How enterprise giants are keeping up with fast-moving mobile market

Keeping up with Moore’s law is like running on an accelerating treadmill. Many older, bigger companies  huff-and-puff to maintain this pace, while younger, more agile startups breeze breathlessly by.

Moore’s Law is the prediction from 1965 by Intel cofounder Gordon Moore that the number of transistors on a chip will double every two years. This notion of “relentless exponential progress” is clearer now than ever before — the size of  computing devices is shrinking and most people can accomplish their computing needs from devices that fit the palm of their hands.

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Mobile technology has transformed the digital world and opened up vast opportunities in social networking, gaming, location-based services, and now even the enterprise. While large technology incumbents like Qualcomm, IBM, and Cisco have extensive resources behind them, their size can make it difficult to innovate. They have to adopt corporate strategies to stay tapped into the pulse of the market and responsive to emerging trends.

Matthew Howard is a managing partner at Norwest Venture Partners (NVP). He is a well-known enterprise tech venture capitalist who has appeared on the Forbes Midas List as a top 100 investor for three years. He focuses his efforts on mobile, security, rich media, cloud-based services/applications, and networking and storage, and he has served on the boards of over 10 acquired companies. Before joining NVP, Howard was an early employee at Cisco. He has also served on the board of the Wireless Communications Alliance.

Howard has expertise in enterprise tech and mobile tech, and he has seen the market evolve over the years. He will sit down with Qualcomm chief marketing officer Anand Chandrasekhar during our MobileBeat conference Tuesday and Wednesday to discuss how giants like Qualcomm are processing the fast pace of mobile development and adapting to consumer demand for the latest, greatest thing.

We caught up with Howard in advance of MobileBeat to hear his views on what legacy companies and startups alike can do to stay competitive in a rapidly changing marketplace.

VentureBeat: What have been some of the most profound recent changes in wireless?

Matthew Howard: The technology for supporting smartphones is advancing fast within the enterprise, and a mobile presence is increasingly important for organizations. There are some companies that have always had a mobile presence, but it frequently targeted a specific segment of the workforce. Since the lightbulb went off universally, enterprises now live in the “mobile first” world, and today’s enterprises look at mobile from a more comprehensive standpoint. A mobile presence is strategic and even getting exposure in the board room.

From the consumer standpoint, the experience has obviously improved significantly on smart phones. The wireless experience has now exceeded the laptop experience in some instances—particularly as laptops don’t typically possess navigation and cellular capabilities. Laptops also don’t fit very well in your pocket and many relevant applications are only available on mobile devices. Not only do you have a browser experience and office applications on your mobile device, but consumers have access to countless apps that are “mobile first.” In addition, smart phones continue to be the “Pac-Man” device by briskly subsuming capabilities that are matching and exceeding the specs of standalone devices, such as point and shoot cameras and navigation. What is next?

VentureBeat: What are some of the successful strategies that “giants” use to stay efficient and ahead on mobile?

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Howard: The “giants” must have an aggressive M&A strategy as things are happening at mobile-first speeds. Things are developing very quickly, and the giants need to be nimble today more than ever before. We are witnessing rapid innovation from Google, Apple, Samsung, and countless startups. If you are a large company, you can’t do everything in-house, so having your fingers on the pulse of the private companies that are scaling rapidly is a smart and necessary strategy.

VentureBeat: Are their drawbacks to the tech world’s “insatiable appetite for speed and connectivity”?

Howard: Whenever the tech world desperately craves something, new markets are formed. In this case, the appetite for speed and stateful connectivity have led to new companies to form by the week. This sounds like a positive thing for entrepreneurs.  However, an insatiable need for something big often causes too many companies to join the battle too late to have reasonable odds for standalone success, and it is easy for investors to follow suit. The drawback is that you can end up being the fly and not the windshield.

You always have to be asking yourself, “Where am I in this rapidly growing market?” It’s easy to say, “I want to be the better Dropbox,” but it’s much more interesting when a company is creating the category. This may be obvious advice that most entrepreneurs have heard before, but you really want be in front of the herd, not in the herd. In a rapidly innovating market, you have to be early and not late and have an obvious, standout advantage.

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VentureBeat: What role do you see large companies playing in the startup and/or mobile sector? 

Howard: We all play a part in this massive ecosystem. In a very fast growing market, a lot of large companies don’t have the time or resources to focus on a rapid innovation cycle. Plus, Wall Street is not very patient these days. At the same time, smaller companies may not have the ability to build out their sales organizations to the fullest. Therefore, there is a mutual need for these startups and larger companies to collaborate. This leads to opportunities for co-marketing and co-selling, OEM relationships, white labeling, M&A, and more. At Norwest Venture Partners, we play a role in this ecosystem by advising and brokering these types of relationships between our portfolio companies and large companies looking to tap into this innovation. It has been a heavy focus for us at our firm for 53 years, and we’re excited about the relationships that have been built over time.

VentureBeat: Mobile is a very hot investment area. In what areas are you particularly interested?

Matthew Howard: Several years ago, when people looked at investing in mobile companies, the focus was almost entirely on consumer startups. The iPhone had just come out, and no one had a clue about the iPad. What they weren’t thinking about was how people used mobile during their working hours and their limitations and potential. When we invested in MobileIron in 2009, the landscape was all about Blackberry, Windows CE, and Sybian. iPad what? Android who? Now, the company has more than 500 employees and 5,000 customers around the world. Mobile technology is transforming the way we work because so many of us crave mobile apps and the latest devices. The last major technology shift in the enterprise was largely driven around Internet connectivity at work and home. Mobile technology is ushering in disruption and market creation forces that will continue to help form a new group of leaders whose technologies will provide the foundation for expanding enterprise mobility.

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