During the past 24 months, the industry has seen an explosion of activity and development on the new generation of Android and Apple mobile phones and most recently tablets. In the report 'Mobile App Internet Recasts The Software And Services Landscape' Forrester estimates that the revenue from paid applications on smartphones and tablets was $2.2 billion worldwide for 2010.
With all this activity and excitement, enterprises are jumping on the app bandwagon to reach customers and bolster the brand. Forrester’s Forrsights Software Survey, Q4 2010 shows that IT is stepping up its mobile app plans. Forty-one percent of the 2,124 North American and European software decision-makers surveyed in October 2010 said that increasing the number of mobile applications for employees, customers, and business partners was a high or critical software priority:
However, this will not come easy to IT departments. One of the issues Forrester sees is support: Given the rate of innovation at both the application and device/operating system levels, IT likely has to support three to four releases per year. This rate of change will tax a whole range of IT processes from project management to release management and testing. IT organizations should look for external help to build a platform to support their companies’ mobile plans.
Rarely a mobile conference goes by without this debate popping up: Should you build a mobile website or an application? I don’t think it really matters; in fact, I’d say it is irrelevant. This is just one of many topics where technology leads marketing by the nose— as is often the case in the mobile industry! Product strategists often forget to ask themselves the right questions: which product and services, for which audiences, at what cost, and when?
Consumer product strategists designing product experiences for mobile phones and smartphones must decide on their development priorities across the mobile Web and apps. While some believe this is a fundamental “either/or” choice, current consumer behavior suggests that consumers are using both. More than half of European (and 60% of US) consumers who download apps at least monthly also access the Internet via their mobile phones at least daily. In short, heavy app users are also heavy mobile Web users. The more frequently consumers access the Internet via their mobile phones, the more likely they are to download apps at least monthly. More than 10 billion apps have been downloaded cumulatively since the launch of the Apple App Store — the majority of them via iPhones. But this doesn’t stop iPhone owners from being the most frequent mobile Internet users: 72% of European iPhone owners (and 63% of US iPhone owners) access the mobile Internet on a daily basis.
My colleague Thomas Husson wrote a report last year in which he looked at ”The Future Of Application Stores.” Overall, uptake of apps is limited: Only 15% of European smartphone owners report downloading an app on a monthly basis. By contrast, 64% of European iPhone users download apps on a monthly basis. Looking at what consumers are interested in most, Forrester's Technographics® data shows that games, music, weather, news, and social networking top the list for both iPhone and other smartphone users.
Companies that want to develop a mobile strategy should begin with a solid understanding of how mobile-advanced their brand's consumers are and will be. Mobile Technographics® places consumers into groups based on their mobile phone usage. The groups are defined by the extent to which the mobile phone user has adopted mobile data services, the frequency of use of these services, and the level of sophistication in the mobile applications he or she uses.
I had the pleasure earlier this week of attending Lawson Software’s conference and user exchange, aka CUE, in Boston.
The midmarket ERP apps vendor had the singular misfortune to throw its annual user party at a time of great uncertainty for both Lawson and its customers. Lawson has yet to respond to an unsolicited $1.8 billion acquisition offer from ERP rival Infor, aside from acknowledging receipt of the offer on March 11. Despite the Infor elephant in the room, CUE was a good-humored affair. Lawson execs exhibited grace under fire while customers expressed concern but remained cheerfully stoic and pragmatic.
Do you think Lawson will end up part of Infor? Alternatively, will it remain independent or will it be bought by a private equity firm and no longer be publicly traded à la Epicor? As apps vendors try to navigate fluctuating revenue mixes — rising subscriptions versus falling maintenance — being privately held may prove to be an attractive option.
Lawson is currently evaluating whether to break out subscription revenue as a separate line item in its next fiscal year. Of its 4,500 largely on-premise customers, around 350 use a Lawson SaaS product, the fruit of purchases such as Enwisen and Healthvision. Like other apps players, Lawson’s embraced Amazon.com’s EC2 as the cloud infrastructure for its HCM, M3 and S3 ERP apps. Several Lawson cloud services early adopters at CUE talked about their organizations’ experiences and there were some similarities in those stories:
They faced hardware refreshes and/or obsolescence of the app and database versions they used
They were already successfully running third-party SaaS apps or remotely hosted software
They used Lawson managed services as a steppingstone between the on-premises and cloud services worlds
Your workforce is mobile and loving it. They love it because they can get things done anywhere, anytime, on any device. You can almost see happy tails wagging as they check their email. But they haver no idea how disruptive mobile devices are to the IT status quo. Sure, mobile email is a small dog to train. But what about mobile business apps? That dog is bigger than a rhinoceros.
To keep your workforce loving your business applications as they go mobile, you will have to redesign the fundamental architecture for delivering apps. The architecture of Client-Server (and Browser-Server) is inadequate. You will need to build from an architecture of devices and services. The mobile app Internet is that architecture: local apps (including HTML5 browsers) on smart mobile devices and cloud-hosted interactions and data.
My friend and colleague John McCarthy has written a seminal report for Forrester clients sizing the market for the mobile app Internet. In this report, he lays out the growth model for mobile apps (six drivers of growth), segments the market for mobile apps+services (mobile apps, application development, mobile management, and process reinvention), and sizes the total mobile apps+services market ($54.6B by 2015).
This is an important report. Everybody should read it. Here's my take on what it means for content and collaboration professionals:
Starting with CES in early January and through the Mobile World Congress last week in Barcelona, the mobile industry has been in a feeding frenzy of announcement activity. At CES, it was centered on Android-powered tablets. During the Mobile World Congress, it was about the big Microsoft/Nokia deal and vendors scrambling to differentiate their Android handsets.
But behind all these announcements, there is a broader shift going on to what Forrester calls the mobile app Internet and the accompanying broader wave of app development and management. We have just published a report that explores the different vectors of innovation and sizes the mobile app Internet from an app sales and services opportunity.
The report looks at the three factors beyond hardware that will drive the market:
Even at $2.43/app, the app market will emerge as a $38B market by 2015 as more tablets and smart phones are sold and the number of paid for apps per device increases due to improvements in the app store experience.
A perfect storm of innovation is unleashed by the merger of mobile, cloud, and smart computing. I see innovation coming from the combination of apps and smart devices like appliances and cars, improved user experience around the apps by better leveraging the context from the sensors in the devices, and enabling the apps to take advantage of new capabilities like near field communications (NFC) for things such as mobile payments.
The consumer appetite for smartphones shows no signs of slowing in 2011 and neither does the growth of the mobile channel at leading retailers. eBusiness leaders, who have been focused on replicating the online store experience on mobile are now turning their attention to new mobile innovations that will not only drive revenue growth for the mobile channel but create an immersive multichannel consumer experience that bridges the gap between online and in-store shopping.
Location-based commerce is one such innovation that is gaining interest among eBusiness leaders responsible for mobile strategy. Some retailers have experimented with third-party location-based services including foursquare and Shopkick to roll out location-aware mobile coupons. A few retailers have innovated further and are developing location services into their own mobile shopping apps beyond the basic "store finder" feature to create new ways to interact with shoppers via their smartphones. With my latest research, Location-Based Commerce: An Evolution In Mobile Shopping, we look at how consumers' mobile shopping habits, location technology available in newer generation smartphones, and mobile push notifications have matured sufficiently to empower a new set of location aware multichannel experiences. Retailers are using geo-fences defined in the vicinity of their brick-and-mortar stores to attract nearby consumers by sending relevant, timely, and location-aware messages to customers' phones.
Today’s deal between Microsoft and Nokia acts as a temporary lifeline for both companies. It gives Microsoft access to the largest handset provider, and it allows Nokia to defray some of its operating system development costs. I have just finished a report, “Mobile App Internet Recasts The Software And Services Landscape,” that will hit the Forrester site on Monday, February 28.
In the report, Forrester states, “The explosion of app innovation that started on the iPhone and then spread to Android devices and tablets will continue to drive tech industry innovation and have far-reaching pricing and go-to-market implications for the industry. Three different vectors of innovation that have been percolating under the surface will combine over the next 3-5 years. Mobile, cloud, and smart computing together will foster a new set of 'intelligence everywhere' apps.”
And based on that research, I believe that deal does not address the biggest issue for both companies – attracting apps and app developers. For Nokia, it now sends the message that Symbian and MeeGo platforms are no longer the long-term app focus. For Microsoft, it creates an eight-to-twelve month void/pause as developers wait to see what the new Nokia hardware looks like.
At the current rate that Apple and Android are recruiting third-party and enterprise app developers, this could mean a gap of 100,000-200,000 applications by the time the first Nokia Windows Phone device ships. This is likely a lead that even the combined resources of Microsoft and Nokia could not bridge.
As 2010 draws to a close, what are the key trends that customer management process professionals need to pay attention to as you finalize plans for next year?
Here are the top trends that I am tracking. My full report that spotlights our latest research will be published in January.
Trend 1: The Revenue Impact Of Poor Customer Experience Is Recognized
Our models estimate that the revenue impact from a 10 percentage point improvement in a company's performance, as measured by Forrester’s Customer Experience Index Score (CxPi), could be in excess of a billion dollars. Poor performers are particularly weak in being able to orchestrate multichannel interactions.
Trend 2: Business Process Management Extends To The Front Office
By extending business process management (BPM) to the front office functions, customer service organizations will improve the consistency of service delivered, elevate agent efficiency, personalize service, and meet compliance goals — at a cost that makes sense to the business.
Trend 3: The Business Value Of Social Customer Engagement Becomes More Evident
Winners of Forrester’s annual Groundswell Award spotlight how organizations are using Social Computing to innovate, such as: community-based marketing research techniques; engaging with customers through social media; energizing brand advocates; empowering communities to support customer self-service; and collaborating with customers during the product ideation and development process.
[As promised, here's the first in the series about the tech industry's drive to reduce complexity.]
Remember the magic number? It's the one thing from Psych 101 that you should recall, since it pertains to memory. The brain has an upper limit on the number of chunks of new data it can stuff into working memory at one time. The number is around seven, plus or minus one or two depending on the person and the task. It's the limitation that makes the old game Simon challenging, and that bedevils us when we try to remember a phone number that someone just told us.
The magic number is one way in which the human brain tries to trim down complexity. Another more recent discovery is the brain's fuzzy boundary between literal and metaphorical statements. Attach a candidate's resume to a heavy clipboard instead of a light one, and the interviewer is more likely to treat the candidate seriously, because the resume seems somehow weightier.
Countless other examples exist where the brain takes shortcuts, filters information, and otherwise simplifies the constant, complex stream of perceptions, thoughts, feelings, and actions that would otherwise turn into a "blooming, buzzing confusion." We're not stupid creatures, but the machine that grants us powerful mental capabilities also puts limits on them.
The Death Star Would Be Great If I Could Figure Out What All These Buttons Do