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Will Cloud-based Mobile Enterprise Apps Ever Catch On?

[qi:gigaom_icon_mobile] While a good number of consumer mobile applications have tapped into the cloud, so far, only a handful of enterprise mobile applications have done the same. And the members of a panel of VCs at a “Mobilize the Cloud” event earlier this week at Google said they don’t think enterprise apps for mobiles will catch up any time soon. In fact, some think they never will.

The panelists agreed that developers face a set of design hurdles when it comes to developing enterprise cloud-based mobile applications, such as addressing security concerns and ensuring the availability of data and consistent performance. Addressing these challenges is expensive for developers, especially young startups, which is one of the major reasons why only a small number of enterprise mobile apps — from the likes of, Workday and Rackspace — are available. Venrock’s Dev Khare, who prior to joining the VC firm co-founded mobile application software company Covigo, warned startups that the return on investment for mobile applications remains soft and that the systems integration work for building custom enterprise applications has low margins. In light of the cost involved, there’s really no benefit to be had for small companies by building enterprise applications, Khare said.

It’s not all doom and gloom on the enterprise side, however. Greylock Partners’ David Thacker believes that enterprise mobile apps have a chance to innovate with location-based services. He didn’t give any examples, but some possible options would be vehicle fleet tracking or inventory management. But with enterprise mobile applications rolling out at a sluggish pace, who knows when these LBS offerings will hit the market.

7 Responses to “Will Cloud-based Mobile Enterprise Apps Ever Catch On?”

  1. Shivaram Mysore

    I agree with your statement that “addressing security concerns …” are very important to success. On the other hand, we also know that almost anything that a business team wants, they get. The wants are normally productivity ones. With mobile devices becoming more powerful, as noted transportation is one market that will certainly use the same. Medical (doctors, pharmacists, nurses, etc), manufacturing (software tools for checking products in production line, etc) are some of the others that I can think of.

    On the enterprise side, we have already see use of Email, IM, even Citrix apps on a mobile device. There will be mobile applications for the enterprise.

    I believe the question that needs to be asked is who is going make money and how? There are a few answers:
    Packaging these apps with a server side component as a solution is the only way to make money. If it is mobile client application, enterprises normally want it free (unless it is a custom one or a version that they have already been paying money for). There is a cost of provisioning and de-provisioning on a mobile client which the enterprise may or may not own. This is where the server side of the equation may come in.

    There are more … but, in summary, building a mobile application solution has customer value. I would also focus on building apps for business productivity which may get better traction. Security must be in-built and is expected.

  2. One quote is from Covigo which was sold in 2003, at that time there were not as many iPhones and Blackberry’s in use, hence the smaller addressable market. The times are different now.

    In these times when enterprises are demonstrating consumer like behavior, it seems better approach is to have such a service in the “cloud” which takes enterprise applications in the cloud and makes them available on smart phones. I would think, mobile operators should be interested to provide this service also so that they are not reduced to just a pipe.

  3. “…Venrock’s Dev Khare warned startups that the return on investment for mobile applications remains soft and that the systems integration work for building custom enterprise applications has low margins.”


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  4. With the iPhone in the hands of a reported “20% of the Fortune 100 Companies” (, how is enterprise software for mobile not really hitting the big time? I fear that the enterprise market is in decline, and as you have correctly identified the cost issue for development in the enterprise is becoming a big toll for many companies.

    And yet, reading an article from ZDNET ( from 2007 paints exactly the same picture for the enterprise as it does in 2009, why so?