Mobile App Development: Solution Providers Get in the Game

By Alison Diana

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."

 Near and Far

Some channel organizations and outsourcers turn to international locations for software engineers and developers, working with employees or contract workers around the world. In the case of Cazoomi, about 90 percent of its workforce is located overseas, Wilson said. All these developers are connected via a LinkedIn network, which is available to all Cazoomi clients, he noted.

For its part, Growth Acceleration Partners uses its office in Costa Rica as the site for near-shoring services such as application development; DataArt relies extensively on software engineers in Russia and the Ukraine, Alexei Miller, executive vice president of the software outsourcing company, told Channel Insider.

"We think it’s one of the best regions in the world, in terms of price to performance ratio," he said. "Our success 100 percent depends on whether we can find and keep the good people. And keeping them is harder than finding them. One of the problems our competitors are finding is keeping them. We are so adamant about keeping our turnover low. Stability cannot be over-estimated."

Other channel organizations—especially those serving privacy-sensitive markets such as healthcare, finance, and government—are sticking closer to home, according to McKinsey Quarterly. "Even with work that’s not bound by such regulations, it isn’t uncommon for up to 25 percent of all IT service tasks to remain in onshore or at least close-shore locations (close to the home market, though not necessarily in it), simply because that’s where skilled software technicians are found or can be quickly deployed," a recent McKinsey Quarterly article said.

Keeping IT Real

No matter where employees live, retention is a challenge for channel organizations looking to enter into or expand their app-development services, said Alice Hill, managing director of Dice. It’s a good time for software developers with mobile app skills, especially, she told Channel Insider.

"We’re seeing tech overall showing a real healthy recovery, and I think mobile plays a real part of it," said Hill.

Unlike some areas of expertise, mobile app developers cannot have a long legacy in this field because it is so new. So what should potential employers look for, beyond the usual human resource questions? Often, those interested in this career path have developed mobile apps on their own, if they haven’t done so for other employers or clients. Ensure there is a correlation between their past work and current needs, however.

"There’s a difference between a mobile app developer who can build a really good game and one who can integrate social media," said Hill. "Make sure they tie in to your category. Does that really apply to your business? Is a great game developer going to help you?"

Before opting to make any large-scale financial investments, solution providers interested in mobile app development may consider giving top internal developers time to experiment. This can lead to new revenue opportunities and is a strong employee retention tool, Hill said.

"If you have a big player in your company, this is a great way to give them a project, especially if there’s not an emergency to get an app out," she said. "They are always curious and always want to figure out new things. That’s always an opportunity for them. Boredom on the job is one reason people leave, especially good developers. They’re problem-solvers. You want to put them on new problems if you can."

This article was originally published on 2011-09-26