How arduous is it for the average enterprise to manage mobile applications?
It's tough. It's challenging to design the right application, getting it to work right on the network, or figuring out which devices to choose, and new challenges pop up all the time. Just this week I met with a client running voice and data services using Nextel, and they'd like to do both at the same time, but they can't because their devices can't support voice and data simultaneously. And when they send data, it takes 12 to 15 seconds to send it, and they can't make any calls during that period. So finding ways to overcome issues like that is a challenge. In your recent brief, you propose outsourcing as a method to save companies time and money. What kinds of outsourcing are you talking about?
There are a lot of functions, such as managing voice and data services, that are not a core competency of most companies. Others are bringing on new users, technical support for users, doing paperwork with expenses and billing. Since a lot of these things aren't part of what a company should be doing, there's an opportunity to let people who can do it well manage those things. It's not even on a technology basis, it's more about support.
Many companies, after figuring out just how many users they have, realize they're spending more than they thought on certain management aspects. Others have to deal with users who come in ad hoc. Plus service providers are trying to balance products and services for the right audiences, and a lot of time business users come out on the short end of the stick. What are the biggest benefits to outsourcing?
You can potentially manage those mobile services better and reduce costs. If you have several hundred mobile users, and it costs $100-$200 per year to support each user, but outsourcing that support would cost $60-200 per user, then you know there's a potential gap where you can save some money by outsourcing.
You can also provide better service to your users, and maybe even provide more services because your costs are lower. Plus it lets you focus on key issues and take advantage of your strength, which is focusing on IT. How difficult is it to make the transition from in-house to outsource mobile application management?
The biggest problem is finding the right company to work with. A lot of these solutions are still maturing, and we're still seeing new services all the time. One provider says they'll give you a service level agreement (SLA) that lets you quit after 30 days if they don't live up to the agreement and they'll give you your money back. You said in your report that the market is immature. How so?
A lot of these outsourcing services are being provided by small companies. They understand the mobile market and they're specialists, but they're not much bigger than startups, so there are questions as far as the viability of these companies go. As far as the big companies go -- IBM, HP or EDS -- they haven't gone into mobility as much yet because it's still a pretty small market. Who are the leading players right now?
Right now you have folks like ProfitLine and Traq-Wireless as some of the bigger ones, but right now they have tens of thousands of customers, not millions. How do you see the market evolving?
I think eventually it's going to evolve because more traditional telecommunications service providers are looking to get involved. Those who want to just resell their own services, that's going to become a problem. But I think there are a lot of others who will want to get into the space as it expands. And as the big cellular companies become part of larger telecommunications companies and the big mergers get completed -- Verizon's purchase of MCI and SBC's purchase of AT&T -- those will have an impact as well.