More Mobile Consolidation Inevitable

By Chris Marsh, Principal Analyst, Enterprise Mobility, Yankee Group — January 27, 2014

AirWatch’s acquisition by VMware started this year with a bang. The fact that it happened says a few things. First, that the standalone enterprise mobility management (EMM) marketplace was not, is not and will not be the strategic center of gravity for mobilizing enterprises — a distinct and very valuable part yes, but not where most of the value ultimately for investing companies will lie.
 
Second, as one of the biggest (but admittedly one of the most highly leveraged) vendors, it rather suggests that life will become very difficult for those remaining stand alone players like MobileIron and Good Technology who will also likely be working on their exit strategies.
 
Third, it is illustrative of the appetite of larger IT service providers like VMware to invest in building up their mobile capabilities.
 
Next Wave of Consolidation
This all rather begs the question of where we should look this year for the next wave of industry consolidation and to think about what that means for enterprises. This article isn’t long enough to look market-wide but a good place to start would be the looming intersection of the triumvirate of EMM, mobile application platforms and API management vendors.
 
Put simply, it’s becoming clearer that the technology battleground for enterprises is mobility, applications and data—not devices—which will be the lightening rod for mobile strategy.
 
API programs will be needed to best enable the oncoming gold rush of modern mobile applications, and EMM will be needed to manage policy, security and compliance for the lot of this.
 
Of course this is not so simple in actual execution. There are significant architectural implications towards scaling mobility, but it will be somewhere in and around this triumvirate that we will see enterprises lay the foundation for greater automation in their workflows and greater scalability in their digital strategies.
 
Think Big
Why is this important for enterprises? Well, it demonstrates the need to think expansively. Enterprises are sometimes prone to think in silos; doing so in this time of technology flux is hugely dangerous.
 
Our IT Decision Maker December 2013 survey shows that almost 40% of all companies don’t have any kind of strategy whatsoever around mobility. For many of those there will be a fair amount of basic policy enforcement around, for example, device usage. The proportion of companies doing any kind of expansive strategic thinking around scale in their mobile projects will be few and far between. Those that are will likely will steal the march in execution.
 
Why is this important for vendors? Because consolidation is inevitable: Whether it is IBM acquiring Worklight or Fiberlink, CA acquiring Layer7 or VMware and AirWatch, mobility in the enterprise is too big a deal for neat standalone vendors offering key capabilities to survive.
 
Who next?
Innovative mobile application platforms like FeedHenry, Appcelerator and Anypresence are driving the agenda away from the failing MEAPs to a model for more cloud-friendly, scalable and agile platforms for the development, distribution and management of mobile apps. The more successful of these in their execution might be tempting targets for a larger IT vendor.
 
The same can be said for the leading API management vendors. Intel bought Mashery in April 2013 and CA Technologies acquired Layer 7 the month after. Remaining vendors like Apigee and SOA Software might make attractive targets. The state for MobileIron and Good Technology was mentioned earlier.
 
And there is no shortage of potential acquirers — Oracle, HP, CA Technologies, Salesforce, Citrix, even some of the systems integrators like Accenture, CSC or Cognizant, to name but just a very few — all companies with some skin in the game who will likely be watching closely to understand who would be a good fit for their growing vision for the mobile enterprise.

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