Enterprise Communications Research 2013

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1 Frost & Sullivan Enterprise Communications Research 2013 Analysis of the Australian Mobile Device Management (MDM) Market 2013

2 Disclaimer Frost & Sullivan takes no responsibility for any incorrect information supplied to us by service providers or users. Quantitative market information is based primarily on interviews and therefore is subject to fluctuation. Frost & Sullivan reports are limited publications containing valuable market information provided to a select group of customers in response to orders. Our customers acknowledge when ordering that Frost & Sullivan reports are for our customers internal use and not for general publication or disclosure to third parties. No part of this report may be given, lent, resold, or disclosed to non-customers without written permission. Furthermore, no part may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the permission of the publisher. For information regarding permission, write to: Frost & Sullivan Suite 1, Level 9, 189 Kent St Sydney NSW 2000 Australia Certification We hereby certify that the views expressed in this research service accurately reflect our views based on primary and secondary research with industry participants, industry experts, end users, regulatory organizations, the financial and investment community, and other related sources. In addition to the above, our robust in-house forecast & benchmarking models along with the Frost & Sullivan Decision Support Databases have been instrumental in the completion and publishing of this report. We also certify that no part of our analyst compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this service. Frost & Sullivan Australian MDM Market, 2013 Copyright Frost & Sullivan 2

3 Table of Contents 1. Executive Summary The Australian MDM Market Overview of MDM Solutions Australian MDM Market - Highlights Competitive Analysis Overview of key Players in the MDM Market Australian MDM Market Competitive Landscape Key Channel Partners in the Australian MDM Market Highlights from End User Survey Survey Overview Enterprise Mobility Trends in Australian Organisations Adoption Trends for MDM Solutions Vendor and Service Provider Preferences for MDM Solutions About the Authors Frost & Sullivan Australian MDM Market, 2013 Copyright Frost & Sullivan 3

4 1. Executive Summary The Australian Mobile Device Management (MDM) market is at a nascent stage of growth, with awareness and understanding of the MDM solution beginning to grow. Until recently, organisations considered MDM solutions either as nice-to-have or unnecessary depending on their particular situation. However, as trends such as Bring-Your-Own-Device (BYOD) and employee driven IT gather momentum, organisations will increasingly look to minimise their asset management overheads and will allow employees to either bring or choose their own devices. Such trends will cause a significant increase in the number of employee owned devices within enterprises, thereby increasing the demand for MDM solutions. Apple ios and Google Android devices continue to make inroads into the Australian enterprise segment. With both Apple and Google licensing Microsoft's Exchange ActiveSync technology in the past (and integrating support for ActiveSync in ios and Android devices), it has become possible to deliver push synchronisation of , calendar, contacts and tasks between an Exchange server and ActiveSync-enabled clients on compatible smartphones. Apple and Google have also improved the security capabilities of their device platforms, which helps to protect data in transmission and data at rest (on-device data). A majority of MDM deployments are currently on-premise based, with organisations opting to retain maximum control over a new solution. As the market matures, the greater flexibility and scalability of cloud based models will drive demand and uptake. Most vendors already offer both on-premise and cloud based versions of their MDM solutions and are anticipating a shift towards cloud based deployments in the next 3 to 5 years. In 2012, AirWatch, MobileIron and Good Technology are the three major MDM vendors in the Australian market, together accounting for the majority of the market share. All three vendors have improved their brand awareness in the local market and also have local data centre capabilities to address data sovereignty concerns. A number of new players are also expected to enter the market over the next few years, increasing the level of competition. However, the established vendors have the advantage of brand recognition and an installed customer base. Such factors will serve as major competitive barriers against new players entering the market. AirWatch is the largest MDM vendor in the Australian market and holds a dominant position in MDM. As a result of its local data centre capabilities and established brand name, the company has secured a strong footprint across several major industry verticals, and has also been increasing its presence in the Government sector. AirWatch also has the most Frost & Sullivan Australian MDM Market, 2013 Copyright Frost & Sullivan 4

5 extensive channel partner network, which includes major telcos, systems integrators and specialised MDM channels. Strategic marketing and distribution relationships are important in the MDM market. A large percentage of the main industry participants are relatively small, venture capitalbacked firms that have adopted a channel strategy to achieve a better market penetration at lower operating costs. While a direct-to-enterprise strategy can be useful in an emerging market segment, partnerships with mobile operators, system integrators, and other technology vendors are the preferred go-to-market strategy for most leading MDM vendors. For example, both Telstra and Optus have partnered with MDM solution providers to offer MDM products to their customers to help them manage the proliferation of mobile devices. In addition, a number of specialised MDM channels are beginning to establish their presence in the Australian market. One key trend expected to greatly increase the involvement of MDM players and channel partners in MDM deployments is the uptake of corporate app stores. Large enterprises are particularly interested in delivering general-purpose as well as custom-built corporate applications to their workforce (for example, mobile sales force automation apps). While MDM providers may not be involved directly in application development, they can provide appropriate solutions to help customers distribute and manage corporate-specific (and corporate-approved) mobile applications for smartphones and tablets. Over the next few years, the uptake of corporate app stores among organisations in Australia is expected to increase significantly as employee-owned mobile devices become more widely adopted. Based on our survey of IT decision makers in Australia, BYOD is now a pervasive trend, with an increasing number of organisations recognising the benefits of MDM solutions: Over 60% of organisations in Australia allow employees to use their personal devices for work purposes (i.e. they support a BYOD policy). Within this group, about 25% of organisations provide full IT/helpdesk support for the employee owned devices. Only 20% of organisations oppose BYOD policies, while 16% of organisations indicate plans to introduce a BYOD policy in the future. Apple ios based devices (iphones and ipads) are supported by over 60% of organisations, followed by Windows Mobile and Android based devices. Going forward, although Apple devices are expected to be the preferred choice for employees, about 30% of organisations are expecting Google Android based devices to become the preferred products in the next 12 to 18 months. For 70% of organisations and Instant Messaging (IM) are the main applications accessed from mobile devices. As the most fundamental and Frost & Sullivan Australian MDM Market, 2013 Copyright Frost & Sullivan 5

6 pervasive applications within organisations, the ability to access and IM from any device greatly enhances the ability of employees to stay connected and to communicate with their colleagues. Voice based applications are as equally pervasive as within organisations, and voice is usually the platform upon which other unified communications (UC) applications are built. Voice based applications are therefore amongst the main applications used on mobile devices. Over 70% of organisations have experienced an increase in voice and video communications over mobile devices over the past year. Within this category, 22% of organisations have experienced a significant increase in the use of mobile devices for voice and video communications. With the number of employees bringing their personal devices for work increasing, there has been a corresponding increase in the amount of video and video communications. Going forward, mobile devices are expected to account for a major proportion of communications within organisations. Improved security and ease of management of mobile devices are among the main factors driving the adoption of MDM solutions. For over 70% of organisations the ability to have a centralised tool to manage security is an important reason for deploying MDM solutions. Over half of organisations also consider ease of management, including applying user access policies and software updates, to be a key reason for deploying MDM solutions. The majority of MDM solutions are currently deployed on-premise with over 70% of organisations using this approach. Less than a third of organisations are currently using cloud based or hosted versions of MDM solutions. As organisations recognise the potential of integrating mobile devices with their core communications and collaboration processes, enterprise mobility is becoming an integral part of the overall IT strategy. This creates a range of challenges for organisations. Over 40% of organisations give equal importance to security, implementing strong governance and building the ability to support a range of mobile devices and operating systems. While securing mobile devices against malware attacks and preventing data leakage are important considerations for organisations, the need to support a wider range of mobile operating systems is also becoming important. Frost & Sullivan Australian MDM Market, 2013 Copyright Frost & Sullivan 6

7 2. The Australian MDM Market 2.1 Overview of MDM Solutions Over the past few years organisations in Australia have been experiencing growing demand from employees to use their personal devices for work purposes. This has moved from just using their own devices for work-related voice calls and SMS s to using their own devices for data applications such as and IM. Employees are increasingly requiring the ability to connect to the corporate network from devices such as smartphones and tablets. Overall, employees are having a greater influence on the choice of device, and in some instances, are driving the decision making process of their IT departments. Such developments are known as Bring You Own Device (BYOD) and Choose You Own Device (CYOD). While initially BYOD and CYOD policies were limited to laptops or netbooks, they now include smartphones and tablets. Advances in mobile hardware and software are making smartphones and tablets capable of handling business applications. As a result, there has been significant growth in the number of mobile devices used within an organisation, forcing IT departments to adopt new practices to manage the multitude of devices. As use of employee-owned mobile devices become more widespread within organisations, IT departments are faced with three main challenges management of devices, user policies and ensuring security and compliance. These challenges have created opportunities for specialised vendors to develop solutions that provide a range of functions that accommodate any device, whilst also adhering to corporate policies on security and user access. These challenges have also created a market for specialised channel partners that can provide a range of services such as consulting, implementation, management and support. While the market is currently at an early stage of development, the growing role of mobile devices within organisations will drive demand and uptake over the next few years. A key enabling factor driving the growth of the MDM market will be the availability of cloud based solutions. The ability to avoid on-premise deployments will be an attractive option for many organisations, which will also benefit from the greater flexibility and scalability of cloud based solutions. Most MDM vendors now offer their solutions in both on-premise and cloud based versions to address the demands of a wider market. Frost & Sullivan Australian MDM Market, 2013 Copyright Frost & Sullivan 7

8 2.2 Australian MDM Market - Highlights The Australian MDM market is expected to experience very high growth rates in the forecast period, growing at a Compound Annual Growth Rate (CAGR) of 39.1% from 2013 to While the small current base of the MDM market is one reason for the high growth rate in the next three years, there is also increasing demand for MDM solutions as organisations accommodate the increasing number of mobile devices. As is the case with emerging markets, the initial very high growth rates will begin to stabilise to a more realistic range of around 35% by With mobile devices becoming increasingly integrated with organisations business processes, there is a huge base of target customers for MDM solutions across virtually all industry sectors. Traditionally conservative verticals such as Government and Healthcare are even beginning to adopt mobile devices to extend the reach of their communications and collaboration solutions. As a result, there is a huge potential for growth and uptake of MDM solutions in the Australian market, which will continue to drive growth in the market in the forecast period. Another major factor driving the growth of mobile devices within enterprises is the decline in large scale and long term contracts for laptops and desktops. As trends such as Bring-Your- Own-Device (BYOD) and employee driven IT gather momentum, organisations will increasingly look to minimise the traditional asset management overheads and allow employees to either bring or choose their own devices, instead of using a company purchased or leased device. This will cause a significant increase in the number of employee owned devices within enterprises, also increasing the demand for MDM solutions. A majority of MDM deployments are currently on-premise based, with organisations opting to retain maximum control over a new solution. As the market matures however, the greater flexibility and scalability of cloud based models will drive demand and uptake. Most vendors already offer both on-premise and cloud based versions of their MDM solutions and are anticipating a shift towards cloud based deployments in the next three to five years. Frost & Sullivan Australian MDM Market, 2013 Copyright Frost & Sullivan 8

9 3. Competitive Analysis Overview of key Players in the MDM Market 3.1 Australian MDM Market Competitive Landscape The Australian MDM market is at an early stage of development with a small number of vendors accounting for the majority of market share. AirWatch, MobileIron and Good Technology are the major three vendors in the Australian MDM market and accounted for the majority of market share in Within this group, AirWatch has gained a significant lead over its competitors and holds a dominant position in the market. Among the key reasons for AirWatch s position in the market is its strong channel partner network, its ability to cater to large scale deployments and its local data centre capabilities. Over the next few years, a number of additional players are expected to enter the market. MDM solutions are well suited for delivery over a cloud based model, which is lowering the barriers of entry and encouraging global players to enter the Australian market. However, as the demand for MDM solutions increases, most major players have recognised the importance of having a local data centre capability. Competition in the market is beginning to intensify as organisations increase their uptake of MDM solutions, thereby driving growth in the market. Additionally, a majority of organisations previously supported only BlackBerry devices for enterprise use. However, over the past few years, Apple ios and Google Android based devices have overtaken other mobile platforms to account for the vast majority of smartphones and tablets in use. Organisations are therefore under pressure from this rapidly growing number of ios and Android users to connect to and access the corporate network. Organisations that continue to enforce a BlackBerry only policy now run the risk of employees by-passing the IT department to store and access corporate applications. The availability of cloud based storage solutions such as DropBox and Google Drive has made it very easy for employees to save and share documents outside the organisation s control. A number of other Over-The-Top (OTT) applications such as Skype and WhatsApp are also enabling employees to by-pass internal networks to communicate with internal and external contacts. As a result, organisations are looking to keep employee communications and Frost & Sullivan Australian MDM Market, 2013 Copyright Frost & Sullivan 9

10 collaboration activities under their control by allowing greater flexibility of devices that can connect to the network. The chart below illustrates the positioning of the key MDM vendors in the Australian market. The horizontal axis represents the market penetration of MDM vendors, with a position on the right hand side indicating high market penetration. The vertical axis represents presence across major industry verticals, with a position towards the bottom of the axis indicating a limited focus or presence only in specific verticals. A position towards the top of the axis indicates a high level of presence across all major verticals. Note 1: Major verticals include Government, BFSI, Professional Services, Education, Healthcare, Mining & Resources, Retail and Utilities Note 2: The MDM vendors represented below is not an exhaustive list of players and only includes the key vendors in the Australian market Note 3: Although the MDM market is at an early stage of growth, market penetration (horizontal axis) is represented for the base year (2012) Figure 1 Australian MDM Market - Key Vendor Positioning, 2012 Frost & Sullivan Australian MDM Market, 2013 Copyright Frost & Sullivan 10

11 Summary The nascent stage of development of the MDM market in Australia has created opportunities for the early entrants to establish a strong market base. AirWatch, MobileIron and Good Technology have all managed to secure a strong foothold in the market and together account for the majority of market share. A number of new players are expected to enter the market over the next few years, increasing competition. However, the established vendors will have the advantage of greater brand recognition and a large installed customer base. These factors will serve as major competitive barriers against new players entering the market. AirWatch, MobileIron and Good Technology are the three major MDM vendors in the Australian market. All three vendors have improved their brand awareness and also have local data centre capabilities to address the data sovereignty concerns of customers. These vendors have secured a number of customers in the key sectors of Government, Banking, Financial Services and Insurance (BFSI) and Healthcare. These vendors continue to grow at high rates and have distanced themselves from the rest of the competition in terms of revenue. AirWatch is the largest MDM vendor in the Australian market and holds a dominant position. As a result of its local data centre capabilities and strong brand name, the company has secured a strong footprint across most major industry verticals and has also been increasing its presence in the Government segment. AirWatch also has the most extensive channel partner network, which includes major telcos, systems integrators and specialised MDM channels. MobileIron is the other major MDM vendor in the Australian market and is the biggest competitor to AirWatch. MobileIron has built its channel partner network to include telcos and systems integrators to better compete against AirWatch in terms of reach and deployment scale. It has been growing its presence across major verticals such as Government, BFSI and healthcare. AirWatch and MobileIron in particular have built strong channel partner networks and have the capability to cater to large scale and complex MDM deployments. Good Technology, however, continues to build its partner network and currently lacks a partnership with a major telco and systems integrator. This will be major challenge for future growth as its main competitors - AirWatch and MobileIron - further strengthen their local channel partner networks to gain a stronger position in the growing market. BlackBerry has been adversely impacted by the rise of Apple ios and Google Android based mobile devices both in the devices market overall and more specifically in the MDM Frost & Sullivan Australian MDM Market, 2013 Copyright Frost & Sullivan 11

12 segment. The huge popularity of ios and Android based devices in the consumer market has led to these becoming the preferred devices/operating systems for most employees in organisations with a BYOD policy. While BlackBerry holds a sizable presence in its traditionally strong verticals of Government and BFSI, many organisations in these segments are migrating to MDM solutions from other vendors. 3.2 Key Channel Partners in the Australian MDM Market A number of players are entering the MDM market, reselling MDM solutions and offering a range of related services such as consulting, maintenance and support. This includes major telcos such as Telstra and Optus, technology channel partners such as CSC and Unisys and an emerging category of specialised MDM channels that includes MSC Computing and UXC Connect. In this market segment, Telstra, MSC Mobility, Optus and UXC Connect have established a strong base while Dimension Data and CSC are relatively new entrants. Specialised players such as MSC Mobility, UXC Connect and MobiliseIT have built a strong reputation in the market for providing MDM related services. Major MDM vendors have also identified partnering with these players as a key aspect of their channel partner strategy. While major telcos and technology partners will have the advantage of bundling MDM services with carriage or as a part of a major IT deployment, the smaller specialised players will continue to be a major competitive threat. In addition, some of the specialised channel partners have registered very high growth rates in line with that of the major MDM vendors. Frost & Sullivan Australian MDM Market, 2013 Copyright Frost & Sullivan 12

13 4. Highlights from End User Survey 4.1 Survey Overview In April 2013, Frost & Sullivan surveyed 227 IT decision makers to understand market behaviour and views towards Mobile Device Management (MDM) solutions. Respondents were senior management level executives, IT managers and IT decision makers with control of or insight into the technology budget and strategy of their organisations. Respondents were drawn from users in nine industry verticals of Banking, Financial Services and Insurance (BFSI), Telecommunications, Education, Government, Professional Services, Energy & Utilities, Healthcare, Travel & Hospitality and Other (including Retail, Manufacturing and Mining). This section discusses the results from the survey and offers an analysis of key findings. Figure 2 Respondent Split by Designation Managing Director/CIO/CEO/Ot her C level executive 52% IT Manager 32% IT Executive/IT Decision maker 16% N=227 Figure 3 Respondent Split by Company Size 1 to 49 10% Over % 50 to % N=227 Frost & Sullivan Australian MDM Market, 2013 Copyright Frost & Sullivan 13

14 4.2 Enterprise Mobility Trends in Australian Organisations The proliferation of smartphones and tablets has given rise to trends such as Bring Your Own Device (BYOD) and Choose Your Own Device (CYOD). Organisations are no longer able to block employees using their personal devices for connecting to and accessing corporate applications. While employees initially used their mobile devices predominantly for accessing , advances in technology and the availability of cloud based applications have made the devices well suited for accessing a wider range of applications. As a result, employees are using their mobile devices for joining audio/video conferences, accessing collaboration applications and for accessing cloud based solutions. The availability of reliable 3G and 4G networks has also greatly enhanced the appeal of mobile devices for travelling and off-site based employees. Overall, a majority of organisations in Australia have now either adopted BYOD policies or are looking at implementing such policies in the near term. Figure 4 Bring-Your-Own-Device (BYOD) Policies among Organisations Source: Frost & Sullivan; Sample size = 227 Over 60% of organisations in Australia now support a BYOD policy and allow employees to use their personal devices for work. Within this group, 25% of organisations offer full IT/helpdesk support for employees, while the remaining 40% do not provide any support. Given the high Frost & Sullivan Australian MDM Market, 2013 Copyright Frost & Sullivan 14

15 levels of familiarity, most employees are comfortable with the initial configuration as well as basic troubleshooting processes. Only 20% of organisations in Australia are opposed to BYOD policies, while 16% of organisations are evaluating the policy and plan to introduce support in the future. 4.3 Adoption Trends for MDM Solutions Drivers for MDM Adoption Improved security is currently the main reason for deploying MDM solutions among organisations. Over 70% of organisations regard the availability of a centralised platform or tool to ensure implementation of security and user access controls as the main reason for using MDM solutions. The advent of mobile devices has also given rise to cloud based apps that offer a range of functions such as communication, document sharing and collaboration. With most mobile devices being capable of connecting to a carrier network (3G or 4G), employees can easily by-pass their organisation s network and security systems to store and share files over the public internet. This ease of by-passing the network, and the potential risks of data leakage and malware attack, are typically the main reasons organisations resist employee driven trends such as Bring-Your-Own-Device (BYOD). However, as organisations realised that resisting BYOD did not improve security and only increased the risks, they are beginning to focus on applications and tools to efficiently manage the multitude of mobile devices. The ability of an MDM solution to better control security and reduce risks will be the main driving factor for demand and uptake in the next few years. Beyond security, ease of management of various mobile devices and operating systems is becoming an equally important factor for organisations in evaluating MDM solutions. As the number of mobile devices increases, ease of management in terms of applying security, user access controls and software updates is becoming an important requirement. Over 50% of organisations consider ease of management to be a key factor when deploying an MDM solution. Close to 40% of organisations consider the cost benefits to be the main reason for deploying an MDM solution. MDM solutions can also offer a cost effective way of managing mobile assets by reducing demand for internal IT resources/staff. As the number of devices under management increases, configuring and managing individual devices will not be feasible. Having a centralised management platform will enable the IT department to save time when applying user access controls and software updates. Frost & Sullivan Australian MDM Market, 2013 Copyright Frost & Sullivan 15

16 Nearly 40% of organisations also mention the ability to meet legal requirements as the main reason for deploying MDM solutions. Many organisations, especially in the Government and BFSI sectors, are required to adopt a range of policies to ensure adherence to legal and compliance requirements. With mobile devices representing a new medium of accessing corporate data, most organisations are concerned about the impact of a security breach or leakage of information with respect to legal and compliance requirements. Frost & Sullivan Australian MDM Market, 2013 Copyright Frost & Sullivan 16

17 Figure 5 Main Reasons for Adopting MDM Solutions Improved security. Having a centralised management tool allows better security and privacy controls 71% Ease of management. The increasing number of devices made it difficult to manage function such as defining user access, applying updates, and policies 54% Cost benefits. A centralised management platform allows for a cost effective way to manage mobile devices 39% Legal requirements. Adherence to security, compliance and privacy policies is a requirement for our organisation 37% Other factors 2% 0% 10% 20% 30% 40% 50% 60% 70% 80% Source: Frost & Sullivan; Sample size = 227 Challenges for Adopting MDM Solutions Among the main challenges faced by organisations when deploying MDM solutions are the overall costs of ownership and maintenance overheads. Over 50% of organisations consider the total cost of licensing and on-going maintenance service to be one of their biggest concerns when deploying an MDM solution. Although the cost of licensing has declined in the last couple of years (on a per device per month basis), most organisations need additional services to keep the solution operating efficiently. Services such as managed services for on-premise based MDM solutions and on-going maintenance and support are often necessary to support the rapid expansion in mobile users. As enterprise mobility becomes a critical factor for driving greater employee engagement and productivity, organisations will be more favourable towards investing in MDM solutions. In addition, as the market matures, the combination of cloud based models and declining price points will make MDM solutions affordable to most organisations. Another aspect of the overall cost of ownership is having the necessary IT skills and resources in-house to manage the MDM platform. Although MDM solutions are comparatively less complex Frost & Sullivan Australian MDM Market, 2013 Copyright Frost & Sullivan 17

18 than traditional IT infrastructures, organisations are faced with the challenge of training or hiring staff with the necessary skill set. 48% of organisations cite the added layer of complexity to their IT overheads as one of the main challenges faced when deploying MDM solutions. The other main challenge faced by organisations relates to the lack of understanding associated with any technology. Over 40% of organisations mention a lack of clear understanding of the role of an MDM solution beyond device management. Organisations also find it challenging to develop robust governance and user access policies to ensure security. Such factors are particularly prominent in regulated sectors such as BFSI and Government. As the MDM market matures, there will be opportunities for a number of players in the ecosystem to offer services that enable organisations develop an end to end mobility strategy. Figure 6 Main Challenges when Deploying MDM Solutions Cost. Management solutions are too expensive to purchase and run 55% IT overheads. Adds additional layer of complexity for the IT team 48% Lack of understanding. There is a lack of clarity among vendors as to how the solution can fit in or help an organisation's requirements 41% Lack of demand or requirement. The number of mobile devices manageable by the IT team and therefore no need for such a solution 19% Other concerns 4% 0% 10% 20% 30% 40% 50% 60% Source: Frost & Sullivan; Sample size = 227 Frost & Sullivan Australian MDM Market, 2013 Copyright Frost & Sullivan 18

19 4.4 Vendor and Service Provider Preferences for MDM Solutions On-premise based deployments are currently the preferred method for MDM deployments, with 73% of organisations opting to keep storage and management of the application in-house. Although the awareness of cloud based models has improved significantly, most organisations remain concerned about where the data is stored or hosted by the cloud service provider. Additionally, many government departments and banking and financial institutions are required to adopt technologies only from vendors/service providers with local data centre capabilities. As a result, the major MDM vendors in Australia have built local data centre capabilities to cater to these sectors. However, given the nascent stage of the MDM market, most organisations prefer to adopt an on-premise model to retain maximum control over the solution. Over the next few years, as market understanding improves, a greater number of organisations are expected to adopt cloud based versions of MDM solutions. Among the main benefits of adopting a cloud based MDM model are reduced maintenance overheads and cost savings. Figure 7 Preferred Deployment Model for MDM Solutions Source: Frost & Sullivan; Sample size = 155 The preference for on-premise deployment model is much stronger among mid-sized and large organisations. 77% of large organisations (over 250 employees) and 69% of mid-sized Frost & Sullivan Australian MDM Market, 2013 Copyright Frost & Sullivan 19

20 organisations (50 to 249 employees) prefer an on-premise model for the MDM deployments. On the other hand, 60% of small organisations (less than 50 employees) prefer a cloud based model for their MDM deployments. Due to the high price sensitivity and fewer internal IT staff, small organisations find the overall cost of owning an on-premise model very expensive and resource intensive. As a result, small organisations show a stronger preference towards cloud based models. Figure 8 Preferred Deployment Model for MDM Solutions - Comparison by Company Size 77% On-premise based application. Application stored within the enterprise 69% 40% 23% Cloud based application. Application hosted by a third party 31% 60% Source: Frost & Sullivan; Sample size = 155 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Over 250 employees employees 1-49 employees Telcocommunications providers (telcos) in Australia hold a strong position for deploying MDM solutions and for providing the associated services. 56% of organisations prefer to use a telco such as Telstra or Optus to purchase MDM licenses and for procuring post-deployment services such as maintenance and support. Telcos are advantageously positioned for technology deployments due to their ability to bundle solutions and services with carriage. Telcos typically do not develop their own solution and opt to partner with an MDM vendor to offer the solution in a customised bundle. Both Telstra and Optus partner with major MDM vendors (such as AirWatch) and offer their customised versions that include cost of carriage and/or mobile plans. Organisations are almost evenly divided between purchasing MDM solutions from security vendors and specialised MDM players. 18% of organisations prefer to purchase MDM solutions Frost & Sullivan Australian MDM Market, 2013 Copyright Frost & Sullivan 20

21 from security vendors such as McAfee, Symantec and TrendMicro. Over the last few years, a number of network security vendors have entered the MDM market based on their endpoint security expertise. These vendors typically develop their own MDM solutions and bundle it with their core security applications, thereby extending coverage from desktops and laptops to mobile devices. Specialised MDM vendors are preferred by 17% of organisations for their MDM deployments. MDM players are poised for strong growth in the market due to the ability to offer their solutions directly to customers and in-directly through resellers and channel partners. Figure 9 Vendor and Service Provider Preferences for MDM Deployments Telcos (such as Telstra or Optus) 56% Security vendors (such as McAfee, Symantec or TrendMicro) 18% Specialised players (such as Airwatch or Good Technology) 17% System integrators and channel partners (such as Dimension Data or UXC Connect) 9% 0% 10% 20% 30% 40% 50% 60% Source: Frost & Sullivan; Sample size = 227 Frost & Sullivan Australian MDM Market, 2013 Copyright Frost & Sullivan 21

22 5. About the Authors Anand Balasubramanian is an Industry Analyst with Frost & Sullivan s ICT team in ANZ. He joined Frost & Sullivan in Jan Anand s areas of expertise in Frost & Sullivan have been in Enterprise Communications, including Unified Communications, Video Conferencing and the Contact Centre markets. His consulting experience includes covering the Multimedia messaging, Wide Area Networks (WAN), Content Distribution Network and Online Video Platforms markets. He has also worked on Data Centre projects for some large global clients and recently authored the Australian Enterprise Mobility report. Anand s work has been quoted in leading ICT publications in the region. Audrey William is the Head of Research at Frost & Sullivan s Australian and New Zealand ICT Practice. She leads a team of analysts in the areas of Enterprise Communications, Cloud Computing and Digital Media. Audrey started as one of the pioneers at Frost & Sullivan as the company began its expansion into Asia-Pacific in Her years with the firm has taken her from Kuala Lumpur to Sydney, and seen her building and mentoring a team of analysts across geographies in Malaysia, Singapore, South Korea and Australia. Throughout her tenure, she has acquired expertise in areas such as Unified Communications, Telephony, Conferencing and Collaboration, Digital Signage, Contact Centre, Cloud Computing and Social Media. Audrey is also often invited to speak at regional vendor conferences and trade events and has presented at over 80 conferences in the region. Frost & Sullivan Australian MDM Market, 2013 Copyright Frost & Sullivan 22