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How Do You Make Money in Enterprise Mobility? A Prediction

For the past six months I have been pondering how does a MADP (mobile application development platform) company make money in enterprise mobility?  I talk to literally thousands of people a year who are involved in enterprise mobility, and it seems many in the enterprise mobility vendor world continue to struggle to make sustainable profits.

I spent many years as the CEO of a mobile platform and mobile app development company.   I can tell you from personal experience that it is incredibly hard to maintain an R&D funding pace that keeps up with, let alone surpasses, the pace of innovation in the market.  It seems like every time you identify a new set of features for a new version of your mobile platform, it is already obsolete and you are playing catch up.

Most traditional mobile platform companies I think are struggling with the challenge of keeping up with the rapidly evolving mobility market.  They have a business model based on the assumption they can achieve economies of scale by closing an increasing number of very large and lucrative deals that will all use the same mobile platform code base.  The challenge is that finding the economies of scale, when mobility is evolving so rapidly is like chasing a rainbow.  It is very hard to achieve economies of scale with any particular platform version.

In my mind the SAP Mobile Platform is a successful anomaly.  SAP has a massive user base that will buy anything from SAP, even if they don't plan to use it for years.  SAP is often not selling a particular product and version, they are selling all mobile products and versions under the umbrella brand of SAP Mobile Platform.  In effect, they are selling a white box of mobile solutions that are near impossible to compare and contrast with competitors.  SAP doesn't have to be leading edge.  They just have to be in the neighborhood.  This is working for SAP.  Their massive user base, credibility and their customers' enormous investments make this possible.  However, this model does not translate to the rest of the mobile platform market which must stand on the merits of their latest platform versions.

I believe SAP product managers feel the same pain as the rest of the mobility market.  There is no way a company the size of SAP can respond fast enough to keep up.  That is why they have focused on their mobile platforms and MDM products which evolve more slowly.  They now embrace many different app development environments like AppCelerator, Sencha, PhoneGap/Cordova, etc., for development.  They will let smaller and more nimble companies battle it out in this hyper-speed app development market.

Even the Syclo solutions that SAP acquired last year are relatively immune from the fast paced mobile app market because they are primarily used for traditional field services organizations and utilities that are less motivated to be leading edge and that seek products with long life cycles (4-7 years).

Where does this leave traditional mobile platform vendors?  I see them increasingly moving toward the cloud.  My colleague at Cognizant, Tom Thimot, often says the ultimate place for most software solutions is in the public cloud, some will just get there faster than others.   I agree.

What do you think?

I believe traditional mobile platform companies in 2013 will be moving their solutions to the cloud, embracing HTML5 even more, and focusing more efforts on mobile application management and security in order to finally achieve the ever elusive economies of scale.

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Kevin Benedict, Head Analyst for Social, Mobile, Analytics and Cloud (SMAC) Cognizant
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Read the whitepaper on mobile, social, analytics and cloud strategies Don't Get SMACked
Learn about mobile strategies at MobileEnterpriseStrategies.com
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Full Disclosure: These are my personal opinions. No company is silly enough to claim them. I am a mobility and SMAC analyst, consultant and writer. I work with and have worked with many of the companies mentioned in my articles.

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More Stories By Kevin Benedict

Kevin Benedict serves as the Senior Vice President, Solutions Strategy, at Regalix, a Silicon Valley based company, focused on bringing the best strategies, digital technologies, processes and people together to deliver improved customer experiences, journeys and success through the combination of intelligent solutions, analytics, automation and services. He is a popular writer, speaker and futurist, and in the past 8 years he has taught workshops for large enterprises and government agencies in 18 different countries. He has over 32 years of experience working with strategic enterprise IT solutions and business processes, and he is also a veteran executive working with both solution and services companies. He has written dozens of technology and strategy reports, over a thousand articles, interviewed hundreds of technology experts, and produced videos on the future of digital technologies and their impact on industries.

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