Mobile Devices in the Enterprise: MDM Usage and Adoption Trends

WHITE PAPER

Mobile Devices in the Enterprise:
MDM Usage and Adoption Trends
ON An Osterman Research White Paper
Published July 2012

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sponsored by
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sponsored by
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Mobile Devices in the
Enterprise: Mobile Device
Management (MDM) Usage and
Adoption Trends
EXECUTIVE SUMMARY
Mobile devices are becoming an increasingly important component of the typical
organization’s IT infrastructure. For example, Osterman Research has found that
32% of the corporate workforce in mid-sized and large North American organizations
employed a smartphone in late 2011; these figures will grow to 41% in 2012 and
50% by 2013.

Moreover, the diversity of mobile platforms is increasing in three important ways: the
number of different hardware platforms that are used in the typical workplace, the
number of mobile operating systems in use, and the different versions of each
operating system (particularly in the Android market) that must be supported. Add to
this the fact that a growing proportion of these devices and operating systems are
being supplied by individual users who retain ownership of these devices, but access
corporate resources using them – the so-called “Bring Your Own Device” (BYOD)
phenomenon.

KEY TAKEAWAYS IN THIS WHITE PAPER
The combined
• More smartphones, tablets and BYOD = a rapidly growing need for growth of mobile
Mobile Device Management (MDM) hardware
The combined growth of mobile hardware platforms, operating systems,
operating system versions and the increase in corporate/personal mix of devices platforms,
is creating a need for MDM platforms that offer more features, more scalability operating
and better performance than what many organizations are using today – if they
are using MDM at all. systems,
operating system
• The MDM market space is small and fragmented
The market for MDM is on the verge of gaining even greater attention from versions and the
corporate decision makers, which will result in rapid market growth and increase in
consolidation in the market.
corporate/person
• MDM requirements are driven by security, scalability and the need to al mix of devices
move beyond ActiveSync
Organizations that do not address MDM properly face a growing set of risks, is creating a need
including greater downtime, higher IT costs, violation of legal and regulatory for MDM
requirements to protect data on mobile devices, an inability to adequately retain
data on mobile devices, and reduced employee productivity. platforms that
offer more
• More MDM = more IT complexity, more strain on resources and a
growing emphasis on cloud-based MDM solutions features, more
The growing resource drain that mobile management is imposing on IT scalability and
departments is driving many organizations to consider either a managed service
provider (MSP) or cloud-based approach for their MDM solutions.
better
performance.
MOBILE DEVICES MAKING SIGNIFICANT GAINS
PENETRATION OF MOBILE DEVICES
Our research has found that smartphone penetration is reasonably high in the
workplace, with 36% of email users employing a smartphone in a corporate context
as of early 2012 (from 32% in late 2011), although the combination of smartphones
and traditional cell phones is nearly 100% in most organizations. The research
conducted for this white paper is consistent with the research conducted for an
Osterman Research industry analysis studyi that was published in February 2012
showing that smartphone penetration among mid-sized and large organizations in
North America will reach 50% by YE2013.

©2012 Osterman Research, Inc. 1

Adoption Trends
Proportion of Workforce that Uses Smartphones
2011-2013

Recent attempts
by RIM to stem
the tide with new
BlackBerry
smartphones and
the introduction
of the RIM
PlayBook have
Not surprisingly, and despite RIM’s struggles of late, BlackBerry leads the penetration
of smartphone devices in the workplace with 42% of users. BlackBerry is followed by not succeeded in
iOS, Android and Windows Phone, as shown in the following figure. Recent attempts helping the
by RIM to stem the tide with new BlackBerry smartphones and the introduction of the
RIM PlayBook have not succeeded in helping the company to retain its once dominant company to
position relative to alternative platforms in use in the workplace. retain its once
dominant
Distribution of Smartphones by Vendor position relative
to alternative
platforms in use
in the workplace.


Adoption Trends
THE GROWTH OF TABLETS
For a product category that was basically non-existent two years ago, the current and
forecasted penetration of tablets at work, with the iPad in leading position, is nothing
short of remarkable. Microsoft experienced limited success with the tablet
capabilities in Windows XP and Vista, but the resulting devices were expensive and
usually required pen input within standard Windows applications. Tablets running
Windows have become few and far between – at least in terms of actual usage if not
models available. With Apple’s introduction of the iPad, support for multi-touch
gestures, and lightweight applications, the dynamics changed significantly.

On average, the use of iPads and other tablets at small organizations is 50% higher
than at large organizations. It is usual for larger organizations to have more mature
IT processes for approving more devices, but with process maturity usually comes
longer timeframes. Thus, Osterman Research believes that the higher penetration at
smaller organizations comes at the cost of less stringent security precautions.

Proportion of Workforce that Uses Apple iPads and Other Tablets
2011-2013

BYOD…will cut
corporate costs in
the short run, but
will add to them
significantly if
organizations do
not deploy robust
MDM capab-
ilities.

THE IMPACT OF BYOD
Osterman Research found in a study published in 2012ii that the budget for mobile
messaging initiatives and management in 2012 is expected to increase by just under
10% from 2011. However, these figures are significantly lower than what was
forecasted based on a similar survey published the year before. The smaller budget
in this year’s survey may be a direct result of the BYOD trend. Because
organizational decision makers are increasingly amenable to employees’ desire to
supply their own smartphones and tablets, they may now be budgeting less to the
acquisition of the devices themselves and may have more funds available for the
MDM systems required to support them. This will cut corporate costs in the short
run, but will add to them significantly if organizations do not deploy robust MDM
capabilities.

THE GROWING DIVERSITY IN THE MOBILE WORLD
Even though RIM continues to lead in the market for mobile devices used in the
workplace, it is losing ground on two critical fronts. RIM’s market share in the


Adoption Trends
corporate smartphone market is dwindling from the much greater market share it
held just a few years ago – as shown in the following figure – as corporate users and
decision makers migrate toward iOS and Android-based devices.

Demand Among Mobile Users for Various Devices, 2008-2011
% Responding That Users are Strongly Requesting or Clamoring for Devices

RIM’s market
share in the
corporate
smartphone
market is
dwindling from
the much greater
market share it
held just a few
years ago as
corporate users
Second, and perhaps more significantly, RIM is losing the hearts and minds of and decision
consumers – including corporate employees – who are the driving force behind the
BYOD trend. While BlackBerrys are still in demand, iPhones and Android-based makers migrate
devices are in much greater demand. toward iOS and
Android-based
Demand Among Mobile Users for Various Devices devices.
% Responding That Users are Strongly Requesting or Clamoring for Devices


Adoption Trends
THE NEED TO IMPROVE MOBILE DEVICE
MANAGEMENT
A SNAPSHOT OF THE MOBILE DEVICE MANAGEMENT SPACE
Mobile device management solutions are a critical component of any infrastructure
that supports more than a handful of mobile devices. MDM solutions manage mobile
device policies, configurations, permissions, security and other aspects of mobile
device use, ensuring that mobile devices are used in accordance with corporate
policies, regulatory requirements and legal obligations. The absence of MDM in an
organization that relies on the use of company-supplied and/or personally owned
mobile devices is akin to the corporate email “system” being a hodge-podge of
Hotmail, Gmail, Yahoo! and other email systems that are not managed by IT
according to corporate or other policies.

MDM solutions are offered by a number of large and small vendors – more than 80
vendors currently serve this market, including RIM, Microsoft, HP, Good, Notify,
Sybase, Visage, Zenprise, MobileIron, BoxTone, Airwatch, Fiberlink and many others.
The market for MDM is relatively fragmented owing to its relative newness compared
to other markets for messaging system management solutions and tools.
We anticipate
Given the dominance of the BlackBerry – and its long tenure as the leading mobile that the need for
device in use in the workplace – BlackBerry Enterprise Server (BES) leads the
deployment of MDM solutions. As shown in the following figure, our research found MDM solutions
that BES is deployed in more than one-half of the organizations surveyed. to replace BES –
coupled with
Distribution of MDM Solutions by Vendor growth fueled by
organizations
that have not yet
deployed MDM
solutions – will
create significant
change and
consolidation in
the market.

However, the decline of the BlackBerry relative to iPhone and Android devices has
created flux in the market. We anticipate that the need for MDM solutions to replace
BES – coupled with growth fueled by organizations that have not yet deployed MDM
solutions – will create significant change and consolidation in the market over the
next 12 to 18 months. RIM has recently introduced the new BlackBerry Mobile Fusion
server to extend BES to manage Android and iOS devices. While Fusion may save
BES as an MDM platform, it may also accelerate migration off of BlackBerry mobile
devices.


Adoption Trends
RAPID MDM GROWTH IN RECENT YEARS
The penetration of MDM systems has grown significantly in recent years, with more
than one-half of organizations deploying an MDM solution in 2008 or later, although
the most significant uptick in demand for MDM began in 2009.

Deployment of MDM Systems by Date

As the market for
mobile devices
shifts from
BlackBerry to
iOS devices and
Android devices,
THE MDM-MOBILE DEVICE MISMATCH an expanded set
Even though RIM’s share of the corporate mobile device space is declining, RIM of MDM
continues to hold a commanding lead in the MDM market. This is due to a couple of
factors. As the leading corporate mobile platform for many years, organizations solutions will
initially deployed BES to manage BlackBerry devices that were proliferating at a much need to be
faster pace than any other mobile platform. The current dominant share held by RIM
is testament to the legacy impact of MDM systems, led by BES, which were deployed deployed in order
in mid- to late 2000s. to manage the
However, as the market for mobile devices shifts from BlackBerry to iOS devices and mainstream
Android devices, an expanded set of MDM solutions will need to be deployed in order devices.
to manage the mainstream devices. Interestingly, however, as shown earlier in this
white paper, Microsoft’s Systems Center Mobile Device Manager occupies the second
slot in the MDM rankings ahead of any of MDM solutions from Airwatch or Good
which are usually thought of as the more full-featured and market-leading MDM
offerings. There are at least four possibilities for this Microsoft-centric focus:

• Many enterprise decision makers have still not completely grasped the
significance and importance of having highly robust MDM solutions in place.

• Some mainstream MDM vendors still have not engineered platforms that work
well enough with iOS and Android devices to motivate decision makers to
implement them.

• The MDM space is very fragmented and many of the key MDM vendors, such as
Good, MobileIron, and Airwatch, are not spending enough vs. Microsoft to break
through with name recognition and differentiation for their offerings.

• There is a lack of education and awareness by IT about what is required in the
MDM space.


Adoption Trends
While some combination of these factors may be in play in many organizations,
Osterman Research believes that the dominant reason is the first one: decision
makers – perhaps motivated by IT budgets that are still strained because of the
ongoing soft economy – have not fully grasped the critical importance of robust MDM
solutions to manage their mobile users and devices. As evidence of this are the
following data points from the survey conducted for this white paper:

• Among those organizations that have not yet deployed an MDM solution, 36%
indicated that they simply have not yet had a need for such as solution, despite
the fact that the penetration of smartphones in non-MDM-enabled organizations
is reasonably high today and has been growing at a rapid pace over the past few
years.

• 29% of respondents that have not deployed an MDM solution indicated that the
Native Exchange capability for managing mobile devices – ActiveSync – is “good
enough” to satisfy their MDM requirements. A separate study by Osterman
Researchiii found that 90% of Exchange-enabled organizations view the native The rapid growth
mobile policy management tools in Exchange as “somewhat” to “very” sufficient. in the deploy-
• One-quarter of organizations noted that they have not had a sufficient number of ment of sophist-
smartphones deployed in their organization to justify the effort involved in icated MDM
deploying an MDM solution.
solutions will be
• 21% indicated that MDM solutions have been too expensive to deploy, and an driven by a
equal number indicated that there is simply not enough value in MDM platforms
to justify the cost of deploying them. number of issues
with which IT
THE NEED INCREASED AWARENESS IN THE MDM SPACE
It is also important to note that MDM is still a relatively nascent market compared to
departments are
more established ones like email and collaboration. Having said, that, of the IT only just
executives who are “aware” of the importance of MDM, these MDM solutions will take
budgetary priority over many other developing platforms like unified communications
beginning to
or social media management solutions. Because of the immaturity of the market wrestle in the
space, though, some decision makers not sufficiently familiar with all of the available
solutions will thus consider only those MDM solutions that have the highest name
context of
recognition. For example, the survey conducted for this white paper (which surveyed managing mobile
only those knowledgeable about mobile issues in their organizations) asked, “If you devices: security,
were going to switch to a new MDM system (or deploy one initially), which of the
following your organization would most likely select?” The most common response the need to move
was BES, following by Microsoft Systems Center Mobile Device Manager, which beyond
together accounted for 83% of the responses. That is not to say that there isn’t
some merit in selecting either of these systems, but the plethora of viable alternatives ActiveSync and
was not cited in large numbers in our research. scalability.

RESOLVING MOBILE MANAGEMENT ISSUES
Over the course of the next two years, there will be a significant surge in the
deployment of sophisticated MDM systems. For example, our research found that
among those organizations that have not yet deployed an MDM platform, 32% will do
so by early 2013 and another 24% will do so by early 2014.

WHAT IS DRIVING THE NEED FOR IMPROVED MDM?
The rapid growth in the deployment of sophisticated MDM solutions will be driven by
a number of issues with which IT departments are only just beginning to wrestle in
the context of managing mobile devices: security, the need to move beyond
ActiveSync and scalability, each of which is discussed below:

1. SECURITY
Growing potential for the loss of intellectual property
The growing penetration of mobile devices used for critical business applications


Adoption Trends
will increase the level of risk that organizations face. For example, as more data
is sent and stored on mobile devices, the level of compliance risk grows because
the physical loss of devices increases the likelihood of a data breach, loss of
intellectual property and related problems. Moreover, increasing use of mobile
devices in general increases the likelihood that intellectual property will be lost in
the course of users sending content from their devices. Our research found that
among those that would switch to a new MDM platform or adopt one for the first
time, 34% cited the potential for loss of intellectual property as a key factor in
their decision.

The need for IT to regain control over mobile assets
Mobile devices that are owned and controlled by individuals may be more difficult
to remotely wipe when they are lost or misplaced since they are not under IT’s
direct control. This can expose corporate intellectual property to loss and may
result in the breach of sensitive data, potentially triggering state, provincial or
national data breach notification requirements; not to mention compliance
problems under PCI DSS, Gramm-Leach-Bliley, etc.

Retention of mobile data will become more important
Our research
Content repositories – including mobile email and other repositories – contain a found that
growing proportion of business records that must be preserved for long periods
of time. Moreover, this content is increasingly requested during discovery
among those
proceedings and it must be produced when required. As a result, it is critical organizations
that all relevant electronic content be made available for e-discovery purposes.
that would switch
BEYOND ACTIVESYNC to a new MDM
The need to move beyond native Exchange management
There is a growing need for more features and capabilities than are available in
platform or adopt
native Exchange tools as the proportion of employees with smartphones one for the first
increases. For organizations that have only a small number of smartphones in time, 36%
use, native Exchange management tools will often suffice; however, as
smartphone penetration increases in an organization, coupled with more indicated that
education about what higher end MDM platforms can do, native Exchange tools native Exchange
will be replaced. Our research found that among those organizations that would
switch to a new MDM platform or adopt one for the first time, 36% indicated that policies are too
native Exchange policies are too few and insufficient to meet their requirements. few and
2. SCALABILITY insufficient to
A need for improved performance and scalability meet their
Our research found that if organizations were to switch MDM platforms or adopt
a new one, 54% would do so to improve the performance relative to their requirements.
current system, while 43% would do so to improve the scalability of the solution.
Managing mobile devices will consume more of IT’s time
As a result of the growing diversity in mobile platforms and operating systems,
IT will be increasingly focused on managing mobile devices, largely because
many lack robust solutions that can efficiently manage cross-platform
environments. The absence of these tools will force IT to spend an increasing
proportion of their time on mobile management activities, resulting in less time
available for other initiatives. This will drive many organizations to deploy robust
MDM solutions that can improve the efficiency of managing mobile devices.

Mobile users are often more sensitive to downtime
Increasing the difficulty associated with managing mobile devices is the fact that
these devices tend to be used by higher profile employees like senior executives
and salespeople who are typically less tolerant of downtime when trying to
access mobile email or other corporate resources. The research conducted for
this white paper found that only 9% of respondents are “very confident” that
their mobile infrastructure is protected against downtime.

BYOD will necessitate better MDM solutions
Increasing the complexity in the management of mobile devices in the workplace


Adoption Trends
is the growing number of personally owned devices that are being used by
employees alongside company-supplied devices. This is making mobile device
management, in many ways, a shared responsibility between formal IT staff and
the employees they serve – and creating risks and other problems as a result.

Related to this is the fact that different mobile devices may need to be managed
in different ways. For example, a company-provided smartphone may be subject
to a different set of regulatory, legal and best practice considerations than a
personally owned iPad. However, even personal devices can be subject to strict
supervisory and retention rules. For example, the FINRA Regulatory Notice
noted above states that “FINRA expects members to prohibit, through policies
and procedures, communications with the public for business purposes from
employees’ own electronic devices unless the member is capable of supervising, Increasing the
receiving and retaining such communications.” These types of requirements will complexity in the
further drive the need for deploying sophisticated MDM solutions that manage
these types of granular requirements. management of
mobile devices in
ENTER THE CLOUD AND MANAGED SERVICES the workplace is
Our research found that there is significant interest in the use of cloud-based MDM
solutions. For example, in response to a question about which MDM system would the growing
most likely be selected by those switching to a new MDM platform, 31% of those
surveyed indicated that they would likely select a cloud-based solution, such as those
number of
offered by Zenprise, MobileIron, Airwatch, etc. In fact the cloud focus is even more personally owned
pointed towards a private cloud option as 55% consider it important or extremely devices that are
important that customer data hosted in a cloud offering cannot use a database that is
shared with other customers. All of the reasons cited by respondents for an interest being used by
in cloud solutions are also directly applicable to managed services solutions. The employees
reasons cited are simplified administration and maintenance (cited by 69% of those
responding), reduced and predictable costs (39%), improved security (39%) and a alongside
desire not to use internal IT staff to service MDM (21%). company-
In addition to the above data, there are two additional trends emerging, which are supplied devices.
helping to create the perfect storm of MDM management issues: This is making
• First, as higher-end MDM products creep into the marketplace, with them comes mobile device
increased complexity to learn and use, putting further pressure on IT. management, in
• Second, as the percentage of smartphones in the enterprise continues to many ways, a
increase there are more devices to actively manage overall. shared
With regard to the second point, the IT staff requirements focused on managing responsibility
mobile users – and the costs associated with doing so – continue to increase. For between formal
example, the research conducted for this white paper found that FTE staff
requirements to manage smartphone users are increasing, from a median of 2.9 FTE IT staff and the
staff member per 1,000 smartphone users in 2011 to 3.6 today and 4.0 in 2013. If employees they
we assume that the average, fully-burdened salary for an IT staff member was
$80,000 in 2011 (and assuming 3% annual wage growth), just the labor cost for serve.
managing smartphone users is growing at a rapid pace, as shown in the figure below.


Adoption Trends
Annual IT Labor Cost per Smartphone User

FTE staff
requirements to
manage
smartphone users
SURVEY BACKGROUND
Osterman Research conducted an in-depth survey during February 2012 among are increasing,
individuals who are knowledgeable about mobile device-related issues in their from a median of
organizations. The goal of this research was to understand the problems, concerns
and other issues that organizations face when attempting to manage mobile devices 2.9 FTE staff
and integrate them with email systems, databases and various applications. There member per
are a mean of 7,720 employees at each of the 117 organizations surveyed (median is
1,500) and 7,670 email users (median is 7,670). 1,000 smart-
phone users in
The survey base was dominated by organizations that have deployed Microsoft
Exchange: 78% of the users in the organizations surveyed are using on-premise 2011 to 3.6 today
Exchange and 1% are using Office 365 or BPOS. and 4.0 in 2013.


Adoption Trends
ABOUT AZALEOS
Azaleos Corporation provides managed email, collaboration and unified
communications services available in private cloud, on-premise or mixed deployment
architectures. Azaleos’ 24x7 managed services for Microsoft Exchange, SharePoint,
Active Directory, Lync, and both BlackBerry Enterprise Server and AirWatch improve
availability, security and performance, while reducing maintenance time and costs.

The patented AzaleosX technology platform enables customers to maintain control
over servers and data including their location, while uptime, maintenance, and
support is proactively handled by certified experts in its network operations centers.
Hundreds of companies from Fortune 500 to mid-market enterprises rely on Azaleos
to manage their collaboration infrastructures and address issues before users ever
know they exist.

Azaleos is the largest provider of private cloud, on-premise and hybrid managed
services in the communications and collaboration space and the go-to option for
organizations who can’t find a fit with Microsoft or Google public cloud solutions. A
member of the National Systems Integrator program (NSI), Azaleos is one of Azaleos is the
Microsoft’s top 34 partners in the United States and a member of both the Microsoft
Exchange and SharePoint Technology Adoption Programs For more information visit largest provider
www.azaleos.com. of private cloud,
on-premise and
hybrid managed
services in the
communications
and collaboration
space and the go-
to option for
organizations
who can’t find a
fit with Microsoft
© 2012 Osterman Research, Inc. All rights reserved. or Google public
cloud solutions.
No part of this document may be reproduced in any form by any means, nor may it be
distributed without the permission of Osterman Research, Inc., nor may it be resold or
distributed by any entity other than Osterman Research, Inc., without prior written authorization
of Osterman Research, Inc.

Osterman Research, Inc. does not provide legal advice. Nothing in this document constitutes
legal advice, nor shall this document or any software product or other offering referenced herein
serve as a substitute for the reader’s compliance with any laws (including but not limited to any
act, statue, regulation, rule, directive, administrative order, executive order, etc. (collectively,
“Laws”)) referenced in this document. If necessary, the reader should consult with competent
legal counsel regarding any Laws referenced herein. Osterman Research, Inc. makes no
representation or warranty regarding the completeness or accuracy of the information contained
in this document.

THIS DOCUMENT IS PROVIDED “AS IS” WITHOUT WARRANTY OF ANY KIND. ALL EXPRESS OR
IMPLIED REPRESENTATIONS, CONDITIONS AND WARRANTIES, INCLUDING ANY IMPLIED
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, ARE
DISCLAIMED, EXCEPT TO THE EXTENT THAT SUCH DISCLAIMERS ARE DETERMINED TO BE
ILLEGAL.

i
Mobile Messaging Market Trends, 2011-2014; Osterman Research, Inc.
ii
iii


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