ENTERPRISE MOBILE APPLICATIONS : Not Yet Upwardly Mobile

With 400 mn mobile phone subscribers, and the growth showing no signs of
plateauing, India is expectedly being touted as a mobile hotspot globally. What
has been driving growth for the last few years is the huge potential in rural
and semi-urban areas where the quality of infrastructure and services in fixed
line is not good. So today, the mobile is being seen as a tool to connect the
unconnected. Indian operators have done a commendable job of reaching out to the
remotest of areas in many parts of the country.

Today, mobile has become the only medium to reach out to a large part of
Indias population. For example, some estimates suggest that there are at least
30 mn mobile subscribers in India who do not have a bank account. Mobile could
be a great medium to get them into the banking system. Today, many state
governments are building applications that would make it possible for people in
the remotest areas to access common citizen services through their mobile
phones.

Today, no consumer business worth its name is ignoring the potential of
reaching out to customers through mobile applications, for customer service,
marketing and of late for transactions. By and large, that is what is driving
Indian enterprise mobile applications adoption in the initial phase of the
market rollout.

That is both good news and bad.The good is that when the adoption becomes
mainstream, it would suddenly see exponential growth. The bad news is that this
is also the reason why the transition from a hype cycle to an adoption cycle is
taking so much time. Today, the market size of enterprise mobile applications in
India is a very small fraction of the potential.

CyberMedia Research        DQ Estimates

Although a growth of 61% is by no means trivial, it is on a much smaller base and is expected to accelerate further over the coming few years

According to Dataquest estimates, the total market size of enterprise mobile
applications in India stood at Rs 560 crore in FY 09, up from Rs 347 crore in
FY 08a growth of 61%. While that growth figure looks quite impressive, it is
on a small base and we believe that will accelerate for the next few years.

It is important to explain what we have included in this. The market, the way
we have estimated, includes applications either sold as a product or developed
on a customized basis but does not include other softwares such as platforms and
middleware. It does not include services, unless they are built into the
application cost, as in case of a grounds-up development of an application from
scratch. And of course, it does not include applications or content which are
paid for by customers through operators; ie consumer applications such as caller
tunes, ringtones, pictures, and games.

There are two reasons why the enterprise mobile applications market has still
not reached a critical mass. First: the adoption is happening more on the
front-end, which typically requires a longer decision cycle as well as longer
implementation time. Secondly: most integrators in the enterprise space are
still trying to push traditional mobile applications which has worked in
developed markets, which are B2E or B2B applications, and are targeted at
enhancing productivity and efficiency, as part of their solution to the CIOs.

On the other hand, last year saw significant take-offs in customer facing
applications such as m-banking, which was launched by many large banks through
downloadable midlets, WAP sites as well as through SMS. Then there was
m-payments, where India is now being seen as an early adopter, as well as a lot
of other m-commerce applications.

In the banking sector, ICICI Bank, HDFC Bank, State Bank of India, and Union
Bank of India are the early adopters of GPRS based services while almost every
bank worth its name offers SMS based mobile banking services. The payment space,
still nascent, has already attracted multiple players such as Ngpay, Obopay,
Oxicash and mCheck. In travel, most players including Kingfisher, Jet Airways,
Indigo, Makemytrip, Yatra and IRCTC offer GPRS based mobile services while many
others offer SMS based services. Ngpay, which has created a mobile marketplace,
has attracted many partners who offer their products and services to customers
through it for m-commerce. These include companies as varied as PVR Cinemas to
Amar Chitrakatha, Landmark to Asian Skyshop.

Major players in the application space include Mobiquest, ValueFirst, Obopay,
Mospay, CanvasM, Mindtree, Spice Digital (earlier Cellebrum), Telenity, Netxcell,
among others.

The adoption in the intra-enterprise space is low but gaining momentum. We
are still at a stage where only a few sectors like retail and BFSI are using
mobility apps for conventional areas like sales force automation, transaction
management, etc. Field force automation and integration, mobile transaction
management, asset tracking and management, bill payments/receipts, ticketing,
Intranet applications such as executive MIS on mobile, are currently in vogue.
However other areas like CRM, remote data collection and management, queue
buster solutions, integrated handhold solutions with other technology solutions
like RFID, location-based services are also fast catching up.

Vertical-wise

Its a well known fact that the first and primary adopter of enterprise
mobile applications has been retail. The next rung is occupied by BFSI and
pharma, and they are closely followed by the transportation and logistics
department.

A new entrant on the mobility street has been the government. Governments
across India are busy mobilizing their operations and their workforces. The
sector has emerged as an enthusiastic consumer (of mobile enterprise apps), and
has niche requirements of developing its wireless capability, especially for
domains of security, reliability, and scalability of its operations. Another
area that the government is exploring is tracking and locational services.

Apart from these, there are a lot of sectors that hold huge potential for
effectively deploying enterprise mobility solutions. Some of these can
substantially contribute towards crafting the success story of enterprise
mobility. One of the most promising sectors is healthcare. From blood bank
tracking to bedside monitoring to real-time monitoring of surgeries, healthcare
is one area that holds tremendous scope for deployment of mobility solutions.
The other potential verticals are defense, aviation, energy utility, and
telecom.

The Challenges

While even sending bulk SMSes to the sales force was considered to be a
mobility sort of adoption (and a large number of our SMBs are still in that
stage) a couple of years back, we have now evolved to reach what the experts
call the email stage. A major chunk of enterprise mobile applications in India
right now is mobile email. So clearly, maturity is an issue, and on that front
at least, the growth rate speaks volumes about the potential that the Indian
market holds.

That apart, because market maturity will only come gradually, the biggest
challenge in the way of enterprise mobility applications is the security of data
being transferred. Most vendors concur that the first question their customers
put up is related to the security of data being transmitted. They want to
ascertain how reliable their mobility solution is.

However, experts insist that security vis-a-vis mobile applications, is no
longer an issue that cant be dealt with effectively. That is because most
developers are now taking care of security issues right from the stage of
inception.

The other big factor, that has been especially relevant to the Indian market
is the low RoI, that leaves little incentive for application developers. And
though a lot of players have mushroomed in the application development picture,
a lot of them are targeting the overseas market, rather than the Indian one. The
Indian market is more lucrative for VAS application developers, given the
consumer base.

Apart from that, integration is another issue. Although most mobile
applications are a sub-set or even an extension of the business applications,
their integration with the overall IT infrastructure remains a challenge for
most enterprises, especially for mid-sized ones. And with unified communications
being the buzzword across the industry, the convergence between voice, video,
and data points has become more crucial than ever. Thus, one of the biggest
ailments seems to be patching-up of the pieces. Accommodation of an application
in the existing infrastructure has always been a yardstick for success in India.
But enterprise mobile apps, though displaying an integration drive, are yet to
reach that stage of seamless integration.

Unless that happens, it is difficult to expect that intra-enterprise
applications would really take-off.

Mehak Chawla

mehakc@cybermedia.co.in