How companies buy mobility products: Broad changes taking place

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Astonishing changes are happening within businesses as mobile technology becomes more and more central to their IT, business operations and digital transformation initiatives. Results from our recent Decision-Maker Mobile Technology Survey, 2015 show us these changes are broad-ranging.

They encompass new buyers and spending levels, new priorities and challenges, as well as shifts in distribution channels and brand affinities.

In August 2015, we surveyed 589 mobile technology decision-makers in businesses in the US and five European countries about their purchasing preferences for enterprise mobility products. This is an overview of the survey highlights and what they mean for the market.

Spending is skyrocketing – especially outside IT departments

Mobile technology has become a business imperative, an essential part of meeting the rising expectations of employees and customers in the modern workplace. As a result, spending is skyrocketing: buyers in our survey expect a 30% rise in IT investment in mobility over the next two years, with large growth expected in company mobile devices and packaged business mobile apps in particular such as Microsoft Office and Remote Desktop, and Google Docs.

We estimate there are over 300 companies selling enterprise mobility products – decision-makers selected Apple (48%), Microsoft (34%) and Samsung (30%) as the top brands for their enterprise mobility strategy

Surprisingly, 69% of all company spending on mobility hardware, software and services comes from outside the IT budget. The biggest of these departmental spenders are marketing and customer service, which account for 18% of total mobility spending, followed by sales at 17%, and operations at 14%. This level of spending outside the IT department is going to remain consistent over the next two years according to the survey.

Part of the reason for this is that mobility remains highly fragmented within companies, hindering organisations from getting on top of escalating business requirements. Only half of respondents said that the IT department leads the progression and adoption of mobility in their organisation. In 41% of cases, the CEO has the ultimate sign-off authority on new mobility investments, ahead of the chief operating or finance officer.

Additionally, the mobility competency remains highly fragmented within IT departments: 37% of decision-makers reported their mobility efforts were undertaken by the IT infrastructure team; 20% said the desktop and PC team was chiefly responsible for mobility, and under 10% have mobility reporting into either the security, messaging or collaboration teams. Interestingly, 15% of decision-makers said that mobility was looked after by the digital transformation and innovation arm of their IT department. This last group is a new function that has arisen in the past 24 months under the digital transformation and workspace slogans.

Data security concerns and market complexity mean low maturity

Internal fragmentation is compounded by mounting concerns about data security, the complexity of the market and the rate of technology change. These factors are holding back the maturity of mobility within companies. For instance, only a third of firms surveyed have developed a custom mobile app for their employees, with two-thirds of these firms developing fewer than five applications. Just 7% of those developing custom apps have developed more than 25 apps, according to our survey.

Unsurprisingly, in a context of high-profile cyber-attacks the biggest barrier to internal app development was data security: this was listed by 41% of decision-makers as the most significant hurdle.

There have also been changes to what buyers see as the biggest barrier to mobility overall within their firms. Market complexity and the speed of technology change were listed by almost half of the survey as the top overall challenges faced with mobile technology in their organisations. This is significantly ahead of other well-documented problems, such as internal organisational culture, engagement by the board, executives and employees, and a lack of mobile IT skills.

Purchasing channels and brand affinities are shifting

The survey also revealed some very interesting changes to buying channels and affinities toward technology brands for enterprise mobility. Our respondents said that operators (48%), resellers (30%) and fascinatingly, directly from hardware manufacturers (25%) were the preferred ways to purchase mobile devices today and over the next two years.

The preference for resellers and manufacturers are important findings. Businesses are starting to turn to these sources rather than operators to address specific requirements in device upgrades and financing, operating system updates and, most importantly, managed services. This has important implications for hardware players such as Apple that are moving to a more direct model, and for the likes of Google, Microsoft and Samsung as they look to transform their business models in the enterprise market.

We estimate there are over 300 companies selling enterprise mobility products; our survey presents an opportunity to better understand which technology brands buyers see as most strategic to their corporate mobility strategies. As shown below decision-makers selected Apple (cited by 48% of respondents), Microsoft (34%), Samsung (30%), Google (23%) and HP (12%) as the top five brands for their enterprise mobility strategy. Below this top tier were Dell, IBM, Verizon, AT&T and Vodafone.

Picture credit: CCS Insight

In a list of 26 brands, it is notable that few enterprise mobility software suppliers were chosen by more than 5% of buyers. These suppliers included major names in the field, such as VMware, MobileIron, Kony, BlackBerry, Good Technology and Red Hat.

69% of all company spending on mobility hardware, software and services comes from outside the IT budget

The preference for device, platform and service providers rather than specialist mobility suppliers reflects a greater need for corporate devices but also a rising preference for mobility services rather than the myriad of confusing software solutions available today.

The diversity of mobile enterprise software is doing little to reduce perceived market complexity, which is now the greatest barrier to investment. This, along with a fear of being tied to a single supplier in a highly unstable marketplace, may be driving a preference for more-neutral service providers to help decision-makers with their mobility strategy.

What it all means

Our decision-maker survey reveals some fascinating changes occurring in enterprise mobility. It shows us that although mobility is indeed a business imperative, significant internal fragmentation, market complexity and mounting security concerns are holding back its maturity within organisations. This is prompting significant changes to the enterprise mobility purchasing channels as well as to the brands that decision makers prefer to engage with as part of their mobility strategy.

Above all, our survey reveals that mobility maturity — a subjective mix of competency with the technology and organisational change that accompanies its advancement and realised value in businesses — is arguably the biggest influence on the market today and still at a foundational stage within most organisations.

I look forward to seeing whether this is still the case when we field next year's survey.

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JodyCox
6 Oct 2015, 3:10 p.m.

Interesting stuff and I think the fact that mobile spending is coming from outside the IT spend is a good thing. The "business" should be at the centre of all mobile enterprise solutions, as this is their chance to implement a solution that enhances their user journey.

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jeffepsteinbc
14 Oct 2015, 5:36 p.m.

I agree @JodyCox. With the mobile OS game more or less decided, it should become less about hardware and more about software (apps) in the near future, just like it did on the desktop. Developers are competent in iOS and Android, and will adapt to Windows Phone if/when need be. It's the app that makes the operational/experiential difference.

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