Mobile App Development: Solution Providers Get in the GameBy Alison Diana | Print
The mobile application development market is sizzling hot as companies look for apps to help them connect with customers or even access their own back end systems at the office. Here's a look at the opportunity and what it takes to succeed.
Application-development services are providing the channel with new reasons to revisit existing clients, add new customers—and reap more profits. Not surprisingly, this is causing many solution providers and consulting firms to consider adding this capability to their existing portfolio of offerings.
In part, the overwhelming success of smartphones has created a surge of demand for mobile apps that integrate with business software, that promote an organization or brand, or that can generate income for solution providers’ customers. In fact, mobile applications are expected to generate $15 billion in 2011, according to Dice. Research firm Ovum expects the market be even bigger, hitting $18 billion by year-end, according to its new report: "Mobile Application Download and Revenue Forecast: 2011–16."
"The outlook for the longer term is also positive, with consumers set to continue to use apps to add new features to their phones and to access their favorite services on the go," said Nick Dillon, Ovum devices analyst, in a statement.
Businesses are using mobile apps to attract consumers: Banks, retailers, insurers, government agencies --a host of vertical industries and organizations are tapping this relatively new communications tool. Organizations also want mobile apps for internal use—to communicate with their customer relationship management (CRM) or enterprise resource planning (ERP) solution, for example. And because this market is so new, and because internal IT departments are already strapped with day-to-day operations, many of these organizations are turning to solution providers, consulting firms, and outsourcers for their custom app-development needs.
A Developing Force
Now, building a mobile app is relatively easy when compared with the complexities of writing a complex, enterprise software solution. But businesses and consumers are demanding proven mobile apps that offer the same reliability and performance as their networked applications—especially if they are paying for development services.
Forging a workforce of skilled app developers, mobile or otherwise, can be challenging—and not inexpensive, according to some channel executives who have made this investment in their own organizations.
"Each year we spend over £1 million in research and development into new technology and solutions," said Jose Castro, marketing executive at Transputec, a British systems integrator, which was founded by two software developers, Rickie Sehgal and Sonny Sehgal. "We have always employed a highly skilled in-house development team. These developers support our current product line and create custom solutions for our customers. Initially adding app development to our portfolio of products did not require us to add any additional staff but as demand grew we had to employ a few more developers," Castro told Channel Insider.
In 2010, 35 engineers at Cazoomi, a cloud services and solution provider, spent about 10,000 hours building its integration framework that enables companies to unite their financial, human resources, and other corporate data with their on-premise or Software as a Service (SaaS) CRM platform, Clint Wilson, CEO, said in an interview.
"The barrier to entry is about 20,000 hours, an offshore team that’s very smart, and a couple million bucks. For most startups that’s kind of hard to ask investors—which we have not," he said. "We’re highly profitable because we have a very distributed workforce, no upfront costs really."