Recent Trends in Enterprise Mobility

November 28, 2011

The enterprise mobility sector is rapidly growing as the demand for preferred personal devices such as tablets and smartphones, specifically Apple and Android platforms, continues to penetrate the enterprise with strong momentum. Moreover, Apple recently stated that the portion of Fortune 500 companies with a combination of testing or deploying of iPads and iPhones is 92% and 93%, respectively. Specific examples of enterprise use cases from a recent New York Times article include: airlines replacing printed flight manuals, navigation charts and other material that pilots are required to bring on board with iPads; and Standard Chartered, a financial services company, is supplying approximately 11,000 iPhones to employees in an effort to move them away from BlackBerrys, which have limited ability to create apps specific for their changing operations. The charts below show significant worldwide commercial tablet shipment growth, as well as increased tablet deployment in the enterprise.

“Consumerization” is driving the IT enterprise adoption of personal devices. There are a number of factors driving this movement, but the most important are employee demand, preference and “anytime, anywhere” access. However, accelerated adoption of these devices into the enterprise is leading to challenges and changes to find solutions that will enable full functionality, security, management and cost savings. As the volume of enterprise file-based content grows exponentially, businesses will continue to aggressively pursue initiatives that enable them to overcome challenges of integrating heterogeneous platforms and devices within existing infrastructure.

Industry leaders, such as VMware and Citrix, as well as a few smaller companies with expertise in the sector, recognize this tremendous opportunity, and are focused on developing enterprise secure solutions. Moreover, these mobile devices enable ideal synergies with SaaS and Cloud services. As such, adoption of enterprise mobility trends is anticipated to continue to drive an already active deal sector.

Overall, transactions within the enterprise mobility sector continue to be executed at a significant rate. Recent transactions of significance within this space include: Citrix’s acquisitions of both ShareFile (valued at 5.8x revenue) and App-DNA (valued at 5.9x revenue). Since the beginning of 2011, The 451 Group reported 342 deals completed in the Enterprise Mobility Sector, with 44 of those deals being done since Q4 (with a median EV / Revenue multiple of 4.0x).

-Frank Cordek, Associate

The Mobile Payment Reality Gains Traction

August 18, 2010

With the advent of increasingly more capable mobile phones, payment tech, and more specifically, mobile payment technology, the stage is increasingly set for the market to take off. Recent research calls for global mobile payment transactions to rise to $1.13 trillion in 2014, a CAGR of 94.8%, with the total number of users increasing to 351.4 million, according to IE Market Research Corp.’s 3Q.2010 North America Mobile Payment Market Forecast, 2010 – 2014.

We’ve written previously that security concerns, among other things, could hinder the adoption rate of payment technology, but venture capital firms are continuing to fuel the fire. Already Q3 investments in the sector include $7.5 million in funds for WePay, a group payment platform; $12.1 million in funding for eWise, a provider of online payments and financial management services; and $8.5 million for Wave Crest Holdings, a provider of e-payment solutions. On the mobile front, Payfone, a mobile payment provider, recently raised $11 million in venture capital investments.

Game-changing mobile payment technology in the U.S. is still a year or two away, however, even with the continuing evolution of super-smartphones and exponential growth in mobile apps. some companies are starting to acknowledge mobile technology as a coming force: Zong and Google’s latest acquisition, Jambool, have begun making waves by monetizing digital currency for mobile and social games, but there is still no real front runner. One exception may be eBay’s old-reliable PayPal, which recently teamed up with Google to let Android phone users pay for apps using PayPal instead of credit cards or Google Checkout.

The sector’s best bet for a break-out hit in payment technology is the advent of near field communication (NFC), which is a short-range high frequency wireless communication technology which enables the exchange of data between devices over a distance of a few inches. NFC accounted for 14.9% of mobile payment transactions in 2009 and is expected to increase to 32.8% by 2014 or 35.6 billion transactions. Traditional credit card companies have attempted to spark this trend through NFC chips placed in cards and contactless payment kiosks, but adoption has been slow (only about 26% of U.S. consumers have contactless credit cards).

The right combination of reliable financial institution and intuitive software provider, however, could put the wheels in motion for a mobile phone innovation. Apple recently brought in Benjamin Vigier, formerly of mCommerce vendor mFoundry Inc., as product manager for mobile commerce. While no one knows the company’s exact plans yet, Apple has quite a few patents under its belt for NFC technology, suggesting mobile payments made through iTunes, mobile marketing campaigns, and even airline ticketing services could just around the corner.

Globally, the number of mobile payment users is expected to rise to over 1 billion in 2014 for a CAGR of 20.5%, however, the adoption curve is not expected to accelerate meaningfully until sometime between 2011 and 2013. Money transfers, mobile payments and NFC services are three of the top ten uses expected by mobile consumers over the next few years. Given this expected growth, we expect to see traditional credit card providers and consumer banks team up with e-payment innovators, such as Visa’s acquisition of CyberSource in April. A pick-up in M&A for payment technology by consumer banking institutions is likely, or at the very least, we will see them begin to forge partnerships with the strongest payment technology start-ups. One thing is for sure: now is the time for combinations to start happening if these firms want to be at the forefront of the impending payment revolution.


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