Enterprise mobility: Symantec’s acquisitions are a sign of things to come

OVUM VIEW

Summary

Ovum has been expecting to see heavy consolidation in the fast-growing but overcrowded enterprise mobility market, and Symantec’s acquisitions of specialist mobile device management (MDM) supplier Odyssey Software and mobile application management (MAM) vendor Nukona therefore come as no particular surprise.

The acquisitions are symptomatic of the competitive threat posed to the specialist vendors by the arrival of the larger names into the market. Ovum’s recent Solutions Guide: Enterprise Mobile Device Management Vendors demonstrated that Symantec Mobile Management (SMM) is unable to match specialists such as AirWatch, BoxTone, Fiberlink, MobileIron, and SOTI for depth of technical MDM capabilities. However, what it can do is use its brand and existing customer base to good effect, and also go to the war-chest to buy its way further into the market. Acquiring smaller, specialist vendors such as Odyssey and Nukona will give Symantec improved enterprise mobility capabilities and improve its overall value proposition.

We expect to see further consolidation of the enterprise mobility market along these lines, as the likes of McAfee, IBM, and Dell extend into it. The competitive landscape will shift over the next 24 months, and at the end of that period a much smaller number of dominant players will remain. These will include some of the biggest and strongest enterprise mobility specialists, as well as some of the bigger names with a background in security, IT service management, and enterprise application development.

The mobile device management market is growing fast, but is overcrowded

Mobile consumerization, whether in the form of BYOD or the centralized provision of consumer-focused devices, is creating a multi-platform mobile environment that poses security risks and challenges for the IT departments of organizations across every vertical. MDM vendors are stepping in to meet these challenges, and are witnessing huge demand and growth. Over the last 24 months, most of the vendors that we have spoken to have reported upwards of 100% client and revenue growth in MDM operations. This applies whether the vendors are recent startups or have been operating for a much longer period: all are experiencing similar levels of growth.

The opportunity provided by consumerization has attracted vendors with a variety of backgrounds into the enterprise mobility space, including some of the bigger name security, ITSM, and enterprise application vendors. However, it is an immature market, and even given such strong growth it will not be able to sustain so many different vendors. We expect to see consolidation, and the acquisition of relatively small enterprise mobility specialists by big-name newcomers is likely to become a regular occurrence.

Buying into expertise makes sense for new names looking to make an impact

The current leaders in the enterprise mobility market are mainly specialist vendors such as AirWatch, BoxTone, Fiberlink, MobileIron, SOTI, and Zenprise. Sybase, an SAP company, also has a very strong presence through its Afaria product. With enterprise mobility as their only focus, these vendors support a wide range of mobile OSs. They have a deep set of core MDM capabilities such as device recognition and enrolment, remote lock and wipe, encryption, activity tracking and logging, and realtime reporting and alerts.

As the Ovum solutions guide shows, the larger vendors with a much wider IT focus that have recently entered the market are mostly unable to match the specialists for core technical capabilities. However, the likes of IBM, McAfee, Symantec, and Dell are using their existing customer bases and strong brand reputation to drive their MDM solutions. They also have greater financial resources to call upon, and as Symantec is demonstrating, buying specialist vendors is a quick way to improve their technical product offering.

The first commercial version of Symantec’s enterprise mobility solution, SMM 7.0, was launched at the end of 2010, and the security vendor has since been aiming to quickly catch up to the competition. Acquiring Odyssey Software has allowed it to immediately improve its support for Android smartphones, as well as to extend its support to Windows Phone 7 devices, to which it had not previously catered. The acquisition also provides Symantec with code and expertise that will speed up future development and releases. Nukona’s technology will enable the vendor to secure mobile applications without needing to have control over the whole device, as it adds a layer of management to the native and web-based apps that organizations want to secure. Symantec’s Secure App Center, based on Nukona’s app “wrapping” technology, is scheduled for launch in April 2012.

Expect to see further consolidation in the MDM space

Symantec’s acquisitions demonstrate the main competitive threat that now faces specialist enterprise mobility vendors: big name vendors entering the space, making acquisitions, and attracting all the customers. SAP already has a sizeable chunk of the market through the success of Sybase Afaria, and with the likes of Symantec, McAfee, IBM, Dell, and RIM all moving in, it is highly unlikely that many of the smaller players will survive in the long term. Ovum expects to see heavy consolidation in the MDM market along these lines, with similar acquisitions and other vendors simply going out of business or exiting the space.

As mobile consumerization takes a stronger hold, and as the enterprise mobility market matures, the competitive landscape will change. We expect to see a few truly dominant vendors emerge over the next 24 months. These will be a mix of the strongest enterprise mobility specialists that manage to carve a sustainable niche for themselves, and the “usual suspect” large security and ITSM vendors that have the reputation and resources to buy their way in.

APPENDIX

Further reading

Solutions Guide: Enterprise Mobile Device Management Vendors, OI00135-029 (March 2012)

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