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G00278341

Mobility Support Technology Continues to Drive Lower Cost and Increased Usage Published: 19 October 2015

Analyst(s): David Edward Ackerman, Helen Huntley, Daniel Barros

Business demand for mobility support is evolving as complexity of the services demands new technology and approaches. Sourcing managers need insight to ensure the mobility support area provides effective services and continues to drive out costs.

Impacts ■ A fast-growing mobile environment will challenge sourcing managers, as organizations must

contract to take advantage of economies of scale offered by service providers or else pay too much.

■ End-user outsourcing (EUO) engagements currently have minimal mobile device support from service providers, but with increased complexity in organizations' environments, sourcing managers will require outsourcing mobility.

■ Sourcing managers are contracting only for device management and network connectivity in EUO engagements, but this will quickly change, as users depend on mobile devices to support their digital business initiatives.

Recommendations Sourcing managers must:

■ Assess the performance of the mobility support function. In addition, plan for process updates and technology replacement caused by additional mobile demands on current IT systems.

■ Review the service provider offerings in the EUO Magic Quadrant and the Managed Mobility Services Magic Quadrant to match business demand and complexity with provider capabilities.

■ Plan and contract for mobility functionality, such as application access and application store access, based on your EUO personas for end users.

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Strategic Planning Assumptions By 2018, the total cost of ownership for business operations will be reduced by 30% through smart machines and industrialized services.

By 2018, 30% of our interactions with technology will be through "conversations" with smart machines.

Analysis Organizations are changing their workplaces rapidly as they look to the needs of the end user. The changes include support of a growing mobile environment with added connectivity, a need for application access through mobile devices, and remote and dispatch support of tablets and smartphones. "Magic Quadrant for End-User Outsourcing Services, North America" assesses vendor capabilities in service desk, desktop and mobility support. "Magic Quadrant for Managed Mobility Services" focuses on global mobility service provider offerings to enable effective evaluation. The Magic Quadrants analyze and provide insight into changes in mobility support offerings and new demands of mobile users in the market. This includes user needs for smart mobile devices, which can include bring your own device (BYOD).

The key areas of price impact for mobility services include volume of the services provided, with pricing being very sensitive at less than 500 devices managed. Insights from the EUO Magic Quadrant include:

■ Mobile support delivered to organizations from service providers ranged from 1% to 17% of the total mobility opportunity. The average was 5%. This indicates a significant market opportunity

for managed mobility services in EUO engagements. 1

■ Reference interviews indicated that organizations will typically pay $2 to $4 per user per month for the mobility service, but over $4 is a tough sell for EUO providers, as organizations seek

minimal support services. 2 A managed-mobility-services-centric engagement could see pricing

from $6 to $12 per user per month, as added services are requested for user groups.

■ The EUO Magic Quadrant survey pointed out that organizations did not understand the total cost for them to support users' mobile devices. Thus, service providers keep cost and complexity to a minimum by offering only minor connectivity services and minimal device support to drive down the cost per unit. (For this report's methodology and respondent base, see Note 1.)

Organizations must address the needs of mobile services in an increasingly complex IT and business environment. Insights from the EUO Magic Quadrant and the Managed Mobility Services Magic Quadrant indicate that organizations that see the value of effective mobile services will engage a service provider, while organizations that are not focused on value to the business, address mobile needs with minimal support services. Sourcing managers must define the business value of managed mobility services in end-user service offerings, such that the future needs of the user can be met.

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Figure 1. Impacts and Top Recommendations for Sourcing Managers

Source: Gartner (October 2015)

Impacts and Recommendations

A fast-growing mobile environment will challenge sourcing managers, as they must contract to take advantage of economies of scale offered by service providers or else pay too much

Currently, organizations do not consider its infrastructure service providers as effective providers of mobile services. This will change as service providers make their services better known in the market, and as they mature the offerings.

An upsurge in the need for managed mobility services will enable lower costs, driven by economies of scale and increased automation. Providers are offering many tools to meet the needs of mobile users. In the EUO Magic Quadrant, the most frequently used mobility management tools included: MobileIron, AirWatch, Good Technology, XenMobile, BlackBerry Enterprise Server, Kony, Tangoe, Good Technology-BoxTone, Cisco AnyConnect and IBM's MaaS360. These tools enable organizations to manage mobile assets; secure devices; and provide updates, application access and management console capabilities, as well as many other services.

All of the mobile support requirements are sensitive to organizations' needs for low pricing. However, the impacts and trends found in the EUO Magic Quadrant study show significant growth within the user base, which will enable economies of scale and additional services for an overall cost reduction to organizations. This will drive new delivery and pricing options and opportunities in

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the next three to five years. As seen in Figure 2, the cost of EUO services is continuing to decline. Moreover, there is a set expectation in the market that automation and economies of scale can continue to deliver cost optimization.

Figure 2. Average Percent of Price Reduction and Price Increase at Renegotiation

Data from Magic Quadrant for End-User Outsourcing Services, North America; n = 47 clients who renegotiated within the past 18 months.

Source: Gartner (October 2015)

Recommendations:

Sourcing managers should:

■ Look to outsourcing mobility services with a service provider if your organization has over 500 devices to ensure a reasonable cost per device. Keep in mind demand — as mobile applications on mobile devices grow, so, too, will complexity.

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■ Do a proof of concept to understand the value of the service provider's tools or support of your tools. The service provider can leverage its management processes and monitoring capacity to reduce the overall cost of mobile support in the organization.

■ Develop a roadmap to embed the use of mobile technologies and services required by

business. 3

EUO engagements currently have minimal mobile device support from service providers, but with increased complexity in organizations' environments, sourcing managers will require outsourcing mobility

Organizations are dealing with the need to address more-complex mobile demands of users. For example, users need to access applications on their BYO devices, such as smartphones or tablets. In some cases, this may mean tablet connectivity with work devices for data-gathering purposes. This burden is currently placed on the user, followed by the IT organization. Service providers have not been the normal avenue to meet this demand. Many of the references surveyed did not use the service provider and chose to manage their mobile environments on their own. This lack of outsourcing has not been an issue until now as most mobile environments are growing faster and becoming more complex.

Also, the user demand for more-complex environments has not pushed the internal team to consider added capabilities or 24/7 monitoring. The EUO references indicated a lack of engaging service providers in the BYOD delivery model (see Figure 3). However, this will change as BYOD environments become more complex.

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Figure 3. Who Is Responsible for Break/Fix Support of Mobile or BYO Devices

Multiple responses allowed.

Source: Gartner (October 2015)

Recommendations:

Sourcing managers should:

■ Document the business and user requirements that will dictate the organization's changing mobile culture. This will help predict the future demand and extent of the services.

■ Work to develop a BYOD program that could be managed with a service catalog highlighting capabilities from the application server, network and end-user device.

■ Assess potential providers' support processes geographically, maturity of their procedures, client satisfaction ratings and capability to support a multitude of mobile environment technologies.

■ Understand the total cost of ownership associated with current mobile services, and how the cost may change, given expanded demand.

Sourcing managers are contracting only for device management and network connectivity in EUO engagements, but this will quickly change, as users depend on mobile devices to support their digital business initiatives

Organizations will continue to see an increase in the demand for mobile device use and the necessary support. When service providers are used for mobile support, they are typically relegated

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to a role of device management and connectivity management (see Figure 4). The service provider's lack of engagement in the full delivery of managed mobility services can undermine the ability to provide an effective mobile service for the end user. Sourcing managers must prioritize mobility when they look at the EUO options, or else the users will be ineffective as business demands more mobile capabilities. This will change as business requires users to access applications and deliver results from a mobile device.

Mobile application stores for users to access the applications for their defined work needs will become commonplace. The use of personas to define and distinguish end users will help to enable consistent application access across the user base and provide added security of the applications.

Figure 4. Type of Support for Mobility That Vendor Provides to the Organization

Multiple responses allowed.

Source: Gartner (October 2015)

Recommendations:

Sourcing managers should:

■ Engage solutions that address the gaps in managed mobility services, and know the service provider's ability to meet current and future needs.

■ Contract with an end-to-end secured solution in mind that can address the rapidly changing needs of mobile users. Engage new technology when needed using mobile technology.

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■ Contract with effective pricing options to address mobility services from the provider for today's demand, as well as for future services as the efforts expand.

The insights from the EUO Magic Quadrant have proved helpful as organizations see significant changes in user demand and increased complexity occurring in mobility offerings. This information should be effective in helping organizations and service providers plan for the effective contracting of future EUO services.

Gartner Recommended Reading Some documents may not be available as part of your current Gartner subscription.

"Magic Quadrant for End-User Outsourcing Services, North America"

"Magic Quadrant for Managed Mobility Services"

"Forecast: IT Services, Worldwide, 2013-2019, 3Q15 Update"

"Toolkit: Negotiating Effective SLAs for IT Infrastructure, Applications, IaaS and Business"

"Smart-Machine-Enabled Services Optimize IT and Business Processes"

Evidence

1 The EUO Magic Quadrant covered 19 vendors, 190 references and 112 responses to the questions. Desktop virtualization's slower growth has reduced the overall rate of decline in the desktop market (see "Forecast: IT Services, Worldwide, 2013-2019, 3Q15 Update"). Gartner's database of client inquiries for the past two years indicates that:

■ More than 650 calls addressed the outsourced service desk, desktop or mobility support areas of EUO.

■ More than 2,500 calls addressed clients' overall infrastructure outsourcing needs, which included areas of EUO.

2 "Toolkit: Price Ranges for Service Desk, Desktop and Mobility Services, 2015" used over 250 contracts as the basis for the price ranges. Each contract selected was from a deal considered to be successful from the organization's viewpoint and was less than 18 months old. A few deals with prices either well below the low end or well above the high end were excluded, because there were challenges with these deals, because we were unable to confirm whether these deals were successful, or because we considered them so unusual as to fall outside the normal parameters of deal pricing.

3 "Magic Quadrant for Managed Mobility Services" addressed the business requirements of mobile services, based on the evaluation and market study of 14 service providers.

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Note 1 Methodology

The Magic Quadrant reference check is part of the data-gathering effort to help Gartner build on our existing knowledge of vendors in a particular market. At project kickoff, all invited vendors were asked to submit a minimum of two references that represented the inclusion criteria. Each vendor provided customer reference contact information, which was used to invite the references to complete a 30-minute online survey.

A total of 55 references from 13 vendors completed the survey. Although this is a substantive pool of responses for directional inference, vendor reference data is different from primary research and is not meant to be a representative knowledge base of the end-user outsourcing market. Vendor references are the select customers that the 13 participating vendors chose to share with Gartner, and that ultimately elected to participate as a reference check.

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