Brace yourself for a mobile acquisition feeding frenzy

Jack Gold is the founder and principal analyst at J.Gold Associates.

Consolidation will dominate a rapidly maturing mobile market over the next couple of years. Both IBM and Oracle made moves this past week. This is just the tip of the iceberg! If your enterprise is using mobile technology from a small vendor, expect big changes.

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Last week, IBM announced its acquiring FiberLink MaaS360 — a company that provides a cloud-based Mobile as a Service management and security capability to some significant enterprise customers. It’s rumored that IBM paid as much as $300M for this company, although the actual amount has not been disclosed.

A couple of days later, Oracle announced it’s acquiring Bitzer Mobile, a mobile management and security company concentrating on the enterprise market. Coincidence? Not at all. The maturing of the mobile market means the major players all need to accumulate “critical mass”, or risk jeopardizing their hold on an enterprise’s infrastructure.

Over the past 18 months IBM has been buying up mobile oriented companies:  Worklight (mobile app platform), UrbanCode (app development), and Trusteer (fraud detection/security). This is being done to supplement its own products (e.g., Endpoint Manager, Security Access Manager, Connection Manager), and its major infrastructure platform, WebSphere. IBM’s “bulking up” of its MobileFirst initiative through this acquisition spree and its own home-grown products have elevated it on the list of credible enterprise mobile infrastructure providers, although much integration work still needs to be done to make MobileFirst a seamless offering.

For its part, Oracle has been well behind the technology curve when it comes to mobility. Although it has puttered around the edges for years, it has lacked a credible mobile strategy, falling far behind its rivals, particularly SAP, who has gone through its own major technology acquisition phase over the past 2 years (and is hardily done with its acquisitions). With new mobile management in place, including from its biggest rival, it looks like Oracle is finally getting serious about being a credible mobile threat. Acquiring Bitzer is a first step in what I expect to be more acquisition oriented mobile enhancements that will help Oracle regain some competitive advantage for its infrastructure products and applications.

While IBM and Oracle clearly see the maturing of the mobile market as an opportunity to expand their reach and meet customer’s demand for improved mobile infrastructure, these acquisitions are an indication of seismic changes taking place in mobility that have broad implications for nearly all companies.

Most small mobile technology vendors will not independently survive beyond 2-3 years. That means enterprises with products installed from these companies will have to evaluate change/upgrades. In consolidating markets, some vendors remain in play for a number of years, but their ability to grow will be severely curtailed and their products will likely stagnate.

The big players will accelerate consolidation by buying more technology, especially related to security. If you have mobile products installed, your current vendor of choice may ultimately end up being part of IBM, SAP, Oracle, Cisco, Microsoft, Citrix, McAfee, etc. Smaller vendors not acquired will have a difficult future.

Mobile has gone mainstream and integrating mobility into all aspects of a company’s operations is key to long term success. All the large infrastructure vendors know this. The time when they could ignore mobility as a niche play not big enough to be noticed is over.

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Cloud-based mobility solutions are now important to cloud-based infrastructure players. If you are a cloud vendor and you don’t have a significant mobile component, you are not a cloud player longer term. The major cloud vendors (e.g., IBM, Amazon, MSFT, SAP, etc.) are all acquiring mobile integrated solutions. Expect more acquisitions to come and more emphasis on cloud based mobility services.

Bottom Line: If you have a mobile installation (and if you don’t you’re at a serious competitive disadvantage), and have MDM, MAM, EMM or other mobile directed products from the many smaller niche players in the market, you may soon discover that your enterprise mobility vendor is being acquired.

A few pure mobile players of larger size (e.g., AirWatch, MobileIron) will survive. Many with unique technology (of which there are dozens) will be acquired, or simply fade. Consolidation over the next 1-2 years will be fast and furious. You have been warned.

Jack Gold is the founder and principal analyst at J.Gold Associates, based in Northborough, Mass. He covers the many aspects of business and consumer computing and emerging technologies.

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