The Enterprise Mobility Study

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Indian Market Analysis

Agenda

Scope & Definition of Enterprise Mobility

Key Enterprise Mobility Trends

The scope of enterprise mobility encompasses hardware, network & data, applications and associated services

+

• LAN • WLAN • WWAN • GPRS • Edge • CDMA • UMTS • HSPA • WiMax • LTE

Hardware/ Platform

Network & Data

• Email • SFA • Field Service • ERP/ CRM/ BI • SCM • Social/ Collab • HR • Finance • Vertical apps • Others

+

Applications

Middleware, hardware components

• Smartphone • Tablet • Handheld • Feature

phone • iOS • Android • Symbian • WebOS • Blackberry

Professional Services, System Integration

Quality & Usability Testing

Enterprise Mobility Management

Asset Lifecycle Management

Expense Management

Application Management

Help Desk

Security Management

Agenda

Scope & Definition of Enterprise Mobility

Key Enterprise Mobility Trends

Certain key themes have emerged in the enterprise mobility market in India

Key Trends

Accelerated Growth of Enterprise Mobility

Ecosystem Play in Market Development

Concerns on Security and Integration

Increased Start-up Activity in Mobility

Moving Beyond Email

Declining Costs & New Opportunities

a

f

e

b

c

d

The Indian Enterprise mobility market has rapidly evolved over the last three years a

$38.6

$94.1

$244.0

$0

$50

$100

$150

$200

$250

$300

H1 2009 H1 2010 H1 2011

Enterprise Mobility Market (excluding Devices) in India, USD Million

Average cost of smart devices of USD 125-150 adds over an above the enterprise mobility market

36%

8% 20%

16%

10%

10%

Apps & Customization Network & DataProf. Services/ SI Backend HW/ SWUsability & Testing Security & Compliance

Enterprise Mobility Market Split by Service Lines

Unlike developed markets, developing countries are emerging as “mobile first” markets

Country Mobile

Subscribers 3G Penetration Internet Users

Installed PC Base

USA 350 Mn 47% 245 Mn 295 Mn

Germany 107 Mn 28% 66 Mn 55 Mn

Brazil 215 Mn 10% 76 Mn 42 Mn

Russia 221 Mn 5% 60 Mn 50 Mn

India 840 Mn 1% 100 Mn 25 Mn

China 896 Mn 6% 477 Mn 230 Mn

iPhone 74

Notebooks 180

iPod 360

Number of Days to Reach 1 Million Units Sold (Global)

iPad 28

a

Devices penetration in India has been rapidly increasing

There are about 840 Million active mobiles

operational in India

12.2 Million user

base of 3G has been garnered in India

There is an installed base

of 25 Million computers in India

Smart Phone market

share is about 15% in

India

On an average of about

15 Million mobile

subscribers are added every month in India

The tablet PC market in

India sells about 1 Lakh tablets per

annum

The PC penetration in urban household has

reached 38%

The laptop market is

growing at a CAGR of 50%

One of the fastest

tablet affinity worldwide

a

A combination of demand side trends accelerated the acceptance of mobility experience in India

• Industries leading the way in applying mobility services to their operations include banking, manufacturing, retail, hospitality and healthcare. Eg. HDFC, ICICI, Tata Chemicals, Godrej, Future Group, Dr. Reddy’s Laboratory etc.

Early Adopter Industries

Key Demand Trends in Enterprise Mobility

• Automotive, logistics and consumer goods companies are increasingly using mobile supply chain systems to streamline inventory management, replenish stock, track demand, and manage shelf space and storage in an optimal manner. Eg. Lucas TVS, Future Groupd, Eureka Forbes, AFL couriers

Emerging Industries for EM

• As more and more employees are getting exposed to next generation technologies and devices, the enterprises are beginning to follow suite . Eg. SAP India is using more than 200 iPads, Hero Honda gave iPad 2 to its top executives in India, Adobe provided HTC smartphones to all its employees etc.

IT Consumerization as an Enabler

• The wider acceptance of social media is combining with greater usage of smart phones and tablet PCs to create the mobile office, where well-connected employees can work from virtually anywhere. As a result, more employers are providing flexible work arrangements for employees, including flexible schedules and telecommuting options. Eg, IBM

Telecommuting and “Work from Anywhere”

• The acceptance of social media as a business communication and collaboration tool has gained momentum as more people access Facebook, Twitter, YouTube, and LinkedIn from their mobile devices. Moreover, these social networking sites are being used as marketing walls by companies like Flipkart, Healthkart, Yebhi, etc.

Social Media as a Business Tool

a

The convergence of a variety of drivers is enabling the faster adoption of mobility solutions in India

18%

18%

18%

32%

34%

46%

50%

0% 20% 40% 60%

Supply chainmanagement

New businessopportunities

Reducing operatingcost

Staying competitive

Employee satisfaction

Productivity advantage

Better CustomerService

Key Business Drivers

42%

58%

64%

67%

69%

0% 20% 40% 60% 80%

Reducingcommunication costs

Pull from end users(customers or

employees)

Get more work timeout of employees

Collaboration amongstemployees

Push from topmanagement

Key Reasons for Mobility

*Analysis based on survey responses of 150 IT decision makers in India

a

As enterprise mobility moves from being a concept to reality, a variety of innovative use cases are parallely emerging

a

BFSI

Financial Inclusion – Central Bank Loan repayments – HDFC Collections – Bajaj Auto Finance

Pharmaceuticals

Medical Reps – Dr. Reddy’s Lab Senior Management – Novartis

Construction

Business Intelligence – ISPAT SCM – Ultratech Cement

Chemicals

Unified Communication – Tata ERP/CRM – Coromandel

Fertilizers

Automotive

Query & Alerts – Lucas Senior Management: Hero group

Hospitality & Real Estate

Customer Service – 4 Season’s Home Automation – Lodha Grp. Sales - Unitech

a b c

d e f

Transport & Logistics

Proof of Delivery – AFL Couriers Fleet Tracking – Mag Logistics

Retail

Store Operations – Pantaloons Customer Service- Shoppers Stop ERP/CRM – ITC

Consumer Durables

Order Management – Usha Int. Dealer Sales – Godrej CRM - Voltas

d e f

A lot of entrepreneurial/ start-up activity is being observed in the mobility space in India

Number of Digital Start-ups in India

Total Digital Start-ups = 750

• Rapid growth of mobile/ smart devices penetration in India has presented a lucrative opportunity

• Many tech companies such as RIM, Qualcomm, Intel etc. are looking to provide seed funding and venture capital to start-ups working in the mobility space in India

• National Capital Region (NCR), followed by Bangalore are the hubs for mobility start-ups

• Ojas ventures has funded companies such as

Tyfone in India

• JiGrahak, a mobile commerce start-up recently raised USD 10 million from Nexus India Capital

Marketplaces 39.7%

Mobility 23.6%

E-Commerce/ Shopping

20.8% Media/ Ent.

6.4%

Others 9.3%

b

Increased acceptability of majority of the mobile platforms is a key motivation factor for start ups

Mobility Platforms Supported by Indian Enterprises

b

*Analysis based on survey responses of 150 IT decision makers in India

27%

34%

98%

28%

13%

8%

26%

21%

4%

50%

29%

41%

63%

15%

11%

2%

10%

21%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

iOS

Android

Blackberry

Windows Mobile

Symbian

Already supported To be supported in next 2 years Will never be supported Not Sure

The relative ease of development and conducive ecosystem are the key drivers for start-up activity in this space

Apple Android Blackberry Java Symbian Windows

Easy

Medium

Hard

Ease of Development

• Convergence of ecosystem including end users, telcos, device manufacturers, and developers is providing a conducive environment for mobility solutions

• Increase in support forums available across platforms makes it convenient for the entrepreneurs/ developers to build on top of these platforms

*Analysis based on survey responses of 200 developers/ start-ups/ entrepreneurs/ freelancers in the mobility space

b

Case studies of mobility startups b

Preludesys

AccelTree

Mobien Technologies

iPath Technologies

• Preludesys is a 10 year old company with 3 year experience in the Enterprise Mobility Front

• Developed a flagship Enterprise Mobility Platform named “AnB” and offer mobile application development and customization services

• Key customers include Yamaha, Zenstar, Epson etc. • Ranked as one of the fastest growing company based on

recognitions from Deloitte, Inc. 500 consecutively for the last 6 years

• Mobientech was founded in 2006 and is focused on providing Enterprise Mobility solutions

• “iNotify™ “ is their Mobile Application framework which enables enterprises to deploy enterprise CRM and ERP solutions to the mobile platform

• Key customers include Bajaj, Dalmia Cement, ITC ltd.etc. • Deployment of iNotify in Nagarjuna Fertilisers for the

supply chain automation was chosen as one of the Top 50 IT implementations in 2007 by PC Quest

• iPath Technologies is an 8 year old company providing mobilization solutions for business and consumer application

• Developed “iAllWays™ Enterprise Mobilization Platform” to serve the Enterprise Mobility in India

• They are currently working with a large SI for deploying Enterprise Mobility Solutions and are doing a POC for companies in FSI space

• AccelTree software is a 8 year old company • Designed their own MEAP by investing 3 years in R&D.

The platform was specifically developed for the India market

• Key customers : Not revealed • Have developed innovative mobile application

deployment offerings in the form of pay-by-use, own-the-license and mobility-by-demand model

While e-mail is the most commonly used mobility applications, IT decision makers are also starting to look at other application segments

c

98%

35%

41%

49%

31%

24%

20%

12%

33%

25%

6%

14%

2%

41%

39%

25%

41%

45%

37%

47%

20%

25%

43%

39%

0%

24%

20%

25%

27%

31%

43%

41%

47%

49%

51%

47%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Corporate e-mail

Social Networking

Professional Instant Messenger

Sales Force Automation

Customer Relationship Management

Enterprise Resource Planning

Supply Chain Management

Unified Communication

Time Management/Billing

Field Service

Consumer Instant Messenger

Global Positioning System/Location Based Services

Deployed In the next 24 months Not sure

Applications Already in Use or to be Used in the Next 24 Months

*Analysis based on survey responses of 150 IT decision makers in India

As enterprise mobility matures among organizations, lot of internal departments will look to mobilize in the next 24 months

84%

90%

78%

49%

73%

37%

37%

31%

31%

16%

10%

2%

4%

10%

10%

18%

6%

6%

24%

10%

2%

0%

4%

16%

4%

14%

12%

18%

10%

18%

4%

8%

14%

25%

14%

31%

45%

45%

35%

57%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

IT

Executive/Corporate Management

Sales

Operations/Facilities Management

Marketing

Finance

Field Service

Customer Service

HR

Retail

Already mobilized To be mobilized in the next 24 months No plans to mobilize Not sure

Mobility Status of Various Functions at Indian Enterprises

*Analysis based on survey responses of 150 IT decision makers in India

c

As companies optimize their mobility investments with innovative approaches, the operating cost is expected to come down in the future (1/2)

d

61% 34%

2% 2%

INR 0 to INR 2,500 INR 2,500 to INR 5,000

INR 5,000 to INR 10,000 INR 10,000 or more

Operating Spend of Enterprise Mobility/ Person/ Year

10%

4%

2%

22%

22%

40%

0% 10% 20% 30% 40% 50%

Not Sure

Increase by more than15%

Increase by 10-15%

Increase by 5-10%

Increase by 0-5%

Decrease

Change in Mobility Operating Spend in the next 2 years

*Analysis based on survey responses of 150 IT decision makers in India

As companies optimize their mobility investments with innovative approaches, the operating cost is expected to come down in the future (2/2)

d

• Tighter expense management policies to control mobility expenses

• Cloud ready backend infrastructure. Cloud application access through mobile

• Established companies as well as start-ups experimenting with capex models

• Cost of mobile phones and tablets decreasing rapidly

Reduced Hardware

Costs

Managed Services &

Pay Per Use Models

Business Policies for

Mobility Usage

Cloud Based Applications

While enterprise mobility adoption is increasing, there are certain key challenges enterprise are struggling with (1/2)

12%

8%

12%

12%

0%

4%

0%

0%

6%

12%

10%

6%

4%

4%

0%

2%

2%

6%

2%

8%

22%

8%

31%

14%

6%

24%

10%

2%

20%

24%

25%

20%

29%

31%

24%

28%

14%

50%

32%

29%

20%

33%

20%

31%

35%

24%

35%

34%

26%

22%

12%

25%

4%

8%

35%

18%

39%

8%

14%

4%

0% 25% 50% 75% 100%

Locate/track devices

Software license conformance

Device Life cycle Management

Remote helpdesk

Security policies

Support Cost

Data Breaches

Usability

Device downtime

Supporting work & personal devices

Very Low Low Medium High Very High Very Very High

Intensity of Issues with Enterprise Mobility

e

While enterprise mobility adoption is increasing, there are certain key challenges enterprise are struggling with (2/2)

e

The average salary per employee in India is relatively very less and it is difficult for enterprises to give devices more that the salary of the individuals. Hence adoption is restrained to only senior level

Indian stakeholders are not very well informed about the advanced solutions being employed in other emerging geographies. There is also a lack of successful Indian case studies being preached

Indian customers are found to be very demanding. The expectation is to get everything delivered on the phone. Customers want out of the box (OOB) solutions

Most of the industries lack a standard supply chain. Also vernacular content is a huge challenge

Absence of key large player focus and lack of confidence with niche players is restraining large enterprises to move to mobile applications for core business

Lack of business centric mobile applications as well as back end integration of applications is a challenge and hence adoption is currently at the dashboard, reporting level

In case of full functionality applications, manageability is challenging. Security, compliance, provisioning, wireless management, lifecycle management, asset management are a additional costs

All ecosystem stakeholders are starting to play a key role in influencing the decision towards mobility solutions adoption

Ecosystem Category Illustrative Players

Hardware Vendors HTC, Motorola, Apple, RIM

ISVs Microsoft, Google, Oracle, SAP, McAfee, SFDC

SI/ VAR/ Professional Services TCS, Infosys, Wipro, HCL

Network Provider Airtel, Vodafone, Aircel, Tata DoCoMo

Middleware Provider Sybase, Antenna Software, Rhomobile

Illustrative List of Ecosystem Players

f

These ecosystem stakeholders seem to be converging towards a few strategic bets with respect to the enterprise mobility solutions in India

Hardware/ OEMs

Flux of low cost tablets with touch screen UI

Aggressive enterprise push by OEMs

Increased focus from tier 2 OEMs from India/ China

Partnerships with application & service providers

Service Providers/ ISVs

Acquisitions & partnerships towards EM solutioning

Focus on professional services/ customization

Security & compliance related architectures

ME Application platform focus

Telecom Operators/ ISPs

Primary collection agents

Forging existing relationships with enterprise customers

Focus on cloud based/ on demand mobility solutions

Email as the primary workload

f

Network and Connectivity in India will Drastically Improve in Next Five Years (from 2010 to 2015)

9x increase in IP traffic

to reach 1.2 Exabyte per month in 2015

10x increase in IP traffic

per capita to reach 1.0 Gigabyte per capita in 2010

114x increase in mobile

data traffic to reach 339 Petabyte per month in 2015

Indian mobile data traffic

to grow 4x faster than

Indian fixed IP traffic from 2010 to 2015

56x growth in average

mobile connection speed, reaching 1,037 kbps in 2015

In India, there will be 1 billion networked

devices in 2015, up from 570 million in 2010

4.1x growth in average

broadband speed to reach 4 Mbps in 2015

7% of broadband

connections to be faster than 5 Mbps in 2015, up from 4% today

28% of India’s total IP

traffic to be through mobile in 2015, up from 2.2% today

Source: Cisco

As a result, the enterprise mobility market will reach about USD 1 billion by mid of 2015

$38.6

$94.1

$244.0

$964.4

$0

$200

$400

$600

$800

$1,000

$1,200

H1 2009 H1 2010 H1 2011 H1 2015

Enterprise Mobility Market (excluding Devices) in India, USD Million

• A multi-fold growth expected in the enterprise mobility space going forward

• ERP, CRM, SCM, SFA along with email solutions to fuel the growth of the market

• Application maturity increase from the current dash boarding level to complete backend integration

• Declining costs of mobility solutions along with innovative business models would enable smaller companies to join the EM bandwagon as well

• Supply side investments towards addressing the challenges of security & data breaches to encourage rapid adoption of EM solutions

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