“Cross Over” and the Mobile Enterprise
By Traver Gruen-Kennedy, Chairman, Mobile Enterprise Alliance
In the past decade, mobile telephony has had tremendous impact on the telecommunications industry. Cellular telephone services have brought telephony to a broad range of people around the world—some 1.14 billion in the year 2002—who account for 51% of all telephone subscribers worldwide. Today, cellular telephone subscriptions outnumber those for wireline telephony and the International Telecommunications Union estimates that mobile telephony services accounted for $364 billion in revenues in 2002.
Wireless services present a tremendous opportunity for telecommunications development, as they provide a way for operators to deliver services to new markets. In Africa, a place historically underserved by telephony services, the number of cellular subscribers grew at a compound annual rate of 75.8% over the period from 1995-2002. (ITU indicators, April 24, 2003), and today 61% of all telephone users in Africa are connected via wireless networks.
As successful as mobile telephony is, the market has largely been dominated by consumers and individual users. Businesses of all sizes have been quick to adopt wireless services; and pagers, e-mail and wireless data services have been successful in a number of instances, but telephony still represents the largest volume of wireless revenues from business customers.
In fact, mobile telephony has become so commonplace in many consumer markets that workers now bring their mobile telephones into business environments. Having one telephone with a single number is convenient, and unlike standard business telephone accounts, workers keep their mobile telephone numbers when they change jobs. Another difference between mobile and wireline telephony is the handset device. Office telephones are generally provided by a corporate ICT department, but mobile telephones are usually purchased in a retail environment by individual workers.
The overlap between business and personal uses of a mobile telephone is known as “cross over,” and it is becoming an important trend in understanding the role that wireless operators will play in providing companies with wireless access to enterprise applications. As the market for wireless services continues grow, enterprise customers will become an increasingly important market segment. Wireless operators wish to develop services that better address the requirements of enterprise communications, including telephony, messaging and access to enterprise data and applications. The way in which this happens will be determined in large part by wireless device “cross over” and integration between mobile telephony and enterprise applications.
Market Requirements for the Mobile Enterprise
Telecommunications carriers, including wireless operators, tend to view their networks as a financial portfolio where sound investing is traditionally linked to diversification around profit margin. Since wireless operators use a single network to service their customers, diversification commonly takes the form of selling service bundles to different customer sets at varying margins.
Business users generally spend more than consumers, because they tend to use their mobile telephones more frequently and for longer periods of times. “We find that people who use mobile applications on their telephones generally have higher bills, and that’s not only for data but for voice as well,” said David Wood, executive vice president of partnering at Symbian, Ltd.
Ideally, wireless operators would want to derive higher margins from their business customers, but “cross over” presents a difficult challenge. Because business users of mobile telephony purchase their own handsets, they tend to pay attention to their service plans as well. Savvy customers demand commodity pricing for what they perceive to be a commodity service. And in markets with multiple wireless operators, mobile telephony has become a commodity service, price is a determining factor and margins can be slim even in highly-valued business accounts.
Wireless operators are challenged to develop a set of suitably differentiated mobile enterprise services that can generate the margins necessary to diversify a portfolio of wireless services. In order for business customers to pay a premium, mobile enterprise services must be worth the price.
In the mobile enterprise environment, telephony is the central application around which users access messaging platforms, enterprise data and information management applications. The economics of geography and wireless networks have already made it clear that telecommunications operators play a significant role in the mobile enterprise, but extensive integration between wireless network services and enterprise ICT departments may be somewhat problematic.
The reason for this is core competencies. Wireless operators manage a core set of telephony and messaging applications running on wide area networks, whereas enterprise ICT departments manage highly customised software with tremendous capabilities on a highly customised network and computing infrastructure. When presented with enterprise applications, wireless operators can quickly find themselves outside of their comfort zone and in the realm of systems integration, project management and outsourcing.
Deploying The Mobile Enterprise
Successful deployments of mobile enterprise services will provide basic integration with a core set of enterprise applications like messaging, communications and personal information management. A recent survey of Mobile Enterprise Alliance members has uncovered the opportunity for this basic level of integration. Over 99% of the ICT managers surveyed stated that they use a mobile telephone for business purposes, but only 42% use a wireless data communications service for e-mail and messaging. Further, only 30% of these ICT professionals have access to enterprise applications when connected by a wireless connection.
The role that wireless operators play in the mobile enterprise environment will be defined by their core competencies and capabilities. “As a market, we need to recognise the challenges that wireless operators face in selling data services to enterprise customers,” says Tal Kuttner, director of the enterprise segment for Comverse. He adds “, the complexity of an enterprise service is in the actual implementation of a solution starting with the network and going all the way through sales, marketing and support.”
According to Kuttner, Comverse is focusing their mobile enterprise efforts on services that fit well with existing mobile telephony technologies and wireless operator capabilities. These areas include mobile communications, voice messaging and conferencing. For mobile data applications, Kuttner points to a “mobile workplace” that includes access to enterprise e-mail and personal information management capabilities. Because some workers want to use their telephone as their primary device, Kuttner believes that voice access and integration in the form of “push to talk” capabilities within messaging and information management applications is an important component of a mobile workplace solution.
In the previously-mentioned Mobile Enterprise Alliance survey, mobile telephone selection raised an interesting point. Of the managers who use mobile telephones for business purposes, 81% had selected and purchased their own telephone. Symbian’s David Wood point out that “, when the industry talks about ‘cross over’ there really isn’t a clear line between devices bought for business use and devices bought for personal use.” With a nearly infinite ability to customise rings, games and external appearance; mobile telephones are highly personalized devices.
Device selection is a major issue for many enterprises, because ICT managers need a consistent platform for deploying services to mobile workers. Symbian’s mobile phone operating system, Symbian OS has a number of features designed for enterprise management, including security and device management capabilities. For enterprises, the cost of device configuration can rapidly become a prohibiting factor, and this has become a design criteria for mobile telephones.
David Wood explains how this works “, one of the main ideas behind Symbian OS is that a user may buy a telephone in a retail environment, take it to work and that an enterprise IT manager will be able to set up a standard set of applications that work on that device.” In this model, a device like the Nokia 9210 would then be the primary access point for a set of enterprise messaging and information management applications.
Both Comverse’s Kuttner and Symbian’s Wood agree that the first set of mobile enterprise services from wireless operators will include messaging and information management to complement wireless telephony. Telephony is an incredibly powerful enterprise application, one whose presence and capabilities we frequently take for granted. Combining mobile telephony with basic messaging and information management is, in many cases, a sufficient next step for enterprise mobility.
Telephony And Beyond
Over a period of ten years, mobile telephone services have grown to the point where wireless subscribers outnumber those using wireline technologies. A growing number of workers are bringing their mobile telephones to work, and wireless telephony has become the de facto application of the mobile enterprise. “Cross over” has created a new set of ground rules for mobile enterprise services, and wireless operators are poised to play an important role in defining new forms of enterprise mobility by developing services to enhance the capabilities of mobile telephony.
Traver Gruen-Kennedy, Chairman, Mobile Enterprise Alliance
Traver Gruen-Kennedy is the founder and Chairman of the Mobile Enterprise Alliance. He is also Vice President and Chief Evangelist at Citrix Systems, Inc. in Fort Lauderdale, Florida USA. In his capacity at Citrix, Gruen-Kennedy is responsible for promoting promising business and technology opportunities for the company and advising the board of directors and senior executives about future strategic direction.
A global technology leader, Gruen-Kennedy is considered by many to be the "Father of the ASP industry" and is ranked by NetworkWorld magazine as one of the "25 Most Powerful People in Networking.” Industry peers nominated him for the PriceWaterhouseCoopers Outsourcing World Achievement Award and the World Economic Forum named him a Tech Pioneer for his contributions to technology and to society. Gruen-Kennedy serves on the board of directors of Software and Information Industry Association (SIIA) and as chairman of the South Florida Tech Alliance. He also serves on Florida's Research Consortium board of directors, an appointment by Governor Jeb Bush. Gruen-Kennedy is a graduate of Bowdoin College and has received specialized training in early-stage technology venture management at the Massachusetts Institute of Technology.
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