs saw their pool of managed devices grow by more than 100 percent over the previous year. I expect at least a 50 percent growth rate in the number of devices placed under third party management next year.
- On average, vendor participants in both the 2013 and 2014 MMS MQs saw their pool of managed devices outside that reside outside of their home geography grow by more than 300 percent (as a percentage of their overall installed base). Managed Mobility Services are becoming more international. Next year, I expect that 30 percent of the devices managed by providers will be outside of their home geographies as MNCs discover the capabilities of the growing pool of MMS providers.
- On average, vendor participants in both the 2013 and 2014 MMS MQs saw their pool of managed, customer-owned enterprise mobility management (EMM) software instances grow by more than 75 percent over the previous year. I expect providers will grow managed EMM instances by more than 100 percent over the next 12 months as users sweat the functional life of their software investments. Managing customer owned EMM instances is in big demand from users and it is a very high margin offering for providers.
- Customer references continue to enable BYOD; however, based on reference feedback employee-owned devices will be reduced as a percentage of all devices accessing corporate resources. This feedback was consistent across all geographies. First, the customer references in this MQ are overwhelmingly focused on supporting corporate liable environments. So there is that. However, the growth in ‘BYOD Boomerangs’, disillusionment with cost increases associated with migrating to BYOD and emerging demands for governance lock-down in some companies will diminish BYOD support in a sizable part of the market. This is a great opportunity for MMS providers. This not to say that BYOD disappears. It won’t. Ever(ish).
- Customer references believe that an optimized TCO model for Mobility is ‘Hybrid liability‘ where the allocation of devices, applications and services is based on worker roles and demands. Not all BYOD; not all corporate owned. The wisdom of the commons. Hard to argue with this viewpoint.
- When asked which service provider segment will be the most successful in growing and delivering Managed Mobility Services, customer references pointed to Communications Service Providers. However, the CSPs have been the lowest ranked provider segment for both years this MQ has been conducted. I believe that the CSPs ‘permission to play’ and their ability (and cost advantage) to bundle connectivity services with devices, software and program management make Managed Mobility Services their market to lose. However, no one ever loses their shirt on betting against the CSP’s inability/reluctance to raise themselves higher in the value-chain beyond connectivity. In general, CSPs will continue to focus on integrated EMM and will avoid adding delivery headcount (you know, knowledge, expertise and sector acumen). Unless the CSPs aggressively push the broadest, most compelling value offered by Mobility Outsourcing, the CSPs will not recapture their investments in integrated EMM. Just saying.
If you have access to Gartner’s published research, take a look at the Magic Quadrant for Managed Mobility Services and feel free to offer improving comments that I can use for next year’s study.
Category: BYOD Cloud IT Services Mobility outsourcing Uncategorized Tags: BYOD, EMM, enterprise mobility management, MDM, mobile, mobile device management, UEM
by Eric Goodness | July 28, 2014 | 6 Comments
Last Wednesday, PTC announced that the company signed a definitive agreement to acquire Axeda Corporation.
Axeda is a small software and services company with outsized visibility in the market to connect machines and sensors to the cloud for business value. PTC acquired Axeda for approximately $170 million in cash which Gartner estimates is an acquisition multiple of just over 6 times revenue. PTC’s pick up of Axeda closely follows the company’s acquisition of Thingworx just 6 months ago. In its press release, PTC positioned the acquisition of Axeda as a direct complement to the PTC ThingWorx business. In my opinion, Thingworx complements Axeda. In fact, I believe PTC needs Axeda much, much more today than they require Thingworx’ application development platform.
My reasoning is based on market needs today. Earlier this year I saw Dr. Jeff Smith of Numerex present at the M2M World Congress in London. In his presentation he had a wonderful slide that alludes to Maslow’s Hierarchy of Needs and applies it to the Internet of Things. In Maslow’s hierarchy, the base is Physiological Need.
In the IoT realm, our most basic Need is Connectivity.
We’re early days in rolling out the IoT. Most of the projects I see are focused on simple connectivity and the monitoring of assets. For many IoT initiatives to get Board level approval today, practitioners need laser-like focus on cost take-out from operations. Hard dollars; not good intentions. As one global Enterprise software vendor framed the sales challenge in a recent conversation:
“ROI demands from decision-makers relating to IoT initiatives is often the equivalent of having to negotiate world peace”
That means most green-lighted projects will be more focused on uses such as the identification of asset usage patterns from monitoring or basic remote control of assets to reduce break-fix and administration activities. Similarly, manufacturers will productize remote software releases and offer rules-based, thresholded monitoring as elements of premium support offerings.
The future is coming but it is not here yet. The general use of machine learning or neural and cognitive automation applied to business processes and assets – in such a fractured and un-standardized technology market – seems as far away as the flying cars and escalator sidewalks that I was promised as a child.
The market will need to learn to walk first before it learns to run….and the hard dollar ROI requirements often mean that Vision has to be self-funding.
This is a good acquisition by PTC and it should have been their first move into IoT. Axeda brings to the table broader capabilities in terms of device and asset management, secure connectivity agents and data management (in addition to application development tools which overlaps with Thingworx’ raison d’être). Additionally, Axeda has a knowledgeable sales organization and a stable of top tier partners that PTC will require to get in front of stakeholders (with whom they have traditionally had little exposure). Axeda will be PTC’s engine of growth in the Internet of Things.
We certainly expect to see more M&A in the IoT space but how much investment is unclear. I speak to a lot of investors and they are still trying to understand the capabilities and value of the hundreds upon hundreds of companies competing in the legacy telematics-M2M-IoT enablement software space (with most of those ISVs generating less than $10M in revenue even after a decade-plus of operation).
My peer, Al Velosa, and I will publish a few documents on this topic over the next few months. Please feel free to provide guidance on the type of information you require for your due diligence (as a User or as an Investor or as a Vendor Partner) in this software market. We’ll work to ensure your needs are expressed in our research.
Category: Cloud Convergence of IT-OT IT Services M2M Machine-to-Machine Mobility outsourcing Uncategorized Tags: Internet of Things, IoT, M2M
by Eric Goodness | January 16, 2014 | 2 Comments
Over the past 30 days the Global Enterprise Mobility Alliance (GEMA), a joint venture of providers of enterprise mobility managed services to multinational organisations, announced two new members:
XSAT India a mobile systems integrator and specialist mobility service provider joined GEMA as the joint venture’s exclusive partner for India, enhancing the alliance’s capabilities and presence in the rapidly emerging Indian market for enterprise mobility. Headquartered in Delhi, XSAT is a pan-India enterprise mobility systems integrator and managed service provider. XSAT provides Indian enterprises with mobility solutions including BlackBerry, Samsung, VSAT, GSM & Satellite based Vehicle Tracking Systems and Provisioning & Support services. The firm maintains partnerships with Airtel, BlackBerry, Cyberspace and Ingram Micro in region and key customers include Tata Consultancy Services, Mahindra & Mahindra Ltd., Polaris Financial Technology, Federal Bank and SpiceJet among many others. XSAT has offices in Gurgaon, Mumbai & Bangalore.
BMobile joined GEMA as a founding member, significantly enhancing the alliance’s capabilities and presence in the Mexican and Latin American markets. Based in Mexico City, BMobile Scanda is an enterprise mobility systems integrator and managed service provider across Mexico. BMobile is the mobile arm of parent organization Grupo Scanda. As a result of the agreement, BMobile will become GEMA’s 6th founding member and shareholder with a seat on GEMA’s Executive Board of Directors. BMobile will be GEMA’s exclusive member covering Mexico.
Any reader of Gartner’s Magic Quadrant for Managed Mobility Services, with the MQ’s lack of Leaders and Challengers, recognizes that global scale and scope is a major challenge in the MMS market. GEMA’s march to create a mesh of dedicated partnerships for global MMS delivery is a refreshing, if somewhat untested approach (but with a growing based of supported and managed devices), to securing consistent and high quality IT services and systems dedicated to managing the Enterprise mobile estate.
That brings GEMA to 11 member companies across the Americas, Europe, Asia Pacific and Middle East-Africa.
GEMA merits review and consideration for multinationals companies looking for global service management and delivery such as:
- Centralized ordering-provisioning-activation (including self-service portals)
- MxM software management
- Mobile-centric process and technology help desk services
- Software release and store management
- Device staging and kitting (including gold image management)
- Expense management
It is important to note that although GEMA is organized as a JV the organization doesn’t always act as the Prime contractor.
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by Eric Goodness | December 9, 2013 | 3 Comments
Today Clearlake Capital Group, L.P. announced the formation of Calero Software, LLC - a new provider of communications management software and related services to global enterprises. Calero is the combined businesses of Veramark Technologies, Inc., PINNACLE and Movero.
The company provides communications expense management, managed mobility services, and mobile device management products and services. All three of the combined companies are known to Gartner and the companies have been reviewed and rated in Gartner’s Magic Quadrant for Telecom Expense Management.
The formation of Calero is a welcomed infusion of capital and consolidation in a market that struggles to sell the value of its solutions with user propositions ranging from industry leading ROI to visibility and transparency of communications spend to external services to improve the management and governance of corporate liable and BYOD smartphones and tablets.
Calero will find a welcoming market for a provider that executes to achieve such value.
By Gartner’s estimate, Calero enters the market as one of the three largest companies dedicated to communications expense management. To compete more effectively, and secure its place as a market leader, Calero must:
Execute, execute, execute – The telecom expense management market suffers from significant dissatisfaction with its providers. Calero will need to work to gain the trust of large global enterprises looking to change providers. Gartner is witnessing a huge wave of large companies that are dissatisfied with their TEM providers and the migration of these big logo brands is just beginning. Gartner believes that the market is willing to pay a premium for execution and stability.
Create world class operations focused on a single platform and deep expertise – Over the past 10 years of market coverage Gartner has learned that roll-ups can buy share but that doesn’t guarantee success. Roll-up strategies that do not bring in market leading executives (in SW and Outsourcing) focused on improvements in customer experience, service delivery, service management and operations cost effectiveness are doomed to fail and become the next distressed asset and fire sale.
Become the leading Sales and Marketing and Partnering force in the industry – A persistent problem that has nagged the TEM industry is that most go-to-market strategies are fueled by half measures. Most TEM companies struggle to understand if they are a Software company or a Services company or a Business Process Outsourcing company. The answer is ‘yes’. To effectively straddle the complexity of those roles requires significant investment in sales and marketing personnel and programs…sometimes ahead of revenue. Success in TEM and MMS requires hiring sales and marketing individuals knowledgeable of communications, software and business process.
Add value to the Enterprise mobile estate – The market continues its single-minded message to BYOD and the ‘automagic’ of EMM software. However, corporate liable devices make up the majority of supported devices in the market and represent significant expense and support challenges. Enterprises require managed mobility service providers that message to, and can support, hybrid mobile governance and liability. Hosted or cloud-based EMM (e.g. MDM. MAM, PIM, MCM) is the beginning, not the end, of the Enterprise’s mobility management needs. The market is looking for partners that can provide:
- project-based business and technical consulting and advisory services relating to mobility,
- application development and testing: and,
- annuity-based contracts for forward and reverse logistics (e.g. sparing, kitting, incident management, onsite & depot repair, remote help desk and onsite “genius bars”, advanced replacement) support of their mobile estate.
The TEM market continues to do 360s and ponder its future with consolidation slowing and R&D and innovation nowhere to be seen. Calero comes to market as an integrated TEM-MMS provider that is much larger than traditional TEM providers.
This should be interesting.
Category: Uncategorized Tags:
by Eric Goodness | March 27, 2013 | 2 Comments
Today I notified the following providers that they would appear in the first MQ dedicated to managed services for Enterprise mobile devices:
- Deutsche Telekom
- Enterprise Mobile
- Motorola Solutions
- WidePoint Solutions
Based on responses to a pre-MQ qualifying survey, the following Inclusion Criteria were determined for entry into the MQ:
- Providers must directly deliver some organic IT services content to user organizations (providers cannot sub-contract/private label all IT services delivery).
- Providers must maintain IT services portfolios that include the integration of mobility management software.
- Providers must maintain IT service portfolios to include consulting and advisory services related to mobility strategy, mobile devices and mobile software and applications.
- Providers must maintain IT service portfolios to include the ongoing management of mobile devices and mobile application releases.
- Providers must have at least 100,000 mobile devices under management.
- Providers must have devices under management in at least 3 of the 5 geographies identified in the survey (Asia Pacific, Latin America, Middle East-Africa, Europe and North America).
- The completion of all data fields in the vendor survey is mandatory for inclusion.
The MQ will be published in early July 2013.
I’d also like to thank all 36 companies that participated in the MQ survey. All participants will receive an aggregated view of the data before publication of the MQ.
Category: Uncategorized Tags:
by Eric Goodness | March 6, 2013 | Comments Off
I will be at the HP Global Industry Analyst Summit today and tomorrow. I want to understand HP’s approach and level of investment/commitment to the Communications Outsourcing and Professional Services market. In their ongoing restatement of priorities and strategies ‘networks and communications’ have been missing in almost every pronouncement. If you have questions you’d like me to pose to HP outsourcing executives, please leave your comments here or send me your questions/comments on Twitter at @EFGoodness.
I will blog about what I learn on Friday. In the meantime, you can follow my comments, and the comments of my industry analyst peers, at #HPSummit on Twitter.
Category: Uncategorized Tags:
by Eric Goodness | January 11, 2012 | 4 Comments
There is no doubt that the machine-to-machine market, as a component of The Internet of Things, holds a lot of promise for many OEMs, ISVs and ICT service providers. I’m currently writing Gartner’s first ever user survey related to M2M solutions. The survey engaged over 600 user companies across the US, UK, France and Germany. Our survey avoided specific vertical market solutions in favor of more horizontally focused point solutions:
- Asset tracking and location
- Asset monitoring and control
- Logistics control and optimization
- Asset serviceability
- Security monitoring
- Energy demand response
- Environmental monitoring
- Payment processing
- Messaging, notification & advertising
- Regulatory compliance monitoring
One thing is clear in the results: the next 24 months will be challenging to convince companies to integrate new M2M solutions if there isn’t significant promise of cost reduction related to the companies own operations or how efficiently they provide service to their own enterprise customer base. This perspective has been validated in my inquiry calls with Gartner clients – user and providers.
In terms of market objections, we found among the 377 respondents with no plans to deploy M2M solutions that the biggest objection to M2M investment, across all geographies, is a lingering doubt that connecting OT and IT, or simply applying M2M connectivity to IT, will provide measurable business value. This feedback is likely based on a lack of knowledge and ineffective solution positioning by providers. In my inquiries I hear user’s frustration with how their provider’s enable inflated expectations in the pre-sales phase only to back off claims when confronted with the user’s real world requirement to establish an ROI expectation in a contract. The gap is sometimes massive…and off-putting.
While the success of M2M adoption is certain, the timeline of success is less so. In 2012, we will hear more success stories yet I believe that the growth rates will under-perform many of the standing forecasts in the market today. I expect the survey analysis document to be published in early February 2012. I will follow the survey analysis will a market forecast later in the year.
In the interim, I look forward to speaking to you about IT services an outsourcing opportunities related to M2M solutions.
Category: Cloud Convergence of IT-OT Infrastructure IT Governance IT Services M2M Machine-to-Machine outsourcing Strategic Planning Uncategorized Tags:
by Eric Goodness | January 9, 2012 | 4 Comments
A few thoughts about the Telecom Expense Management market in 2012:
Managed Mobility Services Becomes a Viable Market Adjacency
Continued headwinds in the global economy and a user base hell-bent on bringing their own mobile devices to work (BYOD) will finally make MMS a viable process and IT service market for TEM providers. One big challenge for providers entering the market is choosing, or acquiring, an operations management platform (e.g. mobile device management software) that is scalable and highly automated. Another significant challenge is determining what level of partnership or investment to pursue related to logistics and support. Each promise to make or break an MMS business model and greatly influence service products brought to market.
M&A will continue to distract and intrigue the market
Recently, IBM acquired the Rivermine TEM business in the Emptoris acquisition. Tangoe followed with an acquisition of Profitline. Last week, WidePoint acquired Avalon Global Solutions. All of these market events occurred within a 2 week period… and there are more events in process. Finally, the market is entering into a consolidation phase. However, those companies looking to sell shouldn’t be too excited in terms of ‘revenue multiplier inflation’. Based on past and recent acquisitions, and conversations with interested buyers, the market is not likely to pay much more than 3 times forward revenue unless the underlying intellectual property is disruptive and/or the service model is differentiating.
The Gap Between the Haves and Have-Nots Will Widen
Although M&A will likely thin the number of competing pure-play TEM companies in the market, there are more and more competitors emerging everyday. Telecom expense management is emerging to be a more important consideration by end-users in Communications Outsourcing deals as TEM capabilities have become the business intelligence mechanism to prove the value of a communications outsourcing deal. It is more important than ever for TEM companies to invest in personnel and support capabilities related to building a robust indirect sales channel. The emergence of global outsourcers and global carriers into the TEM market will gradually remove the top end of the market, in terms of telecom spend and devices to be placed under 3rd party management, from the pipeline of many TEM providers. Those TEM companies without successful channel enablement programs will likely become part of the M&A wave as a distressed asset.
Give me a call if you’d like to discuss.
Category: IT Governance IT Services outsourcing Tags:
by Eric Goodness | June 9, 2011 | 1 Comment
Yesterday I attended and presented at the Axeda Connexion 2011 conference in Boston (Twitter #Connexion11). The conference brings together business and technology leaders together to discuss, and learn, about M2M and how connecting assets and devices create real business value. While pretty gung ho about this market before attending, the conversations I had with practitioners and enablers have me even more excited the potential of connected solutions in the market.
Founder Dale Calder, an indefatigable champion of the M2M market, led off the conference positioning how The Network Effect applies to M2M connectivity in terms of creating value. I might quibble with Dale’s projections for the number of connections realized over the next 10 years but he was dead-on about the total economic impact of M2M connectivity. The dollars realized from cost reduction efficiencies AND the creation of business growth platforms is enormous (I hope to provide finer points on the economic impact in the coming months).
In my presentation I provided a few overarching trends that I see driving the M2M adoption rates:
- The Cloud: The cloud removes CAPEX and OPEX burdens from user and vendor organizations looking to roll-out M2M solutions. Coupled with lower prices and subsidies on modules, flexible ‘right-sized’ network service models and the emergence of a community of value-added external services providers promise to drastically reduce the TCO of M2M solutions. I believe that the cost per connection will reduce by 50 percent over the next 5 years.
- The Convergence of IT and OT: As characteristics of OT converge with IT there will be architectural and organizational impacts in how companies connect, gather data and manage Enterprise process assets.
- The Market’s Acceptance of ‘Smart Services’: M2M is the enabling platform to improve how IT, OT and business processes are monitored and managed. Because of the scope and scale of connected assets, I believe M2M connectivity is going to create significant pressure in the market to innovate in service automation to move service automation from reactive to proactive to predictive and preventative. M2M can learn from a number of market adjacencies that are Communications specific such as Remote IT Management, Mobile Device Management and Telecom Expense Management.
The primary reason I see 2011 as The Year of M2M is because of a strong, emerging community of resources in the market to add value to the M2M supply chain. That is, there are a significant number of consultancies and integrators and outsourcers that can help users roll-out M2M solutions faster with reduced TCO. Companies such as Walsh Vision, MahindraSatyam, Integron, Symphony Services, AT&T, M2MV, Orange Business Services and others have proven that they can be valuable partners. My current research shows that users that have engaged 3rd party expertise to roll-out M2M solutions are able to realize the benefits of M2M 30 to 50 percent faster than their peers with self-designed and provisioned M2M solutions. Those companies using external expertise are ultimately more satisfied.
Moving forward, my immediate focus will be on helping Gartner clients, both users and vendors, to create more effective business plans to rationalize M2M solutions.
Category: Cloud Convergence of IT-OT IT Governance IT Services M2M Machine-to-Machine Strategic Planning Tags:
by Eric Goodness | October 8, 2010 | 11 Comments
This morning, Vodafone Global Enterprise made a strong push for market leadership when it announced it has acquired two, not one – but two, TEM vendors – TnT and Quickcomm.
Could this be the beginning of a wave of consolidation in the Telecom Expense Management (TEM) market? I sure hope so.
Quickcomm has operated primarily as a TEM application vendor. The company has cemented significant partnerships over the past few years (including Vodafone). TnT Expense Management is a services focused company providing process outsourcing services to large multinational companies. Each company brings good international experience to Vodafone. Quickcomm was founded in Australia and maintains offices in Australia, New York and London. TnT over the past 18 months has expanded its sales and service presence in Asia and Europe (finding notable success in France and Germany). TnT received the highest customer satisfaction ratings in Gartner’s 2009 TEM Marketscope.
Although Vodafone already managed a growing and successful TEM service portfolio, which started with the launch of Vodafone Telecoms Management last year, the acquisitions allow Vodafone to provide its customers and partners more varied and flexible TEM solutions; including software which appeals to how non-multinational companies acquire TEM capabilities in European and Asian markets (while still embryonic, Latin American markets seem to favor a process outsourcing approach for TEM).
The specifics of the deal were not announced. Combined, Gartner estimates that the two acquired TEM companies generate under $25M in revenue. Based on the estimated 2009 revenue of the acquired companies, their trended growth over the past 36 months as well as considering comparable TEM acquisitions, Gartner estimates that the two companies were likely acquired by Vodafone for less than $40 million (US).
The acquisition of these two TEM companies reinforces the importance of Telecom Expense Management to large multinational companies – the core market served by Vodafone Global Enterprise. Telecom expense management is component of the larger communications outsourcing and professional services (COPS) market. While TEM revenue is a very small portion of the revenue generated in the COPS market, TEM is a growing point of focus by users in recently signed communications outsourcing deals as well as in ongoing pipeline opportunities. For vendors, the user goodwill that TEM generates from cost avoidance is an important pull-through mechanism for additional revenue opportunities by outsourcers and consultants.
Telecom expense management, when practiced well, allows a company to discern and enumerate how it consumes communications to support its business. Companies that use TEM tools or services are able to build fact-based business cases to migrate towards unified communications. Because of TEM, the communications segment of IT spend will achieve a level of cost effectiveness, visibility and transparency – such as realtime spend and TCO per user across fixed and mobile modalities – that other IT segments will struggle with for years to come.
My hope is that Vodafone’s acquisitions provide market validation for other Communications Service Providers and IT-Business Process Outsourcers (onshore as well as offshore) to solicit board approval for their own acquisitions. Private labeling and passing through smaller pure-play TEM vendors is far superior to building new capabilities organically; however, it is not a viable long term strategy. In North America, TEM is an outsourcing market. It is transitioning to such in Europe and Asia. Unfortunately, too many TEM companies have little to no outsourcing experience. The current TEM market is being held back by the immaturity of many its practitioners. More acquisitions and mergers, by small and large IT services companies, is exactly what the TEM market requires because that is where the future of TEM lies.
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