Opportunity: Apps, operators, and wealth


By Cathal McGloin, vice president, mobile platforms, Red Hat

In its Decision-Maker Mobile Technology Survey 2015, analyst firm, CCS Insight found that 48% of respondents preferred to purchase mobile devices from mobile operators. However, a much lower proportion bought managed mobility services from their carrier.

In further research from CCS Insight [The Enterprise Mobile App Platform Opportunity for Operators] Nicholas McQuire, vice president of enterprise at the company, flagged the rising enterprise demand for mobile apps. He viewed this as an opportunity for operators to offer managed mobility services and thus expand their services beyond their core offerings of mobile and fixed line connectivity and devices, convergence and unified communications.

McQuire argued that offering mobile application development, management and back end integration services can enable operators to compete more effectively with cloud service providers as well as mobility specialists, value added resellers and systems integrators that have dominated the managed mobile services market to date. He believed that, while reliance on core network revenues offers limited growth potential for operators, the global market for managed mobility services is forecasted to surpass $10 billion in revenue in 2021, driven by enterprise demand for mobile apps.

McQuire suggests that operators can protect existing mobile connectivity and device management revenues and use mobile app platforms to expand their services, by offering mobile strategy consultancy and mobile application development services and technologies to enterprise customers.

Reduced complexity

In its earlier Decision-Maker survey, CCS Insight found that two of the top three challenges cited by enterprises when deploying mobile technology were supplier and market complexity and keeping up with technology changes.

By using enterprise-grade mobile application platforms, I believe that operators can help their enterprise customers to manage continuous mobile app development lifecycles and help meet the demand to deliver apps to market faster. They can also help reduce the complexity of integrating mobile apps with back-end systems by offering mobile backend-as-a-service (MBaaS) based on APIs and standard connectors. CCS Insight also points out the advantage of operators offering enterprises a single bill for air time and data usage, along with these managed mobility services.

The analyst firm argued that operators can offer enterprises the flexibility of deploying app servers on-premise, in the cloud, or using a hybrid arrangement, and also noted that operator-based managed mobility services can offer cheaper and quicker roll out versus on-premise, with lower ongoing support costs.

Growing market

Importantly, because operators manage enterprise apps over their own mobile networks, enterprise customers that are considering using operator-managed app development platforms can be aware of the geographic location where their data is hosted and managed.

Based on CCS Insight’s reports, there is an opportunity for operators to use mobile application platform technology to help drive new enterprise revenue sources.  The analyst firm cites a 50% increase in the global managed mobility services market last year, and forecasts a 40% compound annual growth rate over the next five years.

My own view is that mobility is often at the forefront of digital transformation projects, which are now evolving to include the Internet of Things (IoT). Since internet-connected devices may share many of the back end integration requirements that have already been addressed for mobile devices, establishing enterprise mobility services now could help place operators in a stronger position to offer IoT services in the future.

McQuire also points to the future revenue opportunities from IoT stating, “Operators that offer mobile app capabilities to the enterprise are well-positioned to expand the value of existing machine-to-machine portfolios.”

Given the opportunity and recent partnerships between operators and platform providers, it will be interesting to see whether there is a difference in the proportion of enterprises buying managed mobility services from their mobile operators going forward.

Red Hat is a provider of opensource software solutions, using a community-powered approach to provide reliable and high performing cloud, Linux, middleware, storage and virtualisation technologies. 


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