The year ahead will be tough for the mobile communications industry as the majority of organisations continue to rein in discretionary spend while keeping an eye on operational expenditure in an attempt to keep costs to a minimum.
Although the widespread move to multi-function front-end devices such as smartphones and netbooks will keep on rising and the adoption of increasingly standard applications such as mobile email will continue to grow apace, investment in complex - and lucrative - back-end systems such as unified communications or presence will falter unless a strong and clear return on investment case can be made.
"It will be a hard market in 2009, leading on into 2010," predicts Datamonitor analyst Daniel Okubo.
"Areas of priority over the year ahead will be security, systems management and enterprise applications such as CRM because the focus is on keeping the lights on and supporting critical business processes.
"Therefore, giving additional functionality to mobile workers is not really a priority when IT budgets are flat."
This statement is backed up by the fact that, even before the recession, the uptake of more advanced communications technologies such as voice/device interaction services had remained limited, being rolled out to senior managers, if at all. And such a scenario is unlikely to change during difficult economic times.
"The enterprise market isn't going to follow the consumer one in the adoption of more sophisticated functionality as at the moment the focus is on cutting costs," Okubo says.
The ROI argument
While many vendors are trying to push the benefits of these newer applications quite
aggressively, the problem for the channel is they mostly centre around enhanced productivity rather
than hard return on
investment (ROI) arguments.
"The problem of convincing people to invest is really tricky. It's not that these products aren't useful or good, but enterprises aren't willing to spend money unless they can see how they'd help reduce costs," Okubo explains.
"What you're talking about is making things simpler and quicker for users, but that can be a hard sell.
"It's about people not missing voice calls, for example, which could lead to missed sales opportunities or slow down interaction with colleagues. But that's difficult to quantify in terms of cost savings."
As a result, he recommends that channel partners home in on organisations in vertical markets such as pharmaceuticals or professional services (which have significant mobile sales, service or consultancy teams needing to make high value, time-critical decisions) as they are more likely than others to spot the potential value of such technologies.
But as a note of warning, even companies here are not deploying such offerings across the board. Instead, they are carefully segmenting groups of users in order to target investment more effectively.
One area in which some companies, irrespective of sector, are showing interest, meanwhile, is in using mobile communications technology to automate manual processes as a means of reducing headcount.
This involves employing devices for more than voice calls or mobile e-mail and using them to access corporate applications such as enterprise resource planning or customer relationship management.
An example here might include enabling sales staff to input customer orders onsite to eradicate the need for additional office-based personnel to undertake back-end data entry.
Patrick Costello, managing director of Sybase reseller ManagemyMobile, says: "The tack 12 months ago was â€˜Can I expand my business and not increase my workforce?', but now it's â€˜Can I use these tools to decrease staff numbers?'.
"So we're starting to see the tip of a wave towards streamlining processes. Over the next six to 12 months, it's definitely going to get bigger."
In a similar vein, mobile communications technology is also starting to be used to track staff productivity levels. An example of a typical implementation in this context is enabling field service employees to use their mobile device to order spare parts onsite after having diagnosed a customer's problem.
Subsequently, however, managers back at head office can monitor staff activity in order to establish how long it took each individual to fix a fault and to evaluate whether they are working at maximum capacity.
If GPS tracking functionality is included in the mobile device, it is also possible to determine whether workers were where they were supposed to be, at the right time.
Fine tuning the workforce
Martin Flick, regional sales director at business voice and data communications consultancy Azzurri Communications, explains: "You can use the technology to fine tune the workforce and ensure that everyone is working at a similar pace by monitoring the statistics around their activity during a working day.
"If some people fix things quicker than others, you can see that they're being productive, while others might need training or maybe shouldn't be there at all."
What this all means in a nutshell is that channel partners need to be able to demonstrate to customers that the business value of undertaking any given initiative in terms of boosting staff productivity and cutting costs outweighs any concerns over upfront investment.
"I believe the next two years or so are going to be tough so the channel has to constantly search for ways to add value to their propositions. If you're just selling products at the moment, the chances are you're going to fail. It's that serious," warns Costello.
One way that ManagemyMobile has attempted to add value to its portfolio is by introducing a managed service. Although only launched in September last year, Costello indicates that the offering already accounts for more than 60% of the firm's new sales and believes that this figure is only set to grow.
The appeal for customers is that, instead of needing to dip into capital expenditure budgets in order to pay for onsite equipment to support their mobile installations, they can now pay a monthly subscription for a hosted solution, remote device management and helpdesk services.
The advantage for ManagemyMobile, meanwhile, is that rather than having to work hard to try and win one-off projects that generate upfront revenues, it can offer a more 'suck it and see approach' that provides it with less spiky recurring revenues.
"People are tired of getting a strong ROI on paper but not seeing it materialise when a solution is delivered into the business," Costello explains.
"Customers are looking at every pound at the moment so you have to be flexible and have a message that suits the market."
Belt and braces
Because caution is the order of the day, however, he is also seeing customers add another layer to the usual purchasing process. While in the past, organisations would typically undertake a pilot project or proof of concept with a limited number of users before moving onto full deployment, they are now undertaking wider production pilots as an interim step to act as an extra safety net.
This prudence is manifesting itself in other ways too, not least in attempts to reduce telecoms bills, which for a lot of organisations are their single largest expense.
As a result, many businesses are attempting to renegotiate existing contracts when they come up for renewal or starting to shop around in a bid to get a better deal.
Although Steven Hartley, senior analyst at Ovum, expects the total number of new mobile connections to increase this year, the focus, he says, is on getting "more for the same, the same for less or more for less".
In the same vein, organisations are also starting to explore the benefits of fixed and mobile telephony convergence, with the aim of reducing mobile phone bills, which often make up the highest percentage of any telecoms-related spend.
"The idea is that you have one platform for fixed and mobile voice. So when someone comes into the office, it acts like a regular handset [on an IP network], but when they're outside, it seamlessly connects to the GSM network and there's only one mailbox," Flick says.
"It's a stepping stone to unified communications, which also involves integrating data, but the key benefit is that you have one device, one billing mechanism and one infrastructure management piece."
Although the market is very much in its early days and the number of dual mode handsets to be had is still limited, Flick believes that the sector is likely to take off over the next year to 18 months.
Unfortunately, however, one of the key inhibitors for those customers wanting to make the move now is the lack of readily available converged skills in the channel. The problem is the market is still predominantly a fragmented one. Currently there are clear lines between the skills of IT or data resellers and telecoms or voice resellers, but ultimately the two will need to come together to succeed.
The challenge at the moment, however, is that many telecoms resellers do not have experience of IP-centric, applications-based voice and data networks.
A lot of IT resellers, on the other hand, are not used to selling or setting pricing for ongoing monthly or quarterly voice or data contracts, not least because their business models have generally centred on one-off product or project sales.
Mark Adams, unified communications practice manager at IT services provider Logicalis, says that organisations need to have the full breadth of skills available both from the voice world and the applications side.
"Getting people in the same room who use common vocabulary and who understand what each other needs is crucial - it's the place where the two sides meet that is the key to success," he comments.
But there is still some way to go before such collaboration becomes widespread. David Ellis, director of e-security, training and professional services at Computerlinks, explains: "The smart ones have got their heads around this, but some have struggled. There are opportunities for resellers in this market, but they do have to be a bit more focused on how they enter it.
"One option is partnering or focusing on developing skills for a particular market segment. Another is to work with distributors like us to develop new skills."
An area in particular demand on the IT side of the equation, for example, is security. While this issue has been consistently high on customers' agendas in relation to mobile communications technology for some time, awareness has become even higher following the spate of recent data loss scandals and with it has come potentially lucrative opportunities.
If resellers are thinking of going down the partnering route, meanwhile, Ellis advises channel partners to find themselves a complementary, culturally compatible organisation that they could do business with first, before establishing suitable mechanisms for passing on mutual leads and working together on joint opportunities.
"Over time, I expect to see more co-operation between different types of channel partners. It's just starting to happen at the moment and isn't that widespread, but technical convergence means that the market is going through a shift, which is going to make it more and more necessary," Ellis forecasts.
Another important consideration in today's bear market is being able to exploit existing customer relationships to the full. This is something IT resellers have traditionally been better placed than telecoms ones to do as their offerings are generally considered to be less commodity and more strategic in nature, particularly if value-added services are included in the package.
A second advantage for IT players is that purchasing decisions around mobile communications technology are progressively being made by IT managers rather than finance or procurement personnel as growing numbers of voice-based applications move to IP networks.
"If you don't land-grab your core business, you're going to come under assault from other areas. So whoever can leverage the customer relationships will win out," Flick suggests. What this all means, he believes, is that mobile communications is a market not in a new stage of evolution, but of revolution.
"As more and more functionality moves to the LAN or WAN over the next few years, it will become less about dealing with line rentals and tariffs and more about the support wrap - consultancy, helpdesk and technical support are all of the key elements needed to win in this space in future," Flick concludes.