Mind the (Expense) Gap
"We real quickly saw that the CPMs [average cost per minute] started creeping back up," says Quanta IT director Jonathan Prater. "We went from around 13 to 14 cents per minute back to 19 in just a few months."
Prater did what any good IT pro would do: He convinced upper management to call the cavalry back in.
"We could definitely see they were saving us money during that time," says Prater, "but nobody had fully explained the benefits of using mindWireless to management."
A year after the initial contract expired, mindWireless started managing Quanta's mobile expenses once again. Today, CPMs for the company, which has $1.8 billion in annual revenues and 11,000 employees scattered across 40 states, are down to around 8 cents, even as usage has climbed to nearly 2 million minutes per month.
Rate-plan optimization of this kind has becoming increasingly valuable to enterprises seeing their employees' usage of mobile phones and other wireless devices skyrocket while company policies and procedures surrounding those devices have not kept pace.
"Of the customers we start [service] with, only 20 percent have a written policy for employee cellphone use," says David Wise, mindWireless's co-founder and operations manager.
That is changing as a result of several forces: Mobile expenses are going up both in absolute terms and as a percentage of companies' wireless budgets; devices are becoming more complex and more tightly integrated with (and important to) companies' daily operations; and corporate liability and tax-compliance issues are pushing IT departments to exert closer control over the management of mobile devices.
Founded in Houston in 2000, mindWireless is one of a group of boutique companies that have grown up in the last five to 10 years to help companies get a handle on their wireless budgets. Early in its existence the company focused exclusively on rate-plan optimization. Now its portfolio has grown to cover the entire lifecycle of mobile devices from procurement to expense management to security to device termination and replacement. At Quanta Services, for example, mindWireless helped the company find some 400 phones that had been basically tossed in drawers and forgotten about for more than 120 days. "A lot of our clients just outsource their wireless departments to us," says Wise.
Focusing on large enterprises with deployments of 1,000 cellphones and up, mindWireless is able to save companies an average of 30 percent on their mobile service fees. The company charges either a flat fee of about $4 to $6 per line per month, or a percentage of the total they save the client. The percentage varies between one third and 45 percent depending on the level of service.
In the case of Quantas, mindWireless charges both a flat per-line fee and a percentage of the total amount saved.
"I can't disclose the total dollar figure I've saved" through the mindWireless contract, says Prater, "but it's definitely paid my salary for the next few years already. There's very significant savings there."
Research firm IDC has predicted that of the $52 billion that will be spent on all mobile services by enterprises in 2010, some $1.5 billion, or almost 3 percent, will go to mobile device management and security. Recognizing that growing market, big carriers including Sprint Corp. (NYSE: S) (with its Sprint Enterprise Mobility spinoff) have moved into the mobile-expense management market, with mixed results so far. (See Going Mobile? Get Help .)
"I had a Sprint partner in California contact me about offering these services, but they can basically just manage Sprint phones," points out Prater. "MindWireless is not tied to one vendor -- they're independent of the carriers so they get us the best deal with whichever carrier fits our needs."
Wise says he expects his company's revenues to double in the next 12 months. The demands on firms like mindWireless will continue to rise as mobile-device deployments expand and grow more complex -- particularly with data-centric smartphones like BlackBerries and Treos. Quanta now has around 400 BlackBerry devices deployed and plans to increase that number. "The management is becoming more complex as the devices get more robust," notes Wise.
What's more, for IT managers willing to pay a percentage of costs saved for mobile-device management, the risk is virtually nil, according to Prater: "You have absolutely nothing to lose to give them a chance, and everything to gain."
— Richard Martin, Senior Editor, Unstrung