The451 Report --



Title: Will mobile middleware success hinge on technology or business issues?
Date: November 7, 2003
Report Type: Spotlight
Author: Tony Rizzo

We recently participated in an Intel hosted mobile software technology conference, joining 250 participants ranging from key mobile middleware and application development players to mobile hardware device makers to corporate folks trying to make sense of it all. Panel and roundtable discussions demonstrated several things.

First, from a hardware perspective, selling mobile devices is essentially a function of great software being available – good news for the mobile applications players. Second, it became rather clear that there is an underlying frustration with mobile device battery life as a mobile application deployment issue – most notably in the field force market, where laptops, tablets and PDAs are necessary tools. Third, and most interesting to us, there was significant disagreement regarding how easy or difficult it is to deploy mobile applications.

Our own ongoing coverage of mobile middleware and application development companies (refer to the featured links below for examples) tells us that the actual ability to deploy mobile applications within a given business is really not all that difficult – the position we took in related debates at the Intel conference. The players in this game have all taken on the challenge of creating usable mobile middleware layers and making deployments simple, albeit with their own unique approaches. We believe they've done a good job, collectively, of sufficiently abstracting the technical complexities that would otherwise make mobile deployments difficult and expensive propositions.

To ensure we're on the same page, we can define mobile middleware as the underlying technology needed to support building applications that allow a worker to operate continuously, seamlessly and transparently in an occasionally connected environment.

Common features of the middleware platforms we've covered include the following: connections to back-end systems that are available and reliable; synchronization capabilities that enable clients and servers to always be up-to-date with each other, either in real time or in store and forward situations, depending on whether one is operating in a wired or wireless mode; tools for capturing business processes (e.g., rules and alerts) and tying them to client-side software; an abstraction layer that allows for easy deployment to a wide variety of mobile devices (including laptops and tablets); strong support for wireless connectivity through a variety of wireless connection types (Wi-Fi, CDMA, GSM/GPRS, iDEN, Mobitex and others).

These are inherently difficult things to do, but the reality is that the middleware players – from more established companies such as Telispark to new companies just emerging from development like Open Terra – do, in fact, deliver here. A common theme emerges from talking to customers that have gone through deployments (whether pilots or formal implementations): their surprise at how simple the projects have ultimately been to develop.

The real challenges for most of the middleware pure plays really boil down to business issues – among them, getting in the door, overcoming inertia within the enterprise for developing mobile applications and finding a suitably large pool of deployments to create sustainable revenue. Beyond that we look for the mobile middleware companies to be able to upsell their services beyond initial deployments, particularly to other areas of a given enterprise.

Because the mobile market is still relatively nascent – whether through enterprise indifference, tight budgets that relegate mobile plans to third- or fourth-tier project status or other issues – we expect to see a lot of opportunity over the next 12 to 18 months for the companies in this space to land small deployments for their middleware infrastructures and to deploy successful mobile applications that ride on top of the middleware. What we will be on the lookout for is which of these companies can make the most of those initial deployments and expand on them through the basic metrics we've defined above: additional and significant seat deployments, upsells to more applications that ride over the middleware and expanding those applications to other departments within the same enterprise.

Although all the players here (with the exception of Open Terra, which is still in beta testing) have initial deployments and some real customers, very few can yet lay claim to measuring up per our metrics. One company that does is Telispark, which has been able to increase the penetration of its mobile field force applications in several of its key enterprise accounts – Shell, Nextel and the US Navy. A much smaller company that is moving forward along these lines is Shipcom Wireless, which we believe will soon announce a deal with one of its customers to greatly expand on an initial deployment. Aligo is notable for continuing to add new customers and for expanding its business into Japan, where there is less competition.

We won't rehash the details – which are found in our ongoing daily analyses of these companies – of every mobile player here, but it is clear to us that the technology per se isn't the cornerstone that will make or break a middleware company. Rather, the successful players will be those with better business capabilities – and available business resources (e.g. sales, marketing, customer support and the key ability to land large partners) – to grow their businesses beyond the technology. Most of these companies have indeed made it relatively easy to deploy mobile applications – those that can convince the Fortune 2000 to actually do so are the ones that will ultimately survive.

Looking 24-36 months down the road, we believe mobile middleware will migrate to and become an integral part of enterprise IT infrastructure. The large-scale IT vendors will drive this effort over time. We anticipate a scenario where those players that rise above the noise and survive will evolve into professional services companies specializing in mobile applications development, and not in mobile middleware/platform delivery. In vertical markets (such as healthcare) we anticipate that some of the larger independent software vendors and systems integrators that have developed major applications in their respective verticals will look to acquire mobile pure plays to bring their mobile applications expertise in-house.

Eventually, whether they remain independent or end up being acquired, the successful mobile players will be driven primarily by business, not technology, issues. We'll be exploring these issues in-depth in our next major mobile report, which we anticipate delivering in about a month.