Techaisle Analyst Insights

As of March of this year, half of all US mobile phone subscribers had a Smartphone. This in my opinion is more than just a number. It is a tipping point for applications. It is safe to say that we are now in an app economy as far as mobile phones are concerned. But the number has significance beyond just being a tipping point because it is a tipping point for thinking about applications.

What do I mean by that? Applications designed for the desktop or enterprise environments typically exist in a sandbox. That sandbox can be as small as a user’s desk or the entire enterprise but nonetheless a sandbox. Their function and focus is to provide the tools needed to complete a task within the confines of that sandbox. But these apps for the most part ignore user contexts. For example, a CRM application typically does not take into consideration a user’s location nor does an app like MS Office (other than language localization). But mobile apps need to be different because mobile is different. A mobile phone is not just another device. It is a beacon in your pocket that is constantly aware of where you are, what’s around you. It is also aware of your preferences and social network and what transactions you prefer. And one more thing – mobile identifies the user uniquely, not just from a device standpoint but as an aggregate of all the factors mentioned above. So it follows then that Context must define Content. But what are these contexts that app developers should consider? There are fundamentally three.

• Location

• Contacts/social network

• Calendar/time

Not all apps can take advantage of all three but should take advantage of at least one. It is hard to say that one of the above mentioned contexts is more powerful or more important than the others. Each can be powerful depending upon the app or the content. For example, ecommerce applications benefit significantly from taking advantage of location while for a CRM app, contacts and calendar are more critical than other contexts.

Context = Creative Destruction

The use of contexts in app development is not just about driving new user experience and value for users; it is about driving new business models as well. The use of contexts increases the app’s value to the point where in many instances a new revenue model can be implemented. For example, wireless phone companies that by design are able to capture user locations can monetize this “data” in a variety of ways, advertising being one of them. Similarly apps that used to be sold on a per license basis can shift their revenue models to leveraging contextual data as opposed to per user charges. In that respect, context is not only valuable, it is disruptive. The first wave of context aware apps we see have typically been those that would anyway have been free - Apps such as Instagram, Pinterest and Zoomingo (local shopping application).

Increasingly, I predict that we will see whole industries that shift their business models to take advantage of contexts. Newspapers and media are a prime example. While many newspapers are experimenting with paywalls, I believe that a larger opportunity exists for them to exploit user contexts. News publishing today uses what could be termed as an “in-out” model, that is publishers and editors decide what content should be created, publish it and hope that readers will find it interesting. It is the traditional content first driven approach. But what is relevant to me as a reader depends upon my current context. And what is relevant for me today may not be relevant tomorrow. It calls for a more dynamic approach to presenting content, where content to be presented is selected based on a combination of contexts. In other words, an “out-in” model. Doing so improves their ability to deliver advertising thereby potentially increasing revenue.

The same is true for retail. Most mobile retail websites are mere reproductions of online properties but should they be? Online retail websites suffer from the same contextual ignorance as other apps. For example, a mobile retail app would be much more powerful if it could detect a person’s physical proximity to a store. Imagine how small business retailers could benefit from such capabilities. Think about applications like Endomondo that track your physical fitness activities. Well over 5 million users have downloaded and use Endomondo. Consider how useful that data would be to an outfit like REI for targeting and creating customized offers. Here’s another example and a personal one. I am an avid photographer, but not a very good one. I try to learn about photography but that typically happens before or after I am out taking photographs. But the most appropriate context for me to quickly learn tips is when I am taking photographs. Cameras already track locations and embed them in pictures. They already sense light conditions. But this data is not used to educate the photographer! Could it be used to provide tips at the time the photo was being taken? Or could suggestions be given as to how to improve the photograph with examples of the best possible settings? Would it make amateurs like me to more likely to buy a particular camera brand? Would it facilitate brand loyalty? I believe the answers to all of the above are a resounding yes!

Context = Engagement

Indeed, most websites retail or not suffer from the same issue. Even corporate, customer facing websites are mere one-way information dispensing media rather than a context aware, interactive medium that facilitates two way engagements. In fact the very term “engagement” needs to be redefined in the mobile age.  Engagement was largely defined in terms of giving users the content they want/need. But in the mobile age, I believe that engagement should be about the interaction users want and need. It follows then that if context defines interaction then adding contexts fuels a more powerful engagement that can impact costs and revenue.

In Conclusion

Successful mobile applications need to score high on relevance. Relevance is a function that takes into consideration not just content but also all the factors that surround and influence the appeal of that content. This means that app developers have to re-think their applications for the mobile age. And not just re-think but they have to get mobile DNA into the entire organization.

 

Microsoft’s recent announcement regarding their intention to compete with iPads and other Android based devices signals a fast acceptance of tablets becoming popular with individual and business users alike. Microsoft is not new to this market having made their first tablet/slate PC related announcements almost ten years ago when Bill Gates was still at the helm. However, over that time period, Microsoft was not able to convince PC OEMs to develop these new form factors (Fujitsu and Toshiba being the exception). Major US OEMs like HP only made a half hearted attempt to develop these new devices. The reason – Microsoft tried to push the same Windows OS on to different form factors thereby offering no additional incentive to buyers to adopt tablets. Most technology pundits have focused on the fact that Microsoft is late to market with these devices and that their stranglehold on the computing market is at risk because they risk losing consumers and ISVs to alternative operating systems such as iOS and Android. This is true and well discussed so I won’t rehash that topic in this post.

What Microsoft failed to recognize was that the tablet user experience is fundamentally different than a traditional PC. It’s not just about consuming media on a different device but rather how a user interacts with different types of software. When user interaction shifts to a different paradigm – in this case Touch /Multi-touch, the entire user experience changes. That demands a complete re-thinking of user interface design so as to make the interaction efficient and productive. I believe this to be THE key impact of tablets on personal computing. The reason iPads and Androids are succeeding is because the applications running on these devices have been written from the ground up to take this issue into consideration. I believe the growth of touch devices will challenge the long held beliefs of usability but more importantly will force ISVs to think radically about informationinput paradigms that have existed for centuries. Consider a simple task of entering data into a spreadsheet cell. Currently, the norm is to pop up a full keyboard for entering data which takes away screen real estate; this is not optimal particularly on a small device. Similarly, commonly used applications that involve form filling also fail to adequately address input and interaction issues today. For ISVs, their next generation of products will have to find a competitive edge in ease of use which I believe will take on more importance among individuals when buying products and software solutions.

Abhijeet Rane
Techaisle

At the recent GigaOm-Appconomy conference the talks and panel discussions centered around app development and the challenges associated with it. There was a great set of panels that honed in on some of the key challenges faced by app developers as well as app marketing companies. Some notes and learning from that conference:

1. Too many apps: There are obviously a huge number of apps available but that does nt mean that app economy is robust – yet. The research firm Localytics reports that on an average there are 48 apps installed on a typical iPhone and 26% of these apps are only used once. While usage is a separate issue, the first problem is that of discovery. How does a user discover new apps ? While apps are organized into categories it still requires the user to flip through and find apps that suit their needs. On the enterprise side the challenges are the same. Should an enterprise IT department play the role of a curator for these apps?

1. Rise of Mobile IT departments: There are two trends that are increasingly impacting enterprise IT departments – one is that IT departments are increasingly allowing users to bring in their own devices. This is how phones like iPhones have gotten into enterprises bringing the issue of managing and supporting these devices to center stage. But managing mobile devices brings forth a new set of challenges different from managing devices that IT has purchased. What happens when the device changes? How do you ensure data security? How do you ensure corporate security policies are being followed? This is not just driving a new set of IT policies but a new mind set within IT departments that shifts away from traditional “command and control” to one that is more democratic and focused on user needs. With users taking over the role of managing their own device and app updates, It departments are free to advise and support ad focus on areas that are critical to the business.

1.  Which apps are likely to succeed: The vast app market has apps in every possible category. However, there needs to be some criteria by which enterprise mobile apps developers. This was well articulated by Raj Nathan, SVP at SAP who stated that there were two kinds of apps that developers should look at – one simply extends existing functionality onto mobile devices. This, he said, is not very compelling. The other kind are transformative in nature in  that they extend and enhance the role of the person using the apps. The example given was that of a truck driver who receives his or her travel route on a mobile device. This would be an example of the former type of application. Now consider if the same app also allows the driver to record and send back information about a competitor’s pricing and discounts tied to a particular store on their route. That person’s role is now transformed and indeed elevated to being a competitive weapon that can be used to decide marketing actions in real-time. What Raj Nathan is saying is that mobile apps offer the opportunity to fundamentally alter the playing field. So in what areas can such transformative apps be created for the enterprise. There are four according to Vishy Gopalakrishnan, Director of Mobility Solutions at AT&T:a.   IT change management
   b.   Knowledge management
   c.   Transaction management, and
   d.   Business analytics and reporting

The above list makes sense and there are apps in each of these areas but how many are really Transformative?

When it comes to developing mobile apps, It departments and developers must think differently about the purpose of the app taking into context its role in the larger business picture and by focusing on the transformative opportunity hidden within.

 

Recently, Techaisle conducted a very detailed study on SMBs adoption of Mobility Solutions across several countries. It is quite evident that Mobility Solutions are important for SMBs and a high percentage of these businesses are actively implementing them. The level and mode of implementation varies by country. For example, US & UK SMBs have a more holistic approach to mobility implementation that includes notebooks, smart phones, tablets, and applications. A country like Brazil is more focused on smart phone enabled applications with continued usage of notebooks.

What is interesting is that SMBs within countries such as Italy, Germany, Canada and Brazil have also indicated that they do not have a formal company policy to implement mobile solutions yet they are going ahead in an experimental fashion.

The chart below highlights the rankings within a country of various statements related to mobility solution implementation. The actual question was “To what extent do you agree or disagree with the following statements, where 1 is completely agree and 5 is completely disagree?”



Security and confidentiality about data on mobile devices consistently ranks #4 within all the above six countries. This is not to say that accidental loss of device with sensitive data is not of concern to the IT decision makers, but it takes a somewhat lower priority than mobilizing the organization. This is similar to the fact that notebooks have been used pervasively by the traveling workforce, however, not many SMBs have implemented any form of device lock-down, purge or recovery applications. Nevertheless, IT vendors should focus the attention of SMBs on device management especially when these SMBs allow employees to purchase and use their own devices within business environment.

Mobility solutions affordability has also ranked either 6 or 7 but when asked specifically the biggest inhibitor is the cost of device and data plan when adopting mobility solutions.

When SMBs rank “Mobility solutions are important but we do not know how to implement”, it does not mean that they know everything about mobility solutions. It simply suggests that there are SMBs who are satisfied with the simplest implementation of mobility that revolves around their unique business environment, ability to access information from anywhere and able to communicate and collaborate within the organization. However, the complexity of solutions varies by the type of business, availability of public domain cloud applications as well as the number of employees.

When we dig deeper into the data, we find that mid-market businesses are the early adopters of mobility solutions; small businesses do realize the importance of such solutions but have not yet been able to develop any formal company policy to implement

The top challenges to adopting new mobility solutions can be broadly divided into 4 groups – Cost and complexity, management and employee issues, network and device issues and security. Of these cost and complexity issues dominate SMB thinking.

Both small and mid-market businesses, cost of solution, data service pricing, and security are top concerns for implementing mobility solutions

More details can be found in our country level reports titled “SMB Mobility & Adoption Trends including Tablets & Smart phones”.

Tavishi Agrawal
Techaisle