Mind Your Middleware
By Jeff Goldman, Thu Jan 02 09:51:03 GMT 2003

A number of studies are predicting significant growth in the mobile middleware market-but some challenges still lie ahead.

Today, United Parcel Service allows its customers to track packages and plan shipments on wireless devices. India Cements' sales officers, while they're on the road, are able to send orders back to the corporate office using SMS. And ADC Telecommunications' sales representatives use wireless devices to check their customers' order status.

What do these activities have in common? They're all enabled by mobile middleware, the software that's used to connect mobile devices to enterprise applications.

It's an emerging market, but it's one that's growing fast-and 2003 is likely to be a big growth year. Recognizing its potential, a number of recent studies have taken a close look at the mobile middleware market and its future prospects.

Predicting that the market will grow to $1.52 billion by 2006, Aberdeen Group analyst Isaac Ro says the time is right for this kind of technology. "There is renewed growth in IT spending heading into next year-and certainly, the devices are starting to get better, and the networks are starting to become more robust, so it's now possible to do something heavier than just email," he said.

Others are even more optimistic. IDC expects the market to grow to $1.7 billion by 2006-and Datamonitor suggests that mobile middleware will be worth as much as $2.3 billion by 2006, with a surge in growth in 2003.

It's still early days, but it's clearly a market worth watching. What challenges lie ahead for mobile middleware providers, and what strategies will help them to win out over the competition?

Mobile What?

According to Ro, one of the biggest problems mobile middleware providers face lies simply in explaining to potential customers what they do. "It's a confusing marketplace," Ro said. "Generally speaking, end users don't have a good understanding of what is possible and what is not."

In broad terms, mobile middleware is any software that enables users to access enterprise applications on mobile devices-but that can leave a lot of room for interpretation. "It can be something as complex as a platform that enables customer relationship management software to be extended out to a handheld device, or as simple as synchronized calendar and contact information," Ro said.

As a result, most customers don't know what they're looking for in mobile middleware, or even whether or not they need it-and they're not alone. Dale Gonzalez, Vice President of Wireless Development for the mobile middleware provider Air2Web, says that vendors have just as much trouble promoting their offerings. "It's very difficult to discuss in sound bites what this stuff lets you do," he said.

The ideal customers, Gonzalez says, are the ones who've tried to do it themselves and failed: they know what they're looking for, and they know how hard it is to build. "In the abstract, the problem sounds very simple: you're just talking about a data pipe," he said. "It's not until after you've seen all the thorns that wrap around that concept that you appreciate the value behind middleware."

Less experienced customers find it harder to understand what mobile middleware can do for them-and to attract those users, many providers fall into the trap of promising to be everything to everyone. "That makes it difficult for middleware providers," Gonzalez said. "People are very jaded by the 'I can do anything' approach. Everybody's been burned by that once or twice, and they're just not interested."

Don't Sell Plumbing

Instead of just selling technology, Gonzalez explains, the key is to sell a specific solution to a specific problem. "You have to create packaged applications that ride on top of your middleware, then lead with those packaged applications," he said. "Then you can discuss the plumbing as a feature of the applications-as opposed to trying to sell the plumbing straight out."

Ro says many mobile middleware companies were founded on the optimistic belief that mobile middleware would be a comparatively easy sell-that customers would be looking for a solution like theirs. "The presumption was that as technologies improved and mobile technologies were widely adopted, there would be a natural need for mobile middleware to facilitate data on these devices," Ro said.

Instead, Ro says, it's only the providers that are able to move beyond the 'any application, any device, anytime' approach that will survive. Most customers aren't looking for a broad solution-but they are looking for specific answers to specific problems. "It's the suppliers that are focusing on specific vertical markets or specific application sets that are beginning to see strong customer wins," Ro said.

A problem solved, Gonzalez explains, can be given an exact dollar value. "When we discuss a field service application, they can know their field service technicians will be able to handle four more calls a day, and that's worth x dollars," he said. "When we built a mobile application for UPS, UPS could say, 'I save $1.50 every time a customer uses this application.' They know exactly how much money they're saving."

In order to help customers to see middleware that way, Datamonitor analyst Tim Gower says it's crucial for vendors to get to know specific sectors. "Increasingly, the role of the vendors will be to understand specific industries, their pain points, and the processes that they can improve through mobile technology," he said. "Vendors will have to start developing niche strategies to target particular sub-sectors."

Focus and Flexibility

Ro says the hardest thing for middleware providers to do is to combine a solid technical offering with real understanding of a specific sector. "The vendors that are getting the most traction right now are the ones who have very strong vertical expertise-they know the government space really well, or they're experts in the petroleum industry," he said.

As the market matures, competition will require that kind of proficiency. "If you don't have expertise selling into the beverage industry for dairy distribution, or the petroleum industry for oil rigs, or the healthcare industry for patient data, if you don't have expertise selling into those types of channels, you're going to have a hard time-because there's going to be somebody else who does," Ro said.

Specifically, Gower says he sees financial services, from insurance agents to equity analysts, as the most promising sector for mobile middleware, particularly in the short term. "It's traditionally an area of priority investment-they've always been prepared to put their dollars where their thoughts are-and some of the business processes are quite suited to wireless," he said.

Focusing on a promising sector will help many companies to survive, but Ro says another key factor will be the ability to work with different devices and platforms. "The market will grow, but there just isn't enough room for all of these guys to survive, because many of them have very proprietary solutions," he said.

As an example, Ro points out that Research in Motion's proprietary BlackBerry devices don't offer that kind of flexibility. "If you buy their devices, their middleware, and their software, you're stuck with their stuff," he said. "If you want to layer other applications on top of it, you're really at their mercy as to when they're going to make that available, to what degree it's compatible with the systems you have, and so on."

Looking to the Future

Gonzalez says that flexibility regarding devices and platforms is a key asset in the current market, particularly with devices changing so rapidly. "I don't think any enterprise wants to lock themselves into a device-or a company-that may or may not solve their needs globally, and may or may not be advancing as fast as some other player," he said.

Because it's still an emerging market, Ro suggests, there's still a lot of room for growth-and it's far too early to be sure who the leading players will be. "No one is taking over the marketplace," he said. "The way things are going to shape out over the next few years, with devices continuing to diversify, there will be continued fragmentation. It'll be a few years before we start to see some clear standards."

Ultimately, Ro says, the providers to watch will be the ones who have figured out both flexibility and focus. "It's a very specific tightrope that vendors are trying to walk right now, and I think the ones who are having the most success are the ones that have demonstrated industry expertise, and can be viable in the long term for a variety of applications," he said.

Jeff Goldman is a Los Angeles-based freelance writer specializing in business and technology issues. He currently writes for ISP-Planet, Wireless Business & Technology Magazine, and the Wireless Developers' Journal.