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TMCNet:  Why IBM is betting big on mobile apps [Strategy] [Times of India]

[February 26, 2013]

Why IBM is betting big on mobile apps [Strategy] [Times of India]

(Times of India Via Acquire Media NewsEdge) BANGALORE: ING Vysya Bank, with around 500 branches and an additional 500 ATMs, is too small to compete with the banking titans directly. So it does what small companies do in such situations: use tact and finesse to lure and retain customers.


The bank was evaluating technology options to use mobility as a strategic edge, when it was attracted to an Israeli company, Worklight. This startup, set up in 2006, had a useful piece of technology.

It enabled companies to create, in one seamless process, an application that could work in any device: a laptop, iPad, iPhone, Android phone... Its capabilities were impressive, but there was one problem.

Worklight did not operate in India. This was in early 2012. Soon after, ING Vysya heard an interesting piece of news: IBM was acquiring Worklight.

IBM, which had worked hard to build formidable products and services in cloud and analytics, had suddenly found itself inadequate in mobility, a rapidly-emerging area that was becoming a conduit to these two businesses.

With IBM having a substantial presence in India, ING signed up with Worklight quickly. IBM went on to acquire more companies, totaling 10 in the mobility space in four years, and launched a brand called MobileFirst.

"We are planning to double investments in mobility this year," says Ed Brill, director of IBM Mobile Enterprise Marketing. MobileFirst, as the name implies, asks companies to turn their current development philosophy on its head.

Instead of making mobile applications an extension of their desktop software, IBM is asking companies to design mobile applications first and then think about the rest later.

For them to do this well, IBM has spread a splendid set of tools: a mobile development platform, a security platform, a mobile device management product, mobile analytics, an ecosystem which includes service-provider A&T (only in the US) and universities, and a plethora of services around of them.

Although not mentioned explicitly, it would include a cloud service also, often serving as a critical part of mobile services. Mobility is now considered as one of the mega trends affecting the IT industry, on par with three trends that defined and directed it earlier: Mainframe, client-server and internet.

Many chief information officers and analysts now bundle mobility with other recent developments like social, cloud and analytics. These four trends are together called SMAC, a term that describes the close association between social, mobile, analytics and cloud.

All four areas are bustling with startup innovation. Big IT companies are watching them closely. Mobile applications have been growing slowly over the last decade, but mobile commerce had not, till recently.

Phones were not good enough then. The networks were slow. Enterprises had legacy applications that were not easy to extend to a mobile. So you could, in theory, buy stuff on the mobile or do other financial transactions, but customers were often put away by the poor experience.

Yet, many companies underestimated the power of mobile commerce. In just two years, a number of enabling factors began to coalesce into a powerful wind that pushed customers to mobile commerce.

Phones can now compute as fast as desktop computers five years ago. 4G took off in developed markets. Clever startups made mobile application development easier. Customers who have started complex transactions on their mobile are often left frustrated, and companies began noticing that they end up not making purchases.

"During the internet days," says Sowri Santhanakrishnan, vice-president of mobility at Cognizant, "the enterprises and the consumer had pushed equally hard. With mobility, the consumer is pushing the most, and also saying 'I want my experience my own way." Companies did not understand the speed of change -- Facebook is a good example -- and struggled with the development of mobile applications. Phones had smaller real estate when compared to laptops.

There are a large number of these mobile devices, and each one needs to be treated differently. Mobile browsers were not good enough for complex transactions, as even HTML 5 is still not fully mature.

IBM says its products and services convert these problems into a revenue opportunity. Worklight helps customers build applications once and deploy everywhere.

The Rational Test Workbench helps companies test these mobile apps. The new Appscan for iOS -- it had launched Appscan for Android devices -- finds and fixes security issues in iOS applications early during development.

IBM Endpoint manager helps CIOs manage multiple devices that employees use these days. Tealeaf mobile solution analyses the mobile behaviour of customers and converts them into revenue opportunities. And so on, with more products and services. It is an impressive array to match for competition, but other IT companies are building their own strategies to penetrate this market.

IBM's closest competitor in this regard is SAP. This German firm is an early mover, and considered a leader in mobile application platforms by Gartner early last year.

IBM was then considered a niche player. SAP has made a few big acquisitions in this space. This includes database and mobile applications platform company Sybase, the mobile applications developer Syclo. SAP has set aside $155 million to invest in startups, and is on the lookout for buying other startups too. "We have integrated all our mobile technologies in the last six months," says S Rajeswara Rao, vice-president of mobility platform, SAP Labs India, "and so have an excellent ecosystem with powerful offerings in mobile, analytics, cloud and big data to help businesses run better." Other than SAP, IBM is competing with service-providers like Accenture, Infosys and Cognizant, the mobile platform company Kony Solutions, and a large number of startups.

Cognizant and Infosys have their own products for mobile application development. Cognizant's middleware TruMobi, for example, collates data from many sources in the company, strips them to the essentials, and sends them to mobile applications.

Kony Solutions is a serious player in mobile development and management platforms. Startups like Kurogo and Marmalade have their own niches. India has its own share of startups too, including with some uniquely Indian ideas.

The Chennai-based mobile platform company Uniphore Software Systems is one of the country's most-watched startups. Unlike other areas of IT, the Indian mobile business market is likely to evolve like in other countries.

"There is usually a time lag of about three years before some of our products begin to be used widely in India," says Naveen Gupta, vice-president of IBM's websphere business. "But we do not expect this lag in our mobile business." Users of mobile technology, particularly the banks, have some unique challenges to overcome. "Our big challenge is to cater to the technologically-illiterate as well as the ambitious user," says Aniruddha Paul, head of IT Change at ING Vysya.

(c) 2013 Bennett, Coleman & Company Limited

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