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Going Mobile? Get Help

As enterprises large and small grapple with the challenge of managing often bewildering arrays of mobile devices (many of them actually chosen and purchased by employees themselves) the concept of "managed mobility services" has rapidly taken hold across IT departments.

While the basic idea is simple -- outsourcing management and provisioning of mobile technologies to a third-party vendor or service provider -- the term "managed mobility" can mean very different things to different people.

"Basically managed mobility services consist of some combination of buying services from multiple carriers and managing those contracts, and providing an "IT-type" of support for mobile employees," explains Brownlee Thomas, principal analyst for telecom networking at Forrester Research Inc. "But what you understand that to mean varies widely depending on whether you're a user, a buyer, or a service provider."

In the past couple of years large players including systems integrators, carriers, and vendors have launched some form of managed mobile service. One of the first to make the move was Electronic Data Systems Corp. (EDS) (NYSE: EDS), which launched its service in November of 2003, in partnership with Vodafone Group plc (NYSE: VOD). That effort was slightly ahead of its time and not much has been heard of the pairing recently.

Other companies including AT&T Inc. (NYSE: T), IBM Corp. (NYSE: IBM), HP Inc. (NYSE: HPQ), and Lucent Technologies Inc. (NYSE: LU) have made similar announcements in the last year; in December 2005 Sprint Corp. (NYSE: S) actually formed a wholly own subsidiary, Sprint Enterprise Mobility, to provide managed services.

Multinational roaming alliances, such as FreeMove (started by Orange), and GlobalView (Cingular), also provide some level of managed mobility.

The providers, says SEM president Bill Halbert, are responding to pleas from their customers.

"Enterprise wireless on the whole is so fragmented, as the employees bring in these devices and start using them in the office environment," Halbert explains. "Until recently, the downside [for the enterprise] was limited to expense management. More recently, however, as the capabilities of devices like the BlackBerry have expanded, the downsides are accelerating, and IT departments are saying 'Oh my god, we've got to start managing these things that we didn’t even know existed in our environment.'"

The demand has also fostered the growth of startups like Movero Technology, an Austin-based firm founded in 2003 to help companies manage mobile devices over their lifespan, from procurement, to billing, to support and upgrades.

Movero, which offers its services as a brandable product via service providers, system integrators, and the like, had $6 million in revenues in 2005 and expects that to double this year, says CEO Bruce Friedman.

"There's clearly a gap in IT support for mobility that is going to create and increase the need for mobile outsourcers," Friedman adds. "We're hearing [the demand] go from sort of a faint din to a loud roar from our customers."

While cost savings is one appealing aspect of outsourcing mobile management, the primary reason for most companies is simply that IT is overburdened already. According to an as-yet unpublished Forrester survey of enterprises with over 1000 employees, 57 percent of American companies believe that setting a mobile and wireless strategy and policy is "critical or very important" for 2006, while 49 percent say the same about centralizing the management of mobile devices and services. The corresponding numbers for European companies are 58 percent and 42 percent.

With hiring and spending on IT departments still flat or growing slowly, a managed service is often the only way to go.

"We're at the stage where in effect the organization is asking the IT department or the CIO to begin managing and taking control of all of this mobile technology," says Halbert, "and the choice is either to get IT to do that or get someone like us to do it. And if you go in-house it's another huge burden on IT."

Because the market is still nascent, with many enterprises just now coming to the realization that they need help, the eventual size of the market for managed mobile services is impossible to pin down. Friedman, of Movero, claims the market will reach $2.4 billion in 2008 and $6.4 billion in five years. Citing the unpublished survey, Forrester's Thomas says that 54 percent of larger North American companies are either "very interested" or "somewhat interested" in procuring mobile or wireless services as a managed or hosted service in the next three years.

Companies considering the shift should pay attention to all the basic questions when purchasing managed services: Can the provider provide a guaranteed return on investment, and a lower total cost of ownership? Is customer service available online? Will the provider remain viable and capable of expansion as the market matures? And, finally, is the service provider able to offer management and guidance across a range of devices, carriers, and vendors?

— Richard Martin, Senior Editor, Unstrung

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