38 per cent of enterprises expect to stop providing devices to workers by 2016, according to research firm Gartner.

Almost four in ten enterprises expect to stop providing devices to workers by 2016, according to research firm Gartner.

Following a global survey of chief information officers (CIOs) the research firm found that 38 per cent of companies expect to stop providing devices to employees over the next three years, as bring your own device (BYOD) programmes continue to become commonplace.

“BYOD strategies are the most radical change to the economics and the culture of client computing in business in decades,” said David Willis, vice president and distinguished analyst at Gartner. “The benefits of BYOD include creating new mobile workforce opportunities, increasing employee satisfaction, and reducing or avoiding costs.

He added that the business case for BYOD still needs to be better evaluated and argued that most leaders do not understand the benefits.

“If you are offering BYOD, take advantage of the opportunity to show the rest of the organisation the benefits it will bring to them and to the business,” counselled Willis.

According to Gartner, roughly half of BYOD programs provide a partial reimbursement, and full reimbursement for all costs will become rare. The research firm believes that due to mass market smartphone adoption with the steady declines in operator fees, employers will gradually reduce their subsidies and as the number of workers using mobile devices expands, the number of employees who receive no subsidy at all will rise.

“The enterprise should subsidise only the service plan on a smartphone,” said Willis. “What happens if you buy a device for an employee and they leave the job a month later? How are you going to settle up? Better to keep it simple. The employee owns the device, and the company helps to cover usage costs.”

Gartner also found that while BYOD is occurring in companies and governments of all sizes, it is most prevalent in midsize and large organizations ($500m to $5bn in revenue, with 2,500 to 5,000 employees). Adoption varies widely across the globe. Companies in the United States are twice as likely to allow BYOD as those in Europe.

Dave Labuda, founder and CEO, Matrixx Software

Given enough time any market will move towards efficiency, says Dave Labuda, CEO of real-time charging system provider Matrixx Software, and confusion will give way to intuition. He offers the example of the grocery retail market, which despite many thousands of prices and many thousands of products, all of which can change from one minute to the next, has evolved to allow consumers to shop without confusion thanks to a level of efficiency that makes the navigation of a vast amount of data relatively simple.

The consumer knows, he says, that if they want to buy an expensive bottle of wine for a celebration there are just as many options open to them as if they want to buy a cheap one for commiseration. Market efficiency allows the seller to provide a product or service matched to whatever sum of money the buyer wants to spend.

The market for mobility services has yet to reach this point. In many instances operators have resisted moves to efficiency defined in this way, preferring to reap the benefits of higher margins than are truly justified. This may work in the short term, Labuda says, but it is not a sustainable model.

Matrixx recently conducted some research with analyst Stratecast into enterprise market mobile spend that threw up an effective illustration of inefficiency in action. The firm found that 60 per cent of mobile operators are leaking $20m/month apiece because enterprise customers are refusing to pay bills that are substantially more expensive than they were expecting.

Over many years enterprise customers have become used to predictable mobile bills for voice and text services. But since the widespread uptake of mobile data services—both corporate and consumer—bills for a large enterprise can vary by as much as $200,000 per month due to unanticipated overages, Labuda says. And, when that happens, the enterprise will as often as not simply refuse to pay.

“Even more interesting,” Labuda says, “is that some operators don’t even bother to send the bill when this happens. They just write it down to the normal monthly amount before the invoice is issued because they don’t want the confrontation. They just eat the difference because they know it will be disputed.”

At first glance this sounds like a simple enough situation to judge; enterprise customers are behaving unreasonably by taking what they want and refusing to pay for it. But Labuda argues that the fault is not all theirs, returning to his retail comparison by way of explanation. “Whose fault is it if you go shopping and you have no way of knowing what you’re spending because there are no prices on anything?” he asks. “The enterprise and its employees, the end users, fundamentally lack control over what they’re spending. Is that really their fault?”

The problem is already being exacerbated by the growing popularity of BYOD (Bring Your Own Device). The explosive uptake of smartphones and tablets in the consumer sector has changed the face of corporate mobility, as employees begin to look upon their clunky, centrally allocated QWERTY Blackberrys or their functionally limited voice-centric devices with something approaching scorn. Factor in the increased usage of temporary staff and external contracts and you have a mass of personally sourced devices that people want to use for corporate access. Control and security, so beloved of CIOs and admin teams, are very much under threat.

One of the leading enterprise concerns with BYOD is the additional cost it might entail. How can they be certain that the bills they’re footing on BYOD devices relate to legitimate, enterprise usage? “You have end users with no visibility, no transparency and no control running freeform across the smart device space, doing whatever they want at the company’s expense,” says Labuda.

In the face of this trend, enterprise customers are beginning to figure out what they want. It might be that they’d like to specify that they won’t pay for any access to streaming video for employees while roaming, on the reasonable assumption that the video is not business-related. Or maybe they want to be able to define their liability by the hour of the day, paying for all usage between 9am and 6pm, but nothing outside of these times. Broadly, they don’t want to pay for anything that doesn’t benefit them—and their specific requirements are starting to feed back to the operators.

As is often the case, the problem for operators lies with their legacy systems, Labuda argues. That simple, reliable voice and text usage paradigm that enterprise customers became used to was easily managed by old batch-oriented postpaid billing systems. Real time visibility of what users are spending and the ability to manage the service in real time is, in many cases, simply not available to corporate customers.

“Enterprise is the last bastion of the classic, batch billing relationship—and that is because of scale and complexity,” Labuda says. “If you’ve got an enterprise customer that spans six countries and has 100,000 employees, the legacy billing system that’s built for it is very complex and the traditional real-time systems can’t handle that complexity. It’s only with the new, emerging systems that you can look at moving that type of relationship to real time. ”

Most of the network equipment that Matrixx encounters has the ability to provide the real time interface that more sophisticated billing solutions can exploit, Labuda says, and most platforms have the kind of flow-based capabilities that allow them to distinguish email traffic, say, from YouTube. “What’s really lacking is the on the business support side, in terms of the actual, real-time charging platform that can handle the scale and complexity of this kind of model,” he says.

With such a platform in place, enterprise customers can start to get access to the level of sophistication they’re looking to apply to their mobile spend. They can buy service in bulk and distribute it as they see fit across different departments. If an employee is on leave for two weeks that person’s usage can be reallocated to a department that, in that particular month, is generating particularly heavy usage. And employees using their own devices can be required to pay for whatever services they’re using on their own time, or for their own purposes.

Nor is this just about giving the customer what they want. Some of that $20m/month that 60 per cent of operators are letting slide can be reclaimed if the operators’ billing systems can offer proof to the enterprise customer that the usage was known about, requested and not blocked by the customer.

Here the use of self-service solutions is very important. But while the enterprise has full control over their service allocation and can distribute it at will—and in line with their own rules, checks and balances—it is crucial, says Labuda, that operators don’t relinquish all control.

“If operators give complete control to the enterprise then the enterprise can turn off all the transparency and claim ignorance,” he says. “What the operator wants to do is overlay certain levels of real time notification and visibility which the enterprise can’t fiddle with, because that’s the operator’s financial defence.”

Operators are famed for inertia when it comes to B/OSS upgrades, motivated by the scale of the job and the very real fear that, if you start to tinker with substantial upgrades, your existing billing functions might fail. Nonetheless, says Labuda, they are embracing the move to real time solutions for enterprise customers.

Operators’ first use of real time was a negative one, he says, as they used it to throttle back the service of anyone who had exceeded their spending or usage limit. Now they want to move to a positive approach, with more sophisticated pricing and transparency of spend that allows them to create upsell opportunities. And, he says, legacy systems need not kill their enthusiasm.

“When I look at the projects that we’ve got underway, in every case there is a legacy billing system that will be sitting behind us. What we’re doing is absorbing all the real time chaos and complexity and providing a nice batch view to the legacy billing system. It doesn’t know the world has changed, it sees things as it wants to.”

There is no hiding the complexity of the modern world from the people running mobile operators, though, and there’s never a good time to spend money or make a change. Timescales for the shift to sophisticated, real time charging solutions for the enterprise market will vary tremendously from operator to operator but, says Labuda, we might see some emerging market players overleap their counterparts in more developed markets.

“In countries with very high prepaid penetration, operators’ postpaid billing systems are almost exclusively used for enterprise customers,” he says. “There’s a tremendous financial motivation to move that relationship to real time and retire that legacy system because it’s very expensive to have to maintain it for such a small percentage of your customer base. In a classic postpaid world getting rid of that legacy billing infrastructure will be a very slow process, but over time it will become less strategic and less visible.”

The process will be slowed, no doubt, by the fact that some operators will choose the path of least resistance and eke out their flat rate enterprise charging for as long as they can, continuing to tolerate the leakage because it’s simpler. But the winners, in Labuda’s world view, will be the ones that spot the opportunity to strengthen their customer relationship by innovating.

“If you have an inefficient market that allows you to charge 1,000 times your cost for something that’s great—but it’s not going to stay that way. Efficiency allows for tremendous opportunities but you have to be aggressive and innovative to win.”

The reaction of central IT functions and CIOs to BYOD has been, and remains, mixed

Enterprises are facing a challenge from employees who want to use personal devices to access corporate data. Perceived benefits around cost and productivity are balanced by concerns around device management and security. Mobile operators are positioning themselves to address these concerns and facilitate the trend.

The starting point with an investigation of a new tech trend these days is often a quick look at its position on Gartner’s famed Hype Cycle for Emerging Technologies. Which stage it is judged to have reached on the Tolkien-style quest through the Trough of Disillusionment, up the Slope of Enlightenment and on to the hallowed Plateau of Productivity is always an interesting indicator.

Bring Your Own Device, the movement that sees enterprise employees wanting to use their personal devices to access corporate functions and data, sits at the very Peak of Inflated Expectations, according to the version of the Cycle that the research house published in July of this year. For Gartner, at least, it has some way to go.

It is indeed early days, with BYOD having generated a fair amount of push back from corporate IT administrators and CIOs when it first gathered enough momentum to have been defined as a trend. This is because BYOD has emerged from the field, not from the careful planning of corporate IT strategies—and not from the minds of service providers looking for diversification in the business. In fact, like so much else in recent years, its growth can be traced back, in part, to the popularity and uptake of the iPhone, and the class of smart devices that has emerged in its wake.

In an interview with MCI, Vivek Badrinath, head of Orange Business Services, points out that while mobile telephony may have had its roots in the enterprise, it really blossomed in the consumer market. It was as consumers that we moved to the next level of attachment to our mobile phones, drawn by the mixture of utility and entertainment afforded by the application-based content model.

Alive to the benefits of their new devices, corporate employees have started to either favour them over the more basic handsets allocated to them by their IT departments or seek to use them in the absence of an officially provisioned device. As Nigel Pindar, who led a BYOD implementation programme for MCI’s parent company Informa, points out: “The technology people are buying for themselves is better than the technology with which their employers are supplying them.”

The high profile challenges faced by Research in Motion, which still enjoys a near monopoly in the enterprise mobility sector, bear this out. RIM’s Blackberry devices didn’t suddenly stop doing what they were supposed to. Instead the firm found itself (aside from a niche, teen enthusiasm for its instant messaging product) failing to compete in the consumer market. This really ought not to reflect badly on the firm, given that consumer devices were never a problem that RIM set out to solve.

Whether or not RIM’s difficulties have driven the BYOD phenomenon, whether it’s the other way around, or whether the relationship between the two developments is simply one of coincidental timing is a matter for debate. But as Mobeen Khan, CMO for advanced mobility solutions at US operator AT&T, observes: “Demand has grown and choices have improved. As a result of that, a single vendor solution is just not going to cut it any more.”

But the drivers aren’t limited to device snobbery. In the modern corporate world there are many temporary employees; contractors or consultants on secondment, who cannot function without access to key client data. It can be easier to facilitate that access through their own devices than provide them with a centrally sourced, temporary fix.

Remote working is also increasingly popular, placing greater demands on the central IT function at an enterprise to look for more efficient ways to connect employees off-premises. In smaller organisations, meanwhile, device procurement is a headache that the leadership may well be happy to do without.

Looking forward, Jeremy Spencer, head of propositions and campaigns at UK operator Everything Everywhere, suggests that LTE will accelerate the remote working trend. Spencer is certainly on message; Everything Everywhere recently announced that it is to become the first UK operator to launch the next generation network technology, lighting 16 cities before the end of 2012.

“The changes that 4G will bring to the device and the usage patterns are amazing. It really does make mobile working feasible in terms of access to business systems, and doing business on the fly,” he says. “It’s going to drive more businesses to want to make more use of mobile data and flexible working.”

Just because something is happening doesn’t necessarily make it popular, though. The reaction of central IT functions and CIOs to BYOD has been, and remains, mixed. The departments and people responsible for these functions like control and they like security; two factors at which RIM’s Blackberry Exchange Server has excelled, hence its dominance. Controlling and guaranteeing the security of a wide range of employee-owned devices is far more difficult.

In a recent survey of 73 CIOs from developed market multinational corporations (MNCs), analyst Ovum found that BYOD ranked bottom of a list of 12 mobility priorities, with half of respondents deeming it of either low or zero importance. Ovum identified security as the greatest concern for those MNCs.

“From speaking to our enterprise customers as well as going by AT&T’s own experience, control and security are areas that IT admins hold very dear to their hearts,” says Mobeen Khan. “Any time you modify rules around security and management of data it’s a difficult decision for these folks.”

But resistance to the trend appears to be on the wane, even among its most staunch opponents. “About a year ago, the CIO of a very large, Northern European corporation said to me: ‘If [my employees] want a phone from me it’s going to be a Blackberry and if they don’t like it they can go and buy their phone in a shop. But if they want to connect to my IT they go through the Blackberry or nothing’,” recounts Vivek Badrinath. “Even that person is starting to come round to the idea now.”

Part of the reason is that the tech-savvy workers pushing the BYOD trend from the field are often more than capable of implementing their own workarounds to gain access, of which there will be no visibility for the IT admins.

In a study published recently by Cisco which focused on enterprise attitudes in the US, Canada, UK, France, Germany and Spain towards the rise in popularity of tablet devices, 48 per cent of respondents said their company would never authorise employees to use their own devices for corporate access. But 57 per cent of those surveyed said that employees were using personal devices without consent, a trend that was highest in the US, where 64 per cent of respondents conceded that it was happening.

Absolute control over all devices accessing the corporate network may be CIO nirvana, but it is better to have less control over all devices than none over some. BYOD should be about “moving from control to management,” says AT&T’s Khan.

Another reason for the softening of attitudes to the trend is that it is not just field workers that are asking to bring their own devices to the enterprise. Often the senior executives are the first to acquire the latest in personal devices and it will be these people that demand BYOD access be granted before the rank and file. When the CEO comes knocking with a request like that, nobody in IT support is going to tell them it can’t be done.

There are also perceived benefits to BYOD, chief among them cost and employee satisfaction. If employees are buying their own devices to the tune of hundreds of dollars, the thinking runs, the enterprise can reap significant savings on device procurement.

“We keep telling CIOs that this is a blessing in disguise because otherwise they’re in the middle of this arms race towards bigger screens, bigger memory, better devices, better materials,” says Vivek Badrinath. “I think most of them are valuing that. They’re fed up of being the person who employees look at in the corridor and think: ‘that’s the guy who won’t let me have an iPhone’.”

Cost savings around procurement may well turn out to be an upside but there is an important counterpoint. As bulk buyers, enterprises have access to levels of discount on both devices and usage that individuals do not. They might well incur substantial costs in having to reimburse airtime charges and in processing a much higher volume of expense claims.

Employee satisfaction seems more straightforward. In a second study by Cisco, which surveyed 600 US IT and business leaders (the US is the most advanced BYOD market) the ability to carry out work-related tasks out of working hours, ranked second behind device choice in the list of employee motivators for BYOD. Productivity gains are another attraction.

For CIOs, though, becoming comfortable with BYOD as a concept is really only the beginning. A number of stiff challenges await any organisation that looks to embrace the trend, beyond the headline concerns of security.

How do they approach payment for the services being consumed? How do they manage a much wider range of devices, and indeed decide which to support and which to exclude? How does the burden of support get split between an operator and an IT department if that device has two distinct usage profiles » and sets of requirements? What happens when employees want to keep using their existing service provider—to bring their own network as well as their own device?

These are serious challenges for CIOs and sit at the heart of the opportunity in the BYOD space for mobile operators’ enterprise services departments. “The feedback I’m getting from our enterprise community,” says Everything Everywhere’s Jeremy Spencer, “is that they are really struggling with all these issues. They want the operators to think it through for them and come back with ideas and suggestions for guidance.”

AT&T’s Mobeen Khan picks up the thread: “Let’s say you allow some active sync of email with some simple encryption and you start allowing employees to bring in their own devices. The next level is that the employee now needs CRM access. Traditional IT departments are not used to managing those kind of things on a wide variety of devices, they’re much more used to a controlled environment like a laptop, or desktop PC. BYOD is about more than just managing the data and devices and being able to wipe them clean, it’s about managing your entire work environment.”

The US operator is at the vanguard of BYOD, and its Toggle solution for device segmentation is often referenced by other operators. Toggle—based on technology provided by OpenPeak—takes a literal approach to the issue of dual usage profiles on a device by creating a secure container that sits on the device and houses all corporate data and functions. It has a component that allows the IT admin to set policies and rules around when and how data can be accessed, what kind of apps need to be deployed and any reporting that is generated from the container.

When the container is first installed on the device it scans the entire device for security threats and alerts the user to any that it discovers. The solution allows remote shutdown of the container, without affecting the rest of the device—a functionality that is common to many MDM platforms targeting BYOD, given the different types of content that sit on the devices.

Policies include geo-fencing and time-stamps, designed to restrict access to data to certain locations—corporate campuses, say—or to certain hours of the day. This latter functionality allows US enterprises to ensure that unionised employees are not involved in work-related activities outside of the hours that they are contracted to work.

“The IT admin desk can monitor every single communication, data, voice or messaging, that goes on inside that container,” says Khan. “They can implement policies that compensate the user for the number of calls they make or messages they send, or they can generate two bills; one that goes to the home of the end user, and one to the IT admin.”

True BYOD has to include the ability of the user to maintain their existing service plan. This is particularly complex for operators looking to provide BYOD services and it’s an issue that is being dealt with in various ways. Everything Everywhere’s Jeremy Spencer says that his firm offers substantial discounts to employees of its enterprise customers, which is partly motivated by the desire to simplify the provision of BYOD services. This is good news for EE when it works, but it doesn’t really address the problem.

Uri Gurevitz, marketing manager at B/OSS solutions provider Amdocs says his firm has seen “no real solution” to the BYON (where the ‘N’ stands for network) so far. “Most of the enterprise customers who do allow employees to BYOD will limit them to MNOs that they can work with, so it’s not completely open,” he says.

Support for dual lines, including lines from separate mobile service providers, is a functionality that AT&T is planning to introduce in the near future, according to Mobeen Khan. He declines to explain exactly how this solution will work when the Toggle container is installed on a non-AT&T device but offers a hint, saying: “think about call-forwarding as a mechanism. It will handle it something like that.”

For AT&T devices a more sophisticated dual line solution is available, but Khan says that operators have to accept the reality of a world in which competing operators will need to provide service to a single device based on consumer and enterprise divisions. “We’re starting to raise this issue at an industry level. We need to decide how we’re going to get this accomplished in a more elegant way.”

Discussions are underway at US trade association the CTIA, he says, although industry operator group the GSMA declined to comment, saying that BYOD is currently viewed internally as an enterprise issue.

It could simply be viewed as a form of roaming, if there was enough collaborative weight behind a drive to get it right, Khan says, although he concedes that, historically, interoperability has taken a long time to establish on more than one occasion. “Carriers are already exchanging this kind of information on a roaming level. That connectivity exists,” he says. “We just need to agree on what the right mechanisms are as well as the frequencies and the level of detail that needs to be exchanged.” AT&T will issue a vision statement for such a collaboration in the near future, he says.

A co-operative approach is particularly important given that, despite attempts by large enterprises to centralise their mobility services, many procurement deals are struck at a regional, national or even departmental level, with a single MNC often likely to have a number of different operator partners.

Over 60 per cent of MNC CIOs interviewed by Ovum said that that while mobile strategy is set at a global or regional level, services are likely to be sourced locally. “Mobile service providers looking to win managed mobility contracts should recognise these conflicting trends,” Ovum advises. “They need to help multinationals that are ready to take a holistic view of mobility and want to drive their mobility strategy through their organisation. This will include support for more flexible usage policies that might vary considerably by country or employee role.”

No matter how sophisticated operator- and vendor-driven BYOD solutions become (and most operators with significant enterprises’ business will resell MDM solutions from a number of vendors), not all enterprise customers will embrace it.

Everything Everywhere’s Jeremy Spencer relates an experience with one “large professional services organisation” that looked to implement a hybrid model that allowed its employees to choose their own devices from a range that included the most popular, while the employer subsidised both the cost of the handset and the cost of the airtime. But the client withdrew the service “because they found the overhead of trying to manage an incentivised choose-your-own-device programme just wasn’t worth it.” This organisation simply reverted to supplying its employees with a device of its own selection.

But the consumerisation of IT, as it has become known, is not going away and there are considerable opportunities available to operators that are able to pull together a solution that implements the key elements of security, device management, flexibility and billing, and offer it as a managed service, taking the difficulty and responsibility away from CIOs with plenty of other pressing issues to consider.

Operators should take heart from another statistic from Cisco’s global IT study mentioned above. Some 44 per cent of respondents said that dealing with BYOD diverted attention away from other important IT functions that needed their attention.

Certainly operators seem uniquely fitted to this market, as AT&T’s Mobeen Khan suggests: “If you look at who is capable of providing this scale of solution to enterprises, there are only a handful of companies that come to mind. You can’t rely on the device vendor because it needs to be cross platform. You can’t rely on a software vendor because it needs to be a marriage of software, connectivity and device. I think carriers are very well positioned,” he says.

What really stands out, though, is the need for collaboration. And it’s tempting to suggest that the extent to which this happens will really be the measure of how seriously operators want to address BYOD.

If there’s a common ground for RIM and Microsoft, it’s that they both have a lot riding on software offerings that are still in their nascent stages of development

Canadian handset firm and BlackBerry manufacturer Research In Motion (RIM) has seen some poor harvests of late. 2011 was cold and hard, and 2012 hasn’t been any better. At mid-year the company hired JP Morgan and RBC Capital to conduct a “far-reaching strategic review” and to look for partnership options, while also announcing plans to cut a “significant” number of jobs.

But for a firm that has had reigned unchallenged over the enterprise mobility sector for as long as RIM has, the most smarting disappointment has to come from the fact that its crown is no longer secure. The Bring Your Own Device (BYOD) trend is seeing enterprises shift their focus from procurement and control to device agnostic management strategies although that trend is not yet the Canadian firm’s greatest threat. The biggest pressure is coming from a company that has built up majority market share in the enterprise PC space through software—something at which RIM has yet to prove itself.

Microsoft is a silverback in business software, where it enjoys a near monopoly on desktop and portable PC operating systems. But despite several attempts, and to its enduring frustration, the Redmond company has failed to make any real dent in the mobility space. That has never looked closer to changing than it does now, as its partnership with Nokia starts bearing fruit and other licensees begin to offer devices based on the company’s flagship platform, Windows Phone 8.

Windows 8, a broad reaching platform of which the mobile iteration is only one element, is designed to work across all of a user’s devices—desktop PC, laptop, netbook, tablet, smartphone—and its user interface for all mobile devices is based on the same Metro tiled system introduced with Windows Mobile 7. The idea is to make switching devices and working remotely as seamless and familiar as possible.

Familiarity is a key ingredient here—enterprises are averse to change—but Microsoft has got a second ace up its sleeve, an almost cast iron guarantee that it will be able to create a good development community for Windows 8.

RIM has taken note: “If you look back over the last year, we’ve launched more enterprise software services than in the past two or three years in total,” says Tim Hodkinson, director of EMEA enterprise marketing at RIM.

“Just in the last few months, we’ve launched a new version of Mobile Voice System, which is our fixed mobile convergence product. We’ve launched a new version of BlackBerry Enterprise Server and we’ve got another one coming towards the end of the year; we’ve launched Citrix Receiver client on the Playbook, Sharepoint client and a whole bunch of enterprise IM and unified comms clients. But the biggest new product in this space for us over the last few months has been BlackBerry Mobile Fusion, which was our entry into multi-platform device management.”

It’s an impressive list and one that suggests RIM is taking the fine tuning of its portfolio for the enterprise space very seriously indeed. As Hodkinson points out: “We’re starting to call it ‘enterprise mobility management’, because it’s not just mobile device management anymore. It includes heavy aspects of security management, expense management, and application deployment as well. Over the past few months, our customers have seen a renewed focus on us bringing new enterprise related product and services to market.”

The question now is whether RIM can turn its users on to these products and services fast enough to make a difference. BlackBerry 10 (BB10), the company’s next-generation platform, will not be available before the first quarter of 2013, following a series of delays. And while the analyst community does not doubt BB10’s capabilities—it all looks good on paper—this alone is not enough to reverse the decline.

Informa Telecoms & Media analyst Malik Saadi warns that 100 per cent of the nearly 80 million BlackBerry users out there are still using legacy devices, so upgrading all these users to BB10 will not happen overnight and RIM may well lose a great number of users in the process.

The future flagship OS needs to enable a smooth migration of BlackBerry users to a new environment capable of offering a superior experience without compromising the key factors upon which the BlackBerry brand is founded. But RIM has already hit one nasty speedbump in the journey to realise this vision.

The Canadian firm invested in QNX, a microkernel-based framework that can be easily adapted to the hardware it supports, with the view that it could create an ecosystem around the OS quickly. However, it proved very complex for RIM to integrate key BlackBerry applications into QNX, leading to the commercial failure of the PlayBook, the only device powered by QNX, due to a lack of email and BlackBerry messaging service support.

RIM’s alternative solution and a more suitable platform for the next-generation of BlackBerry smartphones is BB10, which brings what RIM regards as the best of BB7 in terms of the UI and services with the modularity, security, reliability and performance enabled by the QNX architecture. Thanks to these qualities, BB10 will be able to integrate and run BlackBerry flagship services natively and, at the same time, run applications brought in from other popular development environments, including Android and HTML5. With these qualities in mind, RIM aims to create a powerful cross-platform environment to take advantage of the innovation from various developer communities.

Differentiation in the smartphone space will increasingly be on the application/service layers and less on platform or hardware. So those that manage to establish a strong brand and an enticing ecosystem will be the most successful smartphone platforms in the market. This is the only way RIM can differentiate its BlackBerry offering and withstand the competition in the mobile platform space.

But if there’s a common ground for RIM and Microsoft, it’s that they both have a lot riding on software offerings that are still in their nascent stages of development.

The hotly-anticipated Windows Phone 8 (WP8) finally made its debut in early September, when Samsung and Nokia announced their first devices. Analysts at Informa believe the fresh platform is equipped with the right tools to satisfy the market’s appetite for innovation and is a challenge to rivals like Apple iOS. However, WP7 is not truly upgradeable to WP8, which will have an impact on legacy devices already in the market, putting Microsoft in much the same position RIM is with regards to BB10.

Yet analysts believe WP8 could be a game changer, winning strong support from the OEM community, including Nokia, HTC, Samsung, LG and Huawei and ZTE, which said they would not seriously engage with Microsoft until WP 8 was ready.
“Although Microsoft hasn’t told us in any great detail what’s in Windows 8 [the desktop version is due for release in the fourth quarter], the fact that there is a stronger tie up between mobile and desktop and support for tablets all makes a stronger and very good argument for enterprise usage,” says Martin Garner, mobile services specialist at analyst house CCS Insight.

Windows Phone 8 fills gaps left by its predecessor, supporting secure booting and full device encryption, based on BitLocker, as well as integration with existing device management systems for remote wiping and enforced password policies. Enterprises will also be able to create their own ‘hubs,’ giving employees a single point of access for business applications and support tickets and alerts.

Although the security features of BlackBerry are well understood and respected by enterprises, many corporations will also have invested a great deal in securing Windows desktop and server platforms, which will translate over to Windows Phone 8. And since many enterprises that have used RIM’s BlackBerry Enterprise Server (BES) have also used Microsoft’s System Centre platform, which features support for iOS and Android, waiting for BES10, which will be the first RIM platform to properly support these other devices seems less attractive.

The crux of it is that Microsoft will benefit greatly from a large installed base of enterprise users and will no doubt reap the extra rewards of a vast marketing budget to be dropped on Windows 8 in the latter part of this year.
“The device ecosystem for Windows Phone is very good and over the next two to three months we will see a rounding out of that portfolio across different manufacturers,” says Garner. “In the case of Samsung, WP8 is not as strategic as Android, but there are enough manufacturers that are struggling on Android that are now licensing WP8 as well, so expect to see a lot more balancing of this portfolio and a serious range of manufacturers offering WP8, making it a much more solid proposition.”

One option that analysts keep proposing and RIM keeps avoiding, is the licensing of BB10 to other device vendors, in order to extend the reach of BlackBerry services beyond its own portfolio of devices. Gross profit from selling BlackBerry devices is in rapid decline, while service revenues have increased consistently, making it increasingly clear that hardware is currently RIM’s weakest link. Licensing its software will enable RIM to target a wider audience and unlock new market opportunities, allowing the company to reinvigorate its position as a leader in delivering a premium customer experience and reliable and secure messaging services.

But RIM’s Hodkinson will not be drawn. “We’re looking at all opportunities. We’re very excited about our new platform and not surprisingly, so are other vendors who got sight of the platform at BB Jam and BB World, but we’ve not made any decisions yet,” he says.

Microsoft has little to lose. The company already has an installed base of enterprise users and has been ineffectually chipping away at mobility for some time now. With a promising new platform and OEM support, the company’s time may finally have come. But for RIM, the clock is ticking. Hardware is weighing the company down and its long time hesitation to go long on software may mean that what is to come is too little, too late.

Microsoft is set to acquire Yammer, a social networking tool for enterprises

US firm Microsoft has announced its intention to acquire Yammer, a social network tool for enterprises, for $1.2bn. Launched in 2008, Yammer allows firms to set up a free secure, private social network, allowing them to communicate and deliver company-wide strategies.

It now has more than five million corporate users, including employees at 85 per cent of the Fortune 500 firms. Following the acquisition, the business will join the Microsoft Office Division, and will continue to report to CEO David Sacks.

“Yammer adds a best-in-class enterprise social networking service to Microsoft’s growing portfolio of complementary cloud services,” said Steve Ballmer, Microsoft’s CEO.

Yammer will continue to develop its standalone service and maintain its commitment to simplicity, innovation and cross-platform experiences. Moving forward, Microsoft plans to accelerate Yammer’s adoption alongside complementary offerings from Microsoft SharePoint, Office 365, Microsoft Dynamics and Skype.

Camille Mendler, principal analyst at Informa Telecoms & Media, explained that the acquisition will be important for Microsoft in its efforts to support the bring-your-own-device (BYOD) movement, currently being seen in enterprises.

“For every device users bring in to the workplace, there’s also a social network that the user brings in as well. Acquiring Yammer will provide businesses better control of those social networks,” she said.

She explained that in certain countries, when an employee is communicating on a social network about corporate issues, the business is legally required to record that conversation.

“As people are using social networks more wherever they are, and using them on their mobile phone – then for Microsoft to provide a tool that is optimised for enterprises, such as Yammer – you can see why that would be attractive,” she added.

However, a problem facing Microsoft is that the competition is strong, with services such as Salesforce’s Chatter also on the market. However, as Microsoft also owns Skype, which is used by a lot of businesses, and Yammer is also integrated with Salesforce, and other relevant applications such as SharePoint, Microsoft is creating a platform to help enterprise users collaborate and communicate.

“Microsoft is very serious about enterprises, unified communications and collaboration,” said Mendler. “Office 365 is picking up steam, it has some very credible tools and Yammer provides another layer of functionality that Microsoft really should have been able to provide a while ago.”

The acquisition is subject to customary closing conditions, including regulatory approval.