Cloud-Mobile Mega Trends Point to Need for Rapid, Radical Applications Transformation, Says HP

Transcript of a BriefingsDirect podcast on how consumer-driven platform variety and advancing cloud services are requiring enterprises to transform and rationalize their applications portfolios.

Listen to the podcast. Find it on iTunes/iPod. Download the transcript. Sponsor: HP.

Dana Gardner: Hi, this is Dana Gardner, Principal Analyst at Interarbor Solutions, and you’re listening to BriefingsDirect.

Today, we present a sponsored podcast discussion on the rapid and massive shifts confronting enterprises as they adopt more mobile devices and broaden their uses of cloud services.

In many ways, the mobile device explosion and the cloud computing ramp-up reinforce and support each other. Cloud services make mobile devices -- like smartphone and tablets -- more productive, while making users better connected to enterprise resources and work processes. On the other hand, mobile devices -- with their ubiquitous, non-stop wireless access -- make cloud-delivered applications, data, and services more relevant and more instantly available anywhere.

By leverging cloud and mobile, applications can be supported by a common, strategic, architectural, and converged-infrastructure approach. Furthermore, by making cloud-delivered applications and data context-aware, delivering enterprise applications to any device securely can then be done at a reduced cost (when compared to conventional applications infrastructure models). It therefore makes little sense to have unique stacks beneath each application for each application or device type.

So how do enterprises adjust to these mobile-cloud, dynamic-duo requirements in the strategic and a proactive way? How can they leverage and extend their current applications or identify which ones to fold and retire?

It’s clear that radical, not incremental, adjustment is in order to make sure that the cloud-mobile era is a gained opportunity and not a fatal or devastating misfire for IT operators -- and business strategists alike.

We're now joined by a guest from HP to explore the promises and perils of adjusting to the cloud-mobile shift. I'm here with Paul Evans, Global Lead for Application Transformation with HP Enterprise Business. Welcome back to BriefingsDirect, Paul. [Disclosure: HP is a sponsor of BriefingsDirect podcasts.]

Paul Evans: Hello, Dana. Good to be here.

Gardner: As I've mentioned, we have a lot of active trends unfolding, and we’ve talked about some of the shifts going on. But it seems that this combination of the move to mobile-device adoption and cloud computing is in some ways an enormous opportunity. Yet it’s also making people befuddled. They’re not sure how to tackle these both at the same time.

Radical transformation

Evans: I don't use these words lightly. We have to go through a radical transformation now in terms of our applications. There are these new technologies, part of the megatrends that are affecting organizations. These megatrends encompass things like evolving business models, a changing workforce, and the introduction of new technology.

And all of those are pressured onto an organization today. People are trying to figure out what’s the best route; which one should I ignore, which one should I exploit, and what should I be doing?

In the technological world, we have the world of cloud, and we have the world of mobile. We cannot ignore them. People can’t abdicate and say, "I'm not going to go do it." It's not going to be that way.

At the same time, the CIOs and senior stakeholders are looking outward and asking what are these new technologies, what could they do for me, how could they improve customer service, and what will my competition do?

They also look also over their shoulder and say, "I spend 70 percent of my IT budget keeping the applications I have today working. I probably don’t have enough budget or resource to do both. So the question is, which one of these should I spend more of my time on?"

The answer is that you really can’t afford not to spend time on either. So it's a balancing act between how I encompass the new and exploit it, and at the same time, what do I need to do with my existing applications.

Although we see the world of cloud and mobile as very new-age, very sexy, and all the rest of it, at the end of the day, people have to sit down and deal with what the environments they have right now. They may not be so exciting. They may not be so new-age, but at the end of the day, they make products, count money, and run the organization as it is today. They are the legacy applications.

Gardner: It also seems that they need to find ways to do this holistically. To go at it piecemeal almost subverts the total benefit, particularly if you look at it from a cost-benefit analysis perspective. Have you found in working with large enterprises, as I know you do, that those that attack this strategically or with a master plan, have an advantage?

Evans: Absolutely. It always pleases me when I sit down with a customer who says, "We have to take stock. We have to make a plan. We're not going to do this one day at a time or a week at a time. We have to appreciate how we are going to exploit cloud.

What applications that we have in the back-end server environments are we going to bring forward to the cloud to service a mobile environment? What we are going to do about the use of mobile within our organization and what we are going to do about serving our customers better through mobile devices and the technologies that go with them?"

Some big traps

It always pleases me when people want to make a plan. I may not be the most strategic person sometimes, but I appreciate it in this instance. There are some really big traps that people can fall into here doing something on the fly and then, in six months time, regretting they ever went down that route. Andy Grove, the former head of Intel said that this is a major inflection point.

This year people are predicting that if you count the amount of smart phones and tablets that will be shipped, i.e. bought, that it will be greater than the number of desktop, laptop, and network PCs. So we're tending now toward an inflection point in the marketplace that says more people will interact using mobile devices than they will static devices.

That trend isn’t just a blip for 2011. That continues as we accelerate, as people just get more comfortable with using that technology, as functionality improves, and security and manageability come under control.

We're at that point now. That’s why we use this term radical transformation, because for the people that really want to exploit this, they're making their plans, they're drawing up their action lists of what they have to do, both at the front end with the mobile and cloud environment, but also with their legacy environment.

Gardner: This is really a departure. In the past we've seen trends and rapid changes in IT, but I don’t think we have seen something that’s happened quite as wide spreading and globally. We're seeing this simultaneously in advanced economies across multiples verticals. It's as if even the organizations or regions of the world that may have been catching up in some other ways are leap-frogging and therefore adopting mobile devices even more rapidly.

This isn’t like, "I'll bring in some additional servers and move toward an n-tier architecture, bring in some applications, have coexistence and migrate them out to a branch office over a two- or three-year ramp up process." This is something that’s happening rapidly, more rapidly than we thought, and perhaps more pervasively globally than we thought.

They want to get things delivered. They want decisions made. More and more of the population has grown up with the ability to do things instantly.

Evans: The term that people are using is the consumerization of IT. I'm not quite sure what that actually means. To me, it’s driven by impatience and that’s not a negative thing. Impatience is not regional, and therefore, no matter where you are in the world, people want it now. They want to order things. They want to get things delivered. They want decisions made. More and more of the population has grown up with the ability to do things instantly.

Their impatience is forcing people to do things right now. Therefore, there's the expectation level of I expect, when I click on a device, I should get a response in an amount of time that may be immeasurable. If you wait a second or two, then people say, it’s running slow. You don't have to think really far back, that if you ordered something on the telephone, let’s say, then the normal period was that you will get it within 28 days. We accepted that. That's gone out of the window, gone.

That puts pressure on enterprises to deliver it, and the consumer is not acting alone. The consumer is saying, "I want you to send me a book. I want to download music. I want to order a holiday. I want to get a confirmation of a bank statement, or whatever it maybe, and I expect it right now."

Therefore, the systems that are serving up that information are the back-end systems. These are not new systems. These are the old systems. So, it’s this radical transformation. It’s dealing with the fact that we have to adjust those back-end systems to deliver up information to a wide plethora of different platform types, whether it will be smart phones, tablets, traditional notebook PCs, or desktop PCs.

This is going to be pervasive. This is the way we're going to do things for the foreseeable future. Therefore, if we don’t get it right now, we stand a risk of making decisions about platform types or architectures, or whatever it may be, that within six months, we’re going to say that it wasn’t such a good idea.

Never been here before

I meet so many customers now that are saying, "We’ve never been here before. We’ve never been with this volume of devices. We’ve never been through the fact that over half of our workforce now brings their own device with them into the office."

They're sending out policy documents that say, "you shall not do this," and it's totally ignored. The changing workforce has a totally different level of expectation as it were, of what's possible, just in terms of the amount of transactions that are performed over the net or 20,000 applications downloads in a minute.

These are transactional rates in volumes that we've never seen before. Despite a lot of our previous experience, you just can’t leave it and say, "It worked five years ago. It’s going to work for the next five years." That's what our customers are dealing with today.

Gardner: This isn’t just happening with applications delivered through an employee local area network (LAN), we’re talking about business-to-business (B2B) applications and data being served up, consumers increasingly being part of the revenue mix when applications are delivered through their mobile devices. It’s increasingly important for the organization to be delivering applications across different types of users, different parts of the globe, different types of device interfaces.

So it gets back to this common notion of a singular comprehensive infrastructure. We have mobile and shifting requirements and we’re also seeing the need for efficiency on how applications are served up.

One of the questions we get all the time is what percentage of my applications or products should I be moving to the cloud?

Paul, what are you seeing in terms of how organizations are putting the numbers together, and say, "What’s hybrid cloud or a hybrid cloud model bringing to the table in terms of how to solve this?"

Evans: There are two critical questions have to get answered. One is the organizations that are going to move applications to a cloud environment are not going to move all of them. One of the questions we get all the time is, What percentage of my applications or products should I be moving to the cloud? And of course the answer is ... It’s not a percentage thing. It’s the type of application.

It’s still formative times, but in HP’s view, clearly applications that probably are not embodying intellectual property would be a type of application that's well served moving into the cloud. And, any form of application including servicing, providing a service across a wide population of users as well, especially those who are obviously in a mobile environment; applications that are productivity-centric.

You really want to drive the cost down as low as possible for any of these productivity applications. There's no sense in running on aging infrastructure where the costs are high. You really want to be getting the cost down, because if it’s a productivity application, it doesn’t differentiate you. And if it doesn’t differentiate you, then why would you spend anything more than the minimal cost?

So put those productivity applications onto the lowest cost environment where you couldn't provision an infrastructure that has this elasticity that the cloud environment provides.

No clear line of sight

That's the first thing, organizations are focusing on and saying, "How are we going to start to bring forward some of our applications that we’ve had buried in the data center?" And some at extremely high-cost. We find working with people that there still are some applications where there may not be a clear line of sight into just how much that application is costing and the infrastructure it’s running on.

You might say we are spring-cleaning a little as we go into organizations and help them understand what are the top candidates for applications to move to the cloud. What we're doing is unearthing the portfolio of application through the work we do, and saying to the CIO saying, "Did you realize that you have this number of applications and that you're spending this amount on those?" Of course, the usual answer is, "No, I didn’t know I had that many." Usually, what we uncover is there is about twice as many as people thought.

They do consume a lot of cash. So, in this spring-cleaning. We're moving applications from back-end environment to the cloud. Then we have an opportunity to rationalize the portfolio. Rationalizing the portfolio had two big impacts. One, it takes cost out, which means that you can consider that as saved money or money that can reinvested in the mobile world.

But also you're taking out complexity. Every organization, I think, would agree at the moment that their environments are too complicated, and by virtue of being to complicated, it makes it difficult to change them, and people are looking for agility and flexibility.

So first things first. When we're talking to organizations, what we're trying to understand is what are the candidates that can move to the cloud, and that’s a big hot topic. A lot of our users and customers say, "We sort of get our head around cloud. That’s okay. We can see it’s a different paradigm. It has a different cost model. It helps me with provisioning. Life’s good."

The technical challenge is to support this environment agnostically and say, 'We don’t care what you're using.'

So they can get their head around that, and as you can tell by just reading the press and listening to what goes on in the world, you would say people are on the move with cloud.

On the other hand, when they are looking from the outside in with mobile, there is less of a precedent there. The sharp customers that we are working with are saying, "We don’t want to fall into traps. We're going to build an environment that suits one type of mobile environment and we are going to be able to test it and manage it." They know that they don’t have that order of control. The days when it was, "You shall use this device, and that device we know how to work," have gone.

If you think back to mainframe days, people had to use a 3270 device. That was it. It was defined by IBM. That’s the way you're going to do it. And if you didn’t have one, then you didn’t get to participate. The world is now totally the other way around.

The technical challenge is to support this environment agnostically and say, "We don’t care what you're using." What we can do is understand how to manage and provide the right level of security to that device, whatever that device may be. Maybe you come inside the network and that’s going to be a high performance network these days, because of the whole issue of impatience.

As I said, the volume and the variety of platforms are unprecedented. Even though we had the PC world, the PC as the client was a single entity. It had some interesting characteristics initially, but there was one brand. What we're dealing with now is many different ways. Therefore, we have to understand this from an agnostic standpoint, so that the consumer can continue to use the device of their choice and can get the services they require from this new cloud and server environment.

Virtuous adoption

Gardner: I've been speaking to some organizations recently where, as they’ve moved to cloud to support these new requirements, they’ve also recognized that there is virtuous adoption benefit in terms of efficiency. As they solve some of these issues around wide area network (WAN), around converged infrastructure supporting applications, transforming applications from their older platforms into new modern ones. And they're also gaining efficiencies through virtualization, and higher utilization rates.

They're able to do disaster recovery more quickly. They're able to reduce the total amount of data, because they're consolidating and they're removing redundancies of data. They're able to remove redundancies of application instances. They were able to license at the data center levels, and so on.

Suddenly, they say, "We're doing more. We're doing it differently, but we're actually doing things at a far more efficient level, and therefore, our costs over time are coming down, particularly if you focus on the operational level." So is there is a daunting challenge to moving to cloud in order to support many different things, including mobile, but in doing so, are you setting yourself up for longer-term efficiency?

Evans: The sharp customers and the sharp organizations out there have realized that already. Over the last 30 or 40 years in computing it's been totally organic. Unfortunately, we as vendors keep bringing out new things. While someone is trying to work with the old, we bring out something new, and they say, "How on the earth are we meant to develop an architecture and understand how to get the best out of this?"

What's happening now is that by virtue of the tidal wave, computing is going to be pervasive. It’s not going to be just the realms with data center and the few selected people that used to get access. Everybody is going to have this. Then it’s not only everybody, but it’s also these 13 trillion devices that are going to be connected to the internet, that don’t have people attached to them at all.

As people look at things like cloud, they're beginning to realize the applications that they can class as productivity.

They are devices that are monitoring things, whether it’s energy usage or whatever and then pumping that data into the Internet. As organizations begin to realize that the world is going to change, their view is going to be "We need architecture."

By virtue of developing an architecture, people are beginning to realize, as they begin to take stock of where they have been spending their money, that they have in the past and may have an opportunity to drive more efficiency and effectiveness into that organization, whilst at the same time delivering innovation.

So I think this inflection point can have some really good signs about it. As people look at things like cloud, they're beginning to realize the applications that they can class as productivity.

We ask them where they run certain productivity applications And everyone would say HR. Invariably we get the answer that it runs on a mainframe. And we ask why they run the HR system on a mainframe? Well, because it’s important. Of course it’s important and it’s vital, but it isn’t differential. It doesn’t give you some competitive advantage in the marketplace. It’s definitely absolutely necessary as a core part of your business. Just provide that service, but it’s not core in the sense that it gives you differentiation.

So you're right. It’s forcing decisions on people now, because the people that appreciate that this radical transformation is something that they can’t stop and they should exploit, rather than trying to ignore. People are actually seeing that there are significant efficiencies to be gained from deploying these new technologies.

Radical nature

Gardner: Let’s revisit the radical nature of this response that organizations need to have. In order to appreciate how rapidly and radically they need to shift, they need to appreciate how their requirements and the demands and their expectation are shifting, and a very good example is the travel industry, because the vertical is clearly needing to respond.

All of us or many of us travel, some more frequently than others. And, we have a sense of how fast things are changing just in a matter of months. We've seen going to the gate at an airport become a different experience with different expectations. People are using mobile devices and not even going near paper anymore, recognizing that a scan device works just fine.

It’s amazing to me how consumers have adopted this very rapidly. They see something that works better and they go to it. It then becomes incumbent upon the airline businesses to support that.

So let’s look at an example of how things are shifting and let’s visit the vertical industry of travel. What would you see happening there that is a harbinger of what others might expect in other businesses?

Evans: What’s interesting is that there are always industry "skews" of technology. We have a tool in HP called the Business Value Framework. What that tries to do is interpret where the business wants to go.

If you can serve people better, if you can give them better information, then there is highly likely that they are going to come back as a repeat customer.

Ignore the technologies for a moment. Where are the line-of-business people wanting to drive their business going forward? If you're in a business where it's relatively difficult to differentiate yourselves, where it’s more commoditized -- and you could argue the airline industry is relatively commoditized -- then what people are going to look for is how we're going to have that small differentiation that makes us better than the rest of the world.

When you look at this business value framework and you look at things like services and transportation, what comes through very loudly is customer service and customer satisfaction is key. If you can serve people better, if you can give them better information, then there is highly likely that they are going to come back as a repeat customer.

You don't want to spend a truckload of money dragging people to your airline and then displeasing them, so they go to somewhere else, because that's makes the whole initial effort worthless.

What people are looking for is obviously loyal and devoted customers who come back and back and back, and that all comes down to deliver customer satisfaction. One of the customers we've been working with, Delta Air Lines, has really put that at the forefront. They can provide very rich, very high quality information, so that people know what's going on.

Range of devices

Working with Delta, they've been providing to a range of mobile devices, like smart phones, tablets, etc., but also to traditional desktop environment, rich information, not only when you're waiting for the plane, but also when you're on the plane by virtue of seat-back videos screens so that people get a continuous feed.

If you're flying from A to B to C, you're going to change planes in the middle. If you're going to miss your connection, you usually sit on the plane, knowing you're going to miss your connection, and then what are you going to do? That means you get off the plane, queue with 500 other people, and then you eventually get another plane -- eventually -- all the time trying to figure out how you can tell your family why you are late and rest of it.

Delta is trying to provide an environment that says while you're on one of your airplane, it's already working out the next connection and it will give you that information on the plane. It will give the e-boarding card. It will send you the vouchers that would allow you to get some refreshment, all to your mobile device, so that all of that stress and angst that you’ve had traditionally gets taken out. In a commodity industry that's the sort of thing you have to do to be different from the rest.

We see that in a number of industries. We see people today delivering and developing mobile applications, particularly in the commodity world, to deliver up a much higher level of customer service and satisfaction.

That's the thing that means we're going to go back again and spend our money with them again, as opposed to a competitor, because in this world of internet it's so easy to switch. Brand loyalty, customer loyalty, may not be things of the past, but something you have to work incredibly hard to achieve. That's what people are utilizing these new technologies for predominantly.

What they value are things like structured workshops, to have an open debate between technology and business.

Gardner: So to recognize that convenience is the killer application, the ability to serve up the data in real-time to any device, to allow the participants in a business process to interact with that process, to make changes, basically what we would call change management, for a consumer is simply convenience.

This requires an awful lot to happen in the back end. What is HP bringing to the table to help organizations like Delta or others that don't have a precedent to fall back on that are finding themselves faced with fairly complex challenges and looking for that strategic view? How is HP adjusting to the market itself in order to accommodate these kinds of clients?

Evans: What we are definitely doing in some respects is using the experience we built up in dealing with people's legacy environments and understanding what they value. What they value are things like structured workshops, to have an open debate between technology and business that says who is leading, who is following, where are we going, and what do we need?

A lot of the things we do in terms of those initial services set the scene, so that we just don't leap in and decide, "Well, we're going to support X device. We're going to provide this app on it." And then, six months later, we're struggling with how we're going to deploy that app over multiple platforms and how we're going to use new technologies like HTML5 etc. to give us that agnostic approach?

It’s this convergence between the mobile world and the traditional world, because we believe that’s the big thing. We can talk about the sexy front end, the smart phones, the pad environment -- and it's great to talk about those -- but at the end of the day, those devices only really get to do what they are paid to do, when they connect to rich and meaningful information at the back end. So for this convergence we sit with users, sit with the CIO, and understand what is it that they're going to be converging in terms of information from the back end and the utilization of the mobile device on the front end.

Put into context

Then, how do we connect those together? How do we sit down and say, "What sort of speed of transaction, what volume of information are we talking about here," and obviously understanding that. That information has to be put into context now for the device of the front-end. If you're delivering this to a smart phone, it has to be represented in a totally different way than if you were going to deliver it to a desktop PC or, in the middle, a pad.

So the point being is we've got to be aware of those. We’ve got to be aware of the user’s context and understand what we can and cannot deliver to them. But I think behind the scenes, and of course, this is where the consumer says, "I don’t really care," but the whole management and security that you put in place, and HP has spent a lot of time, and a lot of effort, and a lot of money in acquisitions and development of technologies that allow people to manage and also provide a secure environment, to those devices that are at the front-end.

Gardner: Of course, this does require the complete view of network storage, hardware, software, integration, hybrid cloud development. It’s really astonishing to me how this really impacts just about everything when it comes to IT. This is not something that’s a bolt-on type of affair.

Evans: Absolutely not. As I said earlier, those are sort of the quick wins that people are saying that you can just bolt-on. "Oh well, we used to send out data to desktop PCs and then laptops or whatever. This is just an extension." This is not. This is different. This is a paradigm shift. This is an inflection point. Whatever managerial business term you want to use, this is a big deal in their mind.

There are serious challenges. I wouldn’t for a second say this is a piece of cake. Just ring us up, and 30 days later you get a solution. It is not like that. This is a big deal. There are serious challenges and therefore they need serious people to fix them. We're into understanding how you get this end-to-end view, because if you only look at a piece of the puzzle, you aren’t going to build what is absolutely necessary.

There are serious challenges. I wouldn’t for a second say this is a piece of cake. Just ring us up, and 30 days later you get a solution. It is not like that.

Gardner: Before we sign off Paul, are there some salient resources to which you could point people to acquaint themselves more with what we've been discussing, particularly on how to solve some of these issues?

Evans: On hp.com -- if you type in hp.com/go/applicationtransformation, there are a plethora of different links there for people to read up on things, watch videos, whatever. We're also developing a digital repository for predominantly video material. We find that our customers are very clear in telling us that they like watching short, sharp pieces of materials that are being videoed, so they can get the message quickly and get offline.

Maybe the days of reading a 20 page white paper are gone, which I am not sure is true, but definitely our clients told us very clearly that they like watching videos. So we're developing a whole series of video-based material, whether it's on application rationalization, application modernization, mobility in the enterprise world, or infrastructure.

The intention here is not to hear from HP, because we will do what we're paid to do, which is trying to convince you we have some very smart people in technologies and products, but also hear from industry experts, hear from our customers about what they're doing, how they're doing it, and the sort of benefits.

So if you stay in touch through hp.com/go/applicationtransformation, we'll always point you to materials that in some instances are not being delivered by HP, but just hear from our customers and hear from industry analysts about really what is now possible.

Gardner: Well, great. You’ve been listening to a sponsored podcast discussion on the rapid and massive shifts confronting enterprises as they adopt more mobile devices and also broaden their uses of cloud services. We've heard ways of the cloud mobile era is a potential opportunity, but also has some pitfalls in terms of how to approach this and that are comprehensive and strategic overview, seems to be working for many of the early adopters that are succeeding.

So I want to thank our guest, Paul Evans, Global Lead for Application Transformation at HP Enterprise Business. Thanks, Paul.

Evans: Thanks, Dana.

Gardner: This is Dana Gardner, Principal Analyst at Interarbor Solutions. Thanks again for listening, and come back next time.

Listen to the podcast. Find it on iTunes/iPod. Download the transcript. Sponsor: HP.

Transcript of a BriefingsDirect podcast on how consumer-driven platform variety and advancing cloud services are requiring enterprises to transform and rationalize their applications portfolios. Copyright Interarbor Solutions, LLC, 2005-2011. All rights reserved.

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App Stores-They're Not Just for Consumers Any More, as More Enterprises Adopt the Model to Support Mobile Applications

Transcript of a sponsored podcast discussion on the emerging concept of enterprise app stores based on the popular consumer model.

Listen to the podcast. Find it on iTunes/iPod. Download the transcript. Sponsor: Partnerpedia.

Dana Gardner: Hi, this is Dana Gardner, Principal Analyst at Interarbor Solutions, and you’re listening to BriefingsDirect.

Today, we present a sponsored podcast discussion on the impact that mobile devices and applications are having on enterprises. We'll specifically examine what steps businesses can take to manage mobile applications and develop their own versions of enterprise app stores.

The skyrocketing popularity of mobile devices like smartphones and tablets has, on one hand, energized users, but on the other hand, it has caused IT and business leaders to scramble to support these new clients productively and safely.

We'll explore how enterprise app stores are part of the equation for better mobile management and overall mobility-enabled work success.

We'll start by examining some of the driving trends around enterprise mobility with a principal analyst from Forrester Research. Then we'll hear from Partnerpedia on how enterprise app stores can be added to the usual mix of IT applications delivery and management strategies. [Disclosure: Partnerpedia is a sponsor of BriefingsDirect podcasts.]

We're really at this rare moment in time for the technology sector, whether you're talking about vendors, end-users, or CIOs who are trying to manage all this.

Please join me now in welcoming our panel, John McCarthy, Vice President and Principal Analyst at Forrester Research. Welcome, John.

John McCarthy: Thanks, Dana. How are you today?

Gardner: I'm great. We are also here with Sam Liu, Vice President of Marketing at Partnerpedia. Welcome back, Sam.

Sam Liu: Hey, Dana. How are you doing?

Gardner: I'm doing great. John, let’s start with you. It seems that a day doesn’t go by when we don't see more data pointing to a sea change in how applications, communications, and information are being delivered to workers. I think this has a lot to do with the way these workers now want to gain access to these assets.

From your perspective, John, how profound is the shift that we're in? Is this iterative or are we in a real sea change, a real sort of shift in the landscape, a tectonic plate type of shift?

Rare moment in time

McCarthy: It’s definitely the latter. We're really at this rare moment in time for the technology sector, whether you're talking about vendors, end-users, or CIOs who are trying to manage all this. It’s not just mobile. It’s not just cloud. Software as a service (SaaS), smart computing, machine to machine, analytics, social, all these things are spinning up together to create an accelerating array of change in the marketplace.

Gardner: You mentioned cloud and SaaS. It seems to me that the mobility issue is almost accelerated in a virtuous cycle. That is to say, the more mobility, the more reliance on cloud, the richer and safer it is. The more confidence people have in cloud, the more they can do with their mobility. Is that the case? It’s an adoption vector of some sort?

McCarthy: You pointed it out very articulately. These things are feeding off of each other. As soon as I start talking about deploying mobile, and increasingly, it’s not just deploying mobile to my employees, but deploying mobile to my partners and customers, whether it’s B2B or B2C, I am talking about a much broader network problem.

So the network architectures of the cloud solutions are becoming almost synonymous with mobile solutions. So the two innovation cycles are intersecting and feeding off of each other.

Gardner: I'm sure we could spend an hour just talking about the network and the WAN optimization issues, but let’s focus today on the applications.

We've seen changes in the past around interfaces, application architectures, whether it was client-server, web, or moving toward services orientation. What is it now that organizations need to do to get their very necessary mission-critical information out to these mobile devices? Is this as easy or more difficult? How does it compare to the past?

McCarthy: The analogy that I draw, when I have discussions with clients now, is that it’s like being the captain of the Titanic, if you're the CIO. Everybody is focusing on those things that they see above the waterline -- how am I going to design these applications and how am I going to deliver them? There's this whole debate of whether I need to go native, hybrid, or browser-based.

But below the waterline is a huge broader part of the iceberg -- how am I going to manage these applications, how do I need to rethink my security architecture, is SOA really going to be enough for the level of integration that I need? The skill sets that I need as an IT shop are very different in this world?

We are working from a current research point of view that mobile and all these other things that are being bundled up with it that we just talked about are going to drive probably an order of magnitude bigger shift in IT and the CIO’s organization than the PC did 20 years ago.

It’s the PC shift on steroids that we are going to be looking at over the next three to five years as mobile completely enables companies to rethink their business processes, and that drives rethinking of their technology architectures, management, and skill sets underneath that.

The app store

Gardner: Sam Liu, we've seen an example, at least in the consumer space, of one way to start going at this applications delivery problem in order to get the full benefit and productivity of mobile devices and cloud delivery. Of course I'm talking about the app store. We've seen them in a handful of organizations and probably most prominently at Apple.

From your perspective, why does the app store model on the consumer side, what we've seen already, have applicability to the enterprise?

Liu: Dana, it’s setting the bar in terms of the user experience in the enterprise, the fact that people who are both consumers and employees of companies are essentially buying the devices, bringing them into the workplace, and forcing the issue onto IT.

You have the mobile professionals and power users of the company taking what they've experienced in the consumer role and requesting a similar experience in the enterprise. The challenge for IT is that this opens up a whole new can of worms for them in terms of policies, procedures, security, and control.

If you look back maybe 15, even 10 years ago, a mobile device was somewhat of a luxury, used by a few people in the company for primarily email. Most of the time, it was a BlackBerry device. We've gone from a singular device and a singular application environment to this perfect storm of a combination of a multitude of devices, platforms, and apps, popularized by the consumer world. That's a big challenge for IT.

Gardner: John, we've seen Apple take it to the desktop as well. They have an app store for their more modern desktop operating environment. Is this the solution, part of the solution? How confident are you that the app store is going to be an integral part of what the enterprise does vis-à-vis mobility?

McCarthy: Clearly the notion of an app store is an interface to this technology. The rate of change and the complexity of this environment basically says that I need more of a self-service module. I can’t go out there and hand-provision these applications like I did in the PC world.

The rate of change and the complexity of this environment basically says that I need more of a self-service module.

Because people have become so accustomed to this app store model, as Sam just pointed out, from a consumer adoption point of view, that user interface paradigm is going to continue over. I think what’s going to happen is that, behind the scenes, the enterprise app store functionality, from a management point of view, will be much richer over time, and that's where the divergence is going to be.

But as an interface and a way to get people the information and applications, there's one school of thought that says these app stores will replace the old intranet as the paradigm for not only getting apps, but actually subscribing to information.

Using technologies like Flipboard where you subscribe to the travel policy and you ultimately get the most updated version of that. That it’s going to evolve pretty dramatically from where we are today. It’s going to be the user interface paradigm to all this management capability that IT will use, but also these additional capabilities that the end-user -- whether that's customer, employee, or partner -- will access.

Mobile internet paradigm

Liu: I agree with John on the point about the app store becoming the sort of mobile intranet paradigm. Today, I'm not seeing any corporate intranet that work even halfway decent on a mobile device. So if you extend the concept of an app to content, information, anything that is relevant in a corporation, the app store paradigm is a very nice interface and a very effective delivery model for a mobile intranet, for that matter.

McCarthy: The other thing Sam is that, if you think about these apps, they're called apps, because they are not full-fledged applications. They're much simpler and task-oriented, so there's going to be more of them to manage. The app intensity of the organization is going to grow geometrically, as we start to unbundle these big complex systems like SAP and Office and provide them in more digestible and more segmented experiences. It’s no longer a one-size-fits-all world. The homogeneity of these applications and the PC as the end-user device is blowing apart as we speak.

Liu: Definitely agree.

Gardner: I think this aligns also very well with the methodological approach of services orientation. So with an SOA environment, for example, you would look for a registry or repository to list the apps and services that would be available, and those could either be ordered up by someone crafting a business process or directly by the end users.

Furthermore, to your point, John, about more granularity, we're seeing services and components that can be crafted into business processes, rather than those large hunking and brittle supported applications around enterprise resource planning (ERP) or some other big business activity. So we have a number of different levels in which app stores make sense.

Let’s move on now to how you get there. Is there an apps model or an app store model that we can look to? Let me start with you, Sam. You've had some experience here. What is it that people need to do? Should they build, buy, partner? How are you seeing it manifest in the market?

They're not going to be able to stop it, and so they're trying to figure out the right approach to dealing with all this multitude of devices and applications.

Liu: You're going to see a range of approaches. We've been talking to about a dozen or so enterprise IT organizations. The majority of them are in the early stages of trying to figure this out. They see the momentum coming. They're not going to be able to stop it, and so they're trying to figure out the right approach to dealing with all this multitude of devices and applications.

In most cases, they seem to be prompted by the influx of tablets and smartphones, but many of them are thinking beyond that. They're actually planning ahead. They're thinking about devices in general. It could be a mobile device or it could be even a desktop or a stationary endpoint. So they're looking beyond the immediate issues.

Our advice to them is, look, figure out your near term and long-term objectives, and then scope a pilot accordingly. Start with a clear definition of what you're trying to accomplish from a business standpoint, the objectives and the metrics, and then go about it that way. Identify the most pressing needs in terms of the users, apps, and devices and define your first project around that, so you can get a handle around what’s feasible and what’s not.

One of the challenges is that clearly the technology has changed a lot, but also just the lifecycle of hardware and software. It used to be anywhere between three to five years that IT could depend on. Now, you're looking at one year for changes of the devices, platforms, and new apps. That rate of change is also a big challenge for them.

Gardner: John, it seems that on the consumer side of app stores the goal is to move a lot of apps, charge for them, and make a lot of money. It seems to me that on the enterprise side, this is really more a function of control, of exerting policy, learning what apps are being used, by whom and how.

How do you see the difference between an app store in the consumer space that we're familiar with and how the requirements around that should perhaps be different in the enterprise?

Working in parallel

McCarthy: To go back to the question you asked Sam -- what’s happening and what’s been the catalyst for these different level of discussions -- there are two things happening in parallel.

People are moving out of the renegade pilot phase, and as Sam laid out, trying to take an architected approach. How do we holistically look at what our strategy is around mobile? Not just developing the apps, but how are we going to manage the apps? How are we going to manage the fact that different constituents, both internal and external, need different amounts of functionality and different amounts of security is driving it?

The other thing that we're seeing happening is, companies are now saying, "Oh my God, how am I going to manage the lifecycle of these apps? It’s relatively cheap and easy to build them, but how do I keep up with the endless releases that are going on and the operating system wars on these devices?" Apple and Google are doing four operating system releases a year that you need to manage to make sure your apps still runs.

Then there is the whole point, particularly in the customer-facing space, of how do I update my app so that it stays competitive, and we can really use that system of engagement with our customers to build that ongoing communication, which every company wants to get with their customers?

What we are seeing is that people are starting to look at how to manage the lifecycle of these apps and then, in parallel to that, I need to figure out what are my policies going to be and then how do I enforce or instantiate those policies That's where people are turning to these enterprise app stores from the vendors.

Then there is the whole point, particularly in the customer-facing space, of how do I update my app so that it stays competitive.

It's less of a selling and more of a management prerogative and design point. Then, of course, there is the complexity of the device environment.

Gardner: To that point Sam, do you see the app stores and enterprises also allowing for automated updates to go out? It really helps in the configuration, security, and patching types of issues, as well as upgrading the app over time. Also, to John’s point about policy enforcement, perhaps you could address what you're seeing in terms of updates, security, and management for the enterprise version of app stores?

Liu: The enterprise app store, is all about the app, how to procure and vet the app, so to ensure security and integrity, as well as distribute it to users, and controlling which users can have access to which apps. Also, it's enforcing policies, such as mandatory installs and updates of versions. Those are overall key elements of enterprise app store.

That said, it's not the end-all be-all. Enterprise app lifecycle management is much more than that. It's another issues, from tools to the actual hardware device controls, but certainly when it comes to apps and managing apps on mobile devices, mobile users, the enterprise app store is a big component of that.

Gardner: I wonder if there are some economic lessons here. It may be early on, but I'm wondering whether there is way to better manage application licenses, to be able to charge back on who is using apps, and when we have that policy and we have that data usage, apply a better economic model, so IT can be more transparent in terms of costs and benefits.

Sam, do you have any instances where folks have done this, and are there any monetary or business metrics of success that we can look to that say "We like app stores, because they're convenient, but can they help the bottom line as well?"

Other features

Liu: Some enterprise app stores don’t go beyond a basic app distribution and tracking, but in others you'll find features such as license management. Not all apps will be developed in-house. Some will actually even be purchased from third parties.

In a mobile world, you can expect to see more and more of that, only because, if nothing else, most IT organizations don’t have the system and the resources in-house for mobile devices and apps, so those tend to look outside to third parties for their solutions.

So in that situation, license management is an important part of enterprise app stores, so that IT can actually control just who has what license. If their job changes, we can bring it back and reallocate it to another user. Otherwise, you lose that cost that you paid for the app. Things like that should be built into enterprise app store.

You can also do bulk licensing. Most recently, you saw Apple’s program around bulk purchasing for businesses. Similarly, enterprise app stores will have some mechanism, when it's applicable, where companies can make bulk purchases and manage a pool of licenses across entire employee or contractor base.

Gardner: John, a similar question to you, do you see an economic benefit to this as well as a convenience and productivity benefit?

They have to go out to a third-party universe, because the value isn’t going to come from managing these things.

McCarthy: Initially it's going to be, "I need to manage these things." It's going to be knowing what's out there and making it easy for people to get at these things.

Sam made the point that this is much more of an ecosystem play. This notion where I am going to be developing everything myself isn’t going to work. There's going to be a lot of these third-party apps that the company, either on their own or through their services provider vets and says, "Here are all these other productivity apps that you can take advantage of. We have made sure that they work with our core business apps that we've developed."

But that focusing of what are limited IT resources is part of what's driving the app store phenomenon. IT doesn’t have time to build this themselves. They have to go out to a third-party universe, because the value isn’t going to come from managing these things. The value is going to come from these new customer or employee apps that allow us to rethink our business processes. We need to manage that complexity or we're going to have huge liabilities and huge risk and compliance issues.

Gardner: So Sam, it sounds as if the enterprise app store could also have a benefiting role when it comes to a hybrid model. Apps might originate with third parties, clouds, or SaaS providers. They might be developed in-house or even a combination thereof, and yet the user, the employee, would be able to access them in a singular fashion through a common interface and with a common policy and management. So is that the vision over time do you think with these app stores?

Liu: Absolutely. It's even a vision now. It shouldn’t matter, especially to the employee or the user, where the apps come from or who built it. It's all about the experience.

Also, in some ways it shouldn’t matter what device they're coming in from, whether it's a smartphone, an iPad, laptop, or desktop. There should be a similar rich user experience that’s appropriate for that particular form factor. So you abstract these hows and whats from a user standpoint. It becomes a more user-friendly and more productive environment for the user.

Gardner: We will have to begin closing out, but let's get a quick look to the future. John, any thoughts about either other trends or influences that will be encouraging organizations to examine and consider the app store model for their own application lifecycle management?

Reinventing the process

McCarthy: I think we are going to see more and more of these apps driving the reinvention of business processes. The reliance on these apps is only going to explode over the next three to five years. So we need a way, as we have talked about, where it's easy to find those apps, but also it's easy to manage those apps.

It's serving both sides, serving the needs of the businessperson or the customer, but also serving the requirements of the organization to allow us to harness this, but minimize the cost of managing these devices, making sure that they are secure, that we are not doing stuff with consumer data that’s going to get us into trouble. This is part of the whole rethinking of management and security in a world where it's much more mobile and much more outside the firewall.

Gardner: Same question to you, Sam, about the future. I wonder whether enterprises will be creating app stores for their employees, but could also start creating apps that they could sell in terms of limited access to certain data or certain functionality. In a sense they could create new revenue, new business models, that would reach mass market. Any thoughts about the future for how businesses use app stores, not just internally, but as a business channel?

Liu: Actually we've run into a few enterprises already thinking in that mode. Initially when we talk to IT, they're thinking about the internal issues, especially about controlling management policies, but they're also being asked to build systems that are customer-facing, and in some cases systems that deliver and sell products to customers. So, where it applies, such as software and apps, they're looking at how to use the same paradigm for delivery of app services and apps to end customers.

So it's potentially a new channel and a new revenue model for companies, not just simply a cost issue of trying to manage and control.

This is part of the whole rethinking of management and security in a world where it's much more mobile and much more outside the firewall.

McCarthy: And there are all of those businesses that are going to emerge where people talk about data exhausts. We know what people are doing. The app store becomes a way for people to tap into that and you can start to monetize that.

Gardner: And it strikes me that there shouldn’t be any reason that the same infrastructure that supports an internal app store wouldn’t also support an external one.

Liu: No, it's very similar.

Gardner: I'm afraid we are about out of time, Sam, is there a place folks can go for more information? I understand you have a white paper available. Where would people go to get more information on this enterprise app store and the management of mobility as a result?

Liu: We have a white paper that’s freely available as a download on our website, www.partnerpedia.com.

Gardner: And John, any research reports or notes that are available on this subject from Forrester?

McCarthy: There are a number of reports that we've done outlining kind of the future of mobile management. People can come to forrester.com and search the site and they'll find the stuff that myself and a number of colleagues have written relative to this topic.

Gardner: You've been listening to a sponsored podcast discussion on how enterprise app stores are part of the equation for better mobile management and related mobile work success. I want to thank our guests. We've been here with John McCarthy, Vice President and Principal Analyst at Forrester Research. Thanks so much, John.

McCarthy: Thanks very much, Dana.

Gardner: We've also been here with Sam Liu, Vice President of Marketing at Partnerpedia. Thank you, Sam.

Liu: Thanks, Dana, and thanks, John.

Gardner: This is Dana Gardner, Principal Analyst at Interarbor Solutions. Thanks for listening and come back next time.

For a free white papers on enterprise app stores and mobile management, go to www.forrester.com or www.partnerpedia.com.

Listen to the podcast. Find it on iTunes/iPod. Download the transcript. Sponsor: Partnerpedia.

Transcript of a sponsored podcast discussion on the emerging concept of enterprise app stores based on the popular consumer model. Copyright Interarbor Solutions, LLC, 2005-2011. All rights reserved.

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Enterprise App Store Trends Point to Need for Better Applications Marketplace for ISVs, Service Providers, Mobile Business Ecosystems

Transcript of a sponsored BriefingsDirect podcast on the development of enterprise app stores and application marketplaces for ISVs to extend and modernize the applications delivery model to better serve employees, customers, and partners.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Request an app marketplace demo. Sponsor: Partnerpedia.

Dana Gardner: Hi, this is Dana Gardner, Principal Analyst at Interarbor Solutions, and you're listening to BriefingsDirect.

Today, we present a sponsored podcast discussion on the fast moving trends supporting the escalating demand for enterprise app stores. As enterprises and most business users have rapidly adopted smartphones and made them mission critical to their work and lives, tablets are fast on their heels as a similar major disruptor.

RIM, Apple’s iOS, and Google Android devices are rapidly changing the way the world does business ... and does software. Riding along on the mobile device wave is the complimentary App Store model pioneered by Apple. The App Store is rapidly gaining admiring adopters from many quarters, thanks to its promise of reducing cost of distribution and of updates, and also of creating whole new revenue streams and even deeper user relationships.

Those seeking to make application store benefits their own -- and fast, before someone else does -- come from a diverse lot. They include vendors, service providers, and communication service providers. Interestingly, though, it’s the users that have shown the way to adoption by demonstrating a comfort, a willingness, and an affinity for a self-selection process for downloadable mobile (and increasingly enterprise) applications and services.

The users are really quite happy with paying for what they have on the spot, as long as that process is quick, seamless, and convenient. So the onus is now on a variety of business service providers and enterprises to come up with some answers for app stores of their own and to serve their employees, customers, and partner ecosystems in new ways.

This can't be done haphazardly. The new app stores also must stand up to the rigors of business-to-business (B2B) commerce requirements, not just consumer-driven games.

So to learn more about how the enterprise app store market will shape up, I'm here with a panel to delve into the market and opportunity for enterprise app stores, and to find out how they could be created quickly and efficiently to strike, as it were, while the app store iron is hot.

Please join me now in welcoming our guests. We're here with Michele Pelino, a Principal Analyst at Forrester Research. Welcome, Michele.

Michele Pelino: Hi, how are you?

Gardner: I'm great. We are also here with Mark Sochan, the CEO of Partnerpedia. Hi, Mark.

Mark Sochan: Hi, Dana.

Gardner: And we're here also with Sam Liu, Vice President of Marketing at Partnerpedia. Hi there, Sam.

Sam Liu: How are you doing, Dana?

Gardner: I'm great. Michele, let's go to you first. This whole applications marketplace concept is something we hadn’t even thought of perhaps two or three years ago, and it's moving very rapidly. The trend is also happening across categories.

Usually we can sort of slice and dice these things, but we are looking at consumer, business, enterprise, and service providers seeking app stores. Maybe you could sort of paint a picture for what's going on with business applications, now that we have seen the app store model really pick up and become attractive to consumers.

Importance of mobility

Pelino: In order to provide some context around the momentum that we're seeing on the app store side of the world, it’s really important to take a step back and recognize how important mobility has become to enterprises overall, as they are interacting with their employees and their customers and their partners and providers as well.

We do surveys at Forrester of enterprises in both North America and Europe to better understand those priorities and how mobility fits into overall technology initiatives. We find that three of the top priorities that are being focused on by many enterprises are related to mobility.

That includes deploying new devices to their employees. It includes supporting more types of applications for not just the employees that are working outside of the office and the road warriors that we all think about when we are thinking about mobile workers, but also expanding applications for workers who are actually in the office.

So this broadening of mobility includes many types of workers and applications that address not just the traditional email/calendaring applications, which are widely deployed by most companies, but is also pushing those applications down into line of business worker types of applications, which are tied to particular types of employees in an organization.

They're applications that may be designed for the sales team, customer service, support, or marketing. They also might be applications that are tied to the needs of particular vertical industry’s logistics or supply chain management or enterprise asset management types of applications.

Many firms are broadening the types of applications that they're deploying to their customers, partners, and suppliers, as well as to their employees.

All of these applications are where we're seeing the momentum today. Ultimately, many firms are broadening the types of applications that they're deploying to their customers, partners, and suppliers, as well as to their employees, and this momentum is continuing.

The other thing that’s driving some of this momentum is that individuals, not just employees, are going out and buying lots of different smartphone devices and mobile devices. You touched on that in your earlier comments around tablets, slates, and different types of smartphones that are out there. So, this momentum isn’t just happening within the corporation. It’s actually happening outside of that, and it's what we would call the consumerization of IT.

This means that many individuals, consumers, are driving requirements into the corporation and into the IT organization to get new types of applications on their devices, whether those devices are personally owned or ones that the corporation has as well.

This consumerization trend is also happening to drive these requirements into the organization and to really generate more momentum around applications in general as well as smartphone devices, tablets, and other types of mobile devices.

Gardner: So we have the consumers, the users, very much aligned with this trend. They seem to have adapted to it rather easily. We've also seen an ecosystem of independent software vendors (ISVs) involved, where they see opportunities to create direct relationships or marketplaces and get new revenue. We've even seen some companies like Zynga and some of the other gaming corporations, taking off based on this apps model.

What's the last leg on the stool? It seems to me that their will be new types of app store providers. Michele, for those organizations thinking of doing this, what do they need to consider? What's important from a B2B perspective of doing an app store?

A lot of momentum

Pelino: One of the things to think about, when you are doing an app store, is to recognize that there's a lot of momentum around app stores in general and that came from the initial foray that we had seen from the device manufacturers like Apple and RIM. All the different device manufacturers have application stores tied initially to a consumer-oriented perspective.

The momentum around those app stores has driven corporations to start thinking about what they can do to more effectively and efficiently support their requirements around applications.

The thing with corporations is that IT organizations still want to control which version of the applications are in there and what types of apps an employee might have access to in a corporate environment, as opposed to what they might be doing in their personal world. Security is always a key issue here.

All of these things are really driving the need for these application stores -- but at an enterprise level. More and more applications are not just coming from what the IT organization wants to put out there, but also line-of-business workers within the organization are driving more and more application requirements.

By implementing these application stores, I, as an individual employee with a particular role will have access to certain applications. Another employee may have access to other applications that are tied to their role in the organization. And you could broaden that concept out to interacting with partners, suppliers, and customers as well.

The IT group is getting pushed by the end users and organizations that have become very comfortable with how they can search, browse, try, download, and purchase applications.

That’s where this momentum for application stores is coming from. It's not just coming from the IT organization, but it’s coming from line of business workers who want to have applications out there for their customers, employees, and partners.

Gardner: Mark Sochan at Partnerpedia, there's a need now for an IT department or an enterprise organization to take advantage of this trend, but to do it in a way that’s amenable to them, that suits their requirements. Is this a big opportunity for IT to do something differently but perhaps even do something better than the way they have distributed software in the past?

Sochan: Absolutely, Dana. Adding to some of the comments that Michele made about IT consumerization, there is no doubt that the IT group is getting pushed by the end users and organizations that have become very comfortable with how they can search, browse, try, download, and purchase applications. As a result, that has raised the expectations of how those same workers would like to be able browse, search, and download applications that could help them in their business world and with their productivity.

But, there are some pretty big differences between the consumer world of buying a 99-cent Angry Birds game versus downloading business applications. So some of the things that IT groups are having to think about and sort out are security and data governance, and how data that is specific to the device can be managed and, if need be, removed.

There are also issues about how the IT group can enable worker productivity and increase the satisfaction of the user base. [Request an app marketplace demo.]

Savings and efficiencies

Finally, there's a need to try and find cost savings and efficiencies. If you had everyone just buying individual applications, then you wouldn’t have the benefit of bulk license purchasing or the ability to purchase through normal corporate buying processes that result in larger scales of economy.

Gardner: Michele, back to you. I know this is still early and this is a very fast-moving and dynamic marketplace, but do we have any sense of how big this is going to be? Not necessarily numbers, but do you think that most enterprises are going to want to adopt this sort of a model?

Also, this all reminds me of a couple of years ago, when we talked in services oriented architecture (SOA) terms about registry and repository, making a list items of services and/or applications, and then users could pick and choose and start beginning to make processes from them. Is this something that you at Forrester expect to be pervasive or is this going to be on the fringe?

Pelino: This is the beginning of a pretty key momentum driver in this area. What we're seeing now is that some of these key drivers, are coming together for large, medium, small enterprises who must figure out how to expand their applications and capabilities. What we're seeing now is that some of these key drivers are coming together for large, medium, small enterprises who must figure out how to expand their applications and capabilities.

Also, as Mark said, you still have to have some control over this. You have to deal with corporate requirements around purchasing and all of the requirements internally as well. All of those factors are coming together.

About 30 percent of enterprises are using application stores do deploy some of their applications at some level.

Our surveys say that about 30 percent of enterprises -- that’s medium, large, as well as small enterprises -- are using app stores do deploy some of their applications at some level. It’s not that they're doing everything that way today. That’s the early stage of this, because this is an evolutionary path. It started on the consumer side and now it’s going into the enterprise.

As I think about what our survey data would say going into 2011, I have a feeling that, that percentage will jump pretty dramatically. More enterprises are dealing with that pain-point of the complexity of getting these applications out there, of having to have some control over which version, monitoring them, tracking what's going on with the apps, ensuring that everybody is getting the application that they should ... or not.

Those kinds of things are very important, certainly at a corporate level, and so this is driving a lot of that momentum as well, and security can't be lost in that picture either.

Gardner: Sam Liu at Partnerpedia, how do we help enterprises step into this? Is there a path? Is there some methodology, or track record involved? If I were an IT manager, I am thinking, okay, I have to build, I have to buy, or I have to partner -- or some combination to get an app store up and running.

If I have an app store that’s serving my employees, the chances are that I'm going to need to have one that’s going to be able to stand up to the rigors of delivering apps and services and business value out to my customer end-users as well.

How does an organization like an enterprise, a vendor, or a communication service provider start the process of thinking about architecting and providing an app store?

Early stages

Liu: We've talked to a number of different enterprises and various industries, and most of them are in the early stages of researching and trying to figure out what this means to them. They know that tablets are coming, but actually today’s problems have as much to do with just devices already in-house, such as smartphones.

What we're hearing in terms of platforms is that the top three platforms they're trying to figure out are iOS, Android, and the platform coming from RIM.

In that research phase, some of the issues that they're concerned about are more traditional IT policies and compliance issues. They understand the motivation from the user standpoint and the value of that, but they're really trying to understand the landscape in terms of those more traditional issues around IT control and compliance, such as security.

The other thing is that they're also more open to outsourced or cloud and software-as-a-service (SaaS)-based solutions, as opposed to something that may be completely managed in-house via traditional software. The issue there is that they want to make sure that it actually can connect to the very secure session in the corporate environment, and that by outsourcing they are not giving that up in terms of the security and control.

What we recommend is to start with a scoped project. Don’t try to solve all of your problems at once. Figure out what you need today and build up a roadmap for how you want to get there tomorrow. So you might want to start with the current devices, such as phones and focus on maybe internal applications or select third-party applications. Deploy a project from that and then figure out how you want to evolve that towards other devices and other platforms. [Request an app marketplace demo.].

They're looking for some blended model between complete end-user autonomy and some better corporate control.

Gardner: Mark Sochan, this isn't just about the technology of being able to serve up an application. This is also about billing, invoicing, the money trail, and then making that auditable. In certain industries, it’s a bit more of an integration issue.

How do you walk into an enterprise or a vendor and help them sort through, not just the delivery of these apps, but also the management of the charge-backs and/or processing of credit cards or other means of billing?

Sochan: At Partnerpedia we've been working with a number of the leading tablet vendors and some of the largest enterprise customers to understand what are the business problems and what are the priorities that need to be solved.

Overwhelmingly, what we're hearing is that most customers are not satisfied with just having an open marketplace that you might see from, say, the Google Apps Marketplace. They're looking for some blended model between complete end-user autonomy and some better corporate control. That’s the first piece of feedback we are hearing.

The second piece is that there is a need to have some sort of branding. Most enterprise companies want to have some branding, so that it’s very clear to their users that this is their marketplace, this is their store. And that store has a combination of third-party built applications, similar to what you might see if you went into an Apple App Store or into the Google Android marketplace.

Custom built

But, you also see applications that have been custom built specifically for that corporation. That is, bite-size pieces of applications and business process productivity that is specific to a person’s role in that organization. Plus, some higher-end applications are coming from some of their business partners.

Because there are a variety of different sources of these applications, there are different business models that need to be addressed. The one that may be most familiar to all of us would be the ones that are the similar kinds of applications that we might find in the Apple App Store or the productivity type things, whether it’s news and information or time management or calendaring.

Then, as we move to the custom-built applications or the in-house applications, it’s also important to be able to have a way to side-load those applications and make sure that those applications are available and discoverable by the people in the organization that they are relevant to.

There's a whole idea of personalization that goes far beyond what we've seen on the consumer side, where basically everyone is presented a very similar experience in the enterprise side.

It’s very important to personalize much further to a marketing executive, for example. That’s going to be a very different set of applications that have been pre-approved and that are relevant to that marketing executive, versus someone who is on the production floor.

There's a need to have a lot of control and flexibility for the corporation to either pre-purchase those licenses and to manage those licenses effectively.

Finally, depending on the type of application and the user, there's a need to have a lot of control and flexibility for the corporation to either pre-purchase those licenses and to manage those licenses effectively. Then, they can both purchase and manage the distribution of those license, and be able to reclaim them as employees leave the organization or devices are lost, as well as allowing, as appropriate flexibility for the end-users to actually make purchases directly based on their budget. [Request an app marketplace demo.]

Gardner: Michele Pelino with Forrester Research, I don’t know if this is a bit outside of your field, but it seems to me that that from an IT procurement perspective we have been talking about smartphones and tablets.

When you think about the app store model as a way to distribute and manage applications to all devices -- including PCs -- you can start to get better efficiencies over licensing. You can really meter who gets applications and how often they're used and use that to decide what apps to keep or what to throw out. You can also have a better means of updating and adding security patches in a way that’s automated and centralized, rather than going from point to point.

Do have any thoughts about the IT efficiency aspects of an app store model, if we take it beyond smartphones and tablets to the entire endpoints the users use?

Evolving over time

Pelino: That is how this could evolve over time. We've been starting on the mobile device side of the world -- smartphones and tablets, those types of devices. But, at a corporate level, there are other types of endpoints that you need to manage and deploy applications to, and you want the same kind of control. You also want to have a sense of how much you are spending.

Sam mentioned, as a service type of delivery model or a per user type of delivery model, you can use different kinds of models here to keep control of the cost and have efficiencies around cost that you might not have today, because there is lots of overlap happening.

There are benefits as well, when you're thinking about individual end users who might have devices that they use in certain situations. When they're at their desk, maybe they have their laptops or desktops there. So, ultimately, you could have the same environment to integrate what an individual end-user or an employee could get in terms of the apps that they're able to get and always have a consistent experience for that.

The other side of that is just having a recognition that at the IT level, as much as they would love to control this, there are lots of devices around the bend. So even in the mobile world the devices we see today are not the ones that are going to be here tomorrow and there is more and more, almost on a day-to-day basis, being announced and put out there for end-users, whether it be enterprises or consumers to use.

How do I keep that in line? This app-store model is certainly one way to do it. But, when you think about it at the IT organization level, it’s not just about mobility. They have to think about the endpoints across the organization and this could certainly be relevant in that case as well.

The ability to create a very rich catalog of information makes it much more compelling and gains a lot more commitment from your partners.

Gardner: Mark, we're hearing about the benefits for an internal app store where IT, for example, might get better software distribution benefits. I know that Partnerpedia has been working with a number of early adopters on storefronts and branding around app stores. Are you finding that there is a capability here that you can, in effect, create the same app store for internal distribution as well as external, where you would be taking apps and services out to a wider audience, be it B2B or business-to-consumer (B2C)? [Request an app marketplace demo.]

Sochan: Absolutely. If you look at the core essence of an app store, there is a repository or catalog of information that makes it very easy for a company’s customers be able to find, browse, and look for products and services, not only from the vendor, but also related products and services that are of value from that vendor's ecosystem.

It almost doesn’t matter what kind of company it is. Most companies have some extended ecosystem of value-added partners. The ability to create a very rich catalog of information that your customers can browse and search and look for related products and services makes it much more compelling and gains a lot more commitment from your partners.

Because you're now providing them with of a go-to-market benefit directly to the customers, and from the customer’s perspective, they see tremendous value in your company’s products and services, because they see the richness of the ecosystem around it.

At the heart of it is this catalog that can be highly personalized. You can imagine that if you're now able to personalize this for your customers, where your customers are coming into this marketplace and they are not just seeing a generic marketplace, they are actually seeing a marketplace that’s been personalized to them.

Marketplace knows

This means that the marketplace already knows which products your customers have purchased from you and therefore is making a pre-selection or presenting them with information that’s very specific and related to the footprint that, that customer already has of your products.

In some cases, in a more consumer-oriented world, you may want to actually go to a transaction and actually enable purchasing. But, our enterprise customers are telling us that, equally important, if not more important, in the first steps is to have a very sophisticated lead capture engine, so that you can capture that interest that your customer has expressed, and been browsing and expressed interest in a particular product.

Then, you can route that, as appropriate, into whatever customer relationship management (CRM) system is being used and more effectively follow up with that customer, either with your own direct sales force or with passing that lead to your partners for the appropriate follow up.

Gardner: This is interesting. App stores in the enterprise seem to be the gift that keeps giving. We have distribution benefits, but now we are looking at some marketing and business intelligence (BI) benefit, where we can segment and provide a different façade or set of applications and services to different constituencies, know who they are, create a relationship, gather metadata about their activities, and then better serve them with the next round.

Back to you, Michele. Is there a marketing and a BI benefit through the app store model that allows for an efficiency in gathering information and delivering products and services significantly better than some of the past models, where these have all been in sort of similar silos and it has been difficult to integrate and pull them together?

As you have all of your customers, partners, and suppliers accessing these application stores, as well as your employees, you can then target those individuals with appropriate information.

Pelino: You can imagine that now, with the capabilities that you have, you're going to be able to track and understand better what individuals are doing. Are they using certain applications? What they are doing? When they are doing it? As well as better understanding how you might be able to package and put together capabilities that might be more valuable to your customers in a manner that will be useful, in an individualized manner, not just basic bundles or combinations of services.

From the BI side of this, we've only started scraping the surface, because we are in the earlier stages. But as you have all of your customers, partners, and suppliers accessing these application stores, as well as your employees, you can then target those individuals with appropriate information. Not necessarily marketing all the time, but appropriate information, if it’s for employees and partners and suppliers, and for the customers, certainly marketing and promotional activities could be tied in here as well.

Gardner: It sounds very good in theory. Mark, tell us a little bit about some of the ways that this is actually being used now. I know you can’t always tell us the names of the folks you're working with, because you are an OEM supplier and they may still be in pilot in terms of their own app stores, but how are these ideas really coming into fruition? What’s really going on on the street? Some use cases for this enterprise app store concept?

Sochan: What’s happening on the street is that a number of tablet vendors are seeing that having a branded app store capability around their tablets is a critical checkbox item to creating a whole product that is valuable to the enterprise. That’s the first thing that we see happening through our direct relationships with our vendors and customers.

The second thing is that the enterprise customers and consumers of these tablets are looking and starting pilots right now, where they're setting up their own branded app store to make it easier for their internal users to be able to browse and find and demo'd applications and these pilots are starting now. [Request an app marketplace demo.]

Gardner: Do you have any metrics of success? Are we too soon into this? Have you got any users that have put some of this into practice and said, "We did blank and then we got blank in return. There was a percent increase in this or a decrease in that?" Do we have any metrics that demonstrate what the payoffs from doing this are?

Trove of data

Sochan: As Michele motioned, there is a really exciting rich trove of data and BI that you get, because now you can see what users are interested in. You see what they are browsing.

All of us are very familiar with the Amazon-like model, where you rate products and services. The exact same thing is now enabled in these branded app stores, where the users are in real time rating the number of stars for that application. More importantly, they are giving their comments about what they found useful and areas that they would like to see improvements, which creates this very exciting innovation cycle.

Where previously you had very complex monolithic applications that got delivered and had a couple of year cycle, now you're seeing bite-size pieces of innovation that gets immediate feedback from the end-users. The developer sees that feedback almost instantly and is able to immediately respond with either bug fixes or feature enhancements.

What’s really exciting to me is just how fast the innovation and that feedback loop happens that just spurs more innovation.

Gardner: Before we wrap up, maybe we could step out a little bit into the future and think about some of the implications for this.

It's bringing up the value of the information into making better business decisions, and that business intelligence I think should not be underestimated.

Michele, how far do you think this can go? We've talked about how it could come back and affect the PCs. I am thinking that it really could change the way businesses operate in terms of their revenue, relationships with their customers, central repository and means of managing both marketing and innovation and then distribution.

Pelino: If you think about the evolution of where this could head, you're starting with the central piece of the value proposition to many of these mobile devices and tablets, which is the application, and that’s absolutely critical.

You're going to be proving out the value of the applications in these app stores. But, benefits that can be achieved are efficiencies around cost. You've got benefits around having all this information about your customers, your partners, your suppliers, your employees, or anybody interfacing with these application stores -- depending on how you're implementing them -- that you can now use to leverage and broaden out your relationships with them at various levels.

This is absolutely critical. It's bringing up the value of the information into making better business decisions, and that business intelligence I think should not be underestimated. The other side of it is, when you think about the complexities that are facing the IT organization at a real tangible level, that’s not going to go away.

As we look to the future, the complexities around these devices, around the tablets, the slates, the smartphones, the other devices that are the more traditional devices and endpoints that companies have to manage and deal with, that complexity is going to continue.

Managing complexity

When you think about where this can head, recognizing that companies are going to be looking for more efficient ways to manage that complexity, these application stores are one way to do that, and they provide a pretty cost effective way potentially, because, as Sam mentioned earlier, some of these are dealt with as a service, per user basis, per use basis, and so there is efficiencies around this that you can’t underestimate either.

Gardner: You almost want to throw another acronym out there, which would be something like "business services as a service."

Pelino: That’s not a bad idea. But, as you think of the future, there are a lot of opportunities to really build this out and have a critical impact on the strategic initiatives of the organization. It may not be just a tactical thing that the IT organization is implementing. It’s a very strategic potential for an organization to implement these stores.

Gardner: Mark Sochan, are you talking at that executive level with some of your customers? First, maybe you ought to quickly summarize what it is that the Partnerpedia is delivering to the market and then follow on with are you selling this to IT people or to strategic thinkers who are really looking at this as a business strategy.

Sochan: The core of the Partnerpedia offering is a white label, cloud-based, branded app store, that allows very efficient discovery and delivery of applications. The internal benefits for the internal facing app store is the capability for IT members to be able to pre-purchase select applications that they want their users have available to them. And also providing the capability to brand that app store so that it follows the company’s logo and it has a very consistent corporate look and feel.

The internal benefits for the internal facing app store is the capability for IT members to be able to pre-purchase select applications that they want their users have available to them.

Then, giving a way for users to be able to very easily search, browse, and look for applications that are specific to their role in the organization.

Finally, the license management of that software, allowing the IT department to be able to track licenses that have been purchased and downloaded, as well as be able to reclaim those licenses as is appropriate, when an employee either no longer needs that license or has left the organization or has lost the device.

And looking more to the future, we are also working very closely with customers that are building a private branded marketplace. And I distinguish between an app store and a marketplace in that a marketplace is much broader than just applications. It can be hard goods, products, services, or offerings from partners and provides just a much richer way for customers to discover value-added offerings from a company. [Request an app marketplace demo.]

Gardner: Who are the folks who seem to be most interested in this? Is this something you're selling at multiple levels, or do you really have the ears yet of that business strategy?

Sochan: We're seeing it in a few different industries. Certainly high-tech is an area where this lends itself very well, because most companies are moving to a cloud services world and so they're looking for new and more innovative ways to combine and recombine multiple solution offerings to come up with more valuable offerings to their customers.

Driving opportunities

This is also driving opportunities for innovation and business models. how the customer pays for it. Having these bite-size pieces of innovation lends itself to new ideas and new business models in which there can be not only just actual new sources of revenue that can come out of this, because now it’s a channel to the market.

Gardner: Michele, are there any resources at Forrester that you could point people to, if they wanted to explore this a bit more? Are there some reports, some URLs, any place that you would suggest people go to at Forrester to learn more?

Pelino: As I was talking I was referencing a few points of data from various reports that might be relevant, and you can get to those links through the Forrester site.

There's one report that sets up the complexity that’s facing many organizations that I touched on very early on, called "Managing Mobile Complexity."

There's another report that’s coming out very soon around mobility in the cloud. We've been talking about these delivery mechanisms, cloud-based delivery mechanisms for applications and services, especially around mobile devices and applications and services.

Having these bite-size pieces of innovation lends itself to new ideas and new business models.

Gardner: Mark Sochan at Partnerpedia, are there some reports, resources, white papers, ways in which people can learn more about your approach to the market and this notion of the white label in the cloud app store as a service?

Sochan: We have some great white papers that people can access from our website at partnerpedia.com, that will give very useful insights into some of the best leading practices in this area.

Gardner: You've been listening to a sponsored BriefingsDirect podcast discussion on the fast moving trend supporting the escalating demand for enterprise app stores.

I'd like to thanks our guests, Michele Pelino, Principal Analyst at Forrester Research. Thanks, Michele.

Pelino: Thanks so much.

Gardner: And Mark Sochan, CEO at Partnerpedia. Thank you, Mark.

Sochan: My pleasure.

Gardner: And also Sam Liu, Vice President of Marketing at Partnerpedia. Thanks, Sam.

Liu: Thanks, Dana.

Gardner: This is Dana Gardner, Principal Analyst at Interarbor Solutions. Thanks again for listening and come back next time.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Request an app marketplace demo. Sponsor: Partnerpedia.

Transcript of a sponsored BriefingsDirect podcast on the development of enterprise app stores and application marketplaces for ISVs to extend and modernize the applications delivery model to better serve employees, customers, and partners. Copyright Interarbor Solutions, LLC, 2005-2011. All rights reserved.

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