New Datamonitor research predicts 25% of managed mobile service providers will fail by 2004.
According to a new Datamonitor (DTM.L) report, several factors are having a negative impact on the market for mobile services. These include the immaturity of the mobile solutions market, the declining economy, the small percentage of enterprises willing to outsource the management or hosting of new mobile solutions fully, slashed IT budgets and increased emphasis on measurable ROI for technology investments.
North America holds the largest share of the global outsourced mobile market now, but over the next five years, Western Europe will show strong growth with a compound annual growth rate of 40%, compared to 27% in North America. Datamonitor projects the Western European and North American markets to be worth $277 million and $289 million, respectively, by 2006.
Delays in the roll out of 3G wireless networks have shifted attention to the potential revenues from implementing mobile solutions in the enterprise. Such solutions can enhance revenue generation and improve organizational efficiency. However, in the current economic climate, enterprises will only consider mobile connectivity and computing as mission critical if they can see the financial return on their investment.
Unlike some more exuberant forecasters, Datamonitor believes that just 20% of medium and large Western European enterprises with more than 250 employees will have deployed mobile middleware by 2006. In the US, the equivalent proportion will be marginally higher, at around 22%.
In short, overly ambitious forecasts of growth in the market for mobile enterprise solutions should be treated with caution. Vendors that make business plans based around strong growth in the short term could be placing themselves in a vulnerable position.
Although there is a strong interest in the potential of mobile solutions, it will take time for enterprises to go through the cycle of interest, to trials and then full-scale deployments. The mobile enterprise solutions market will remain relatively stagnant for the next eighteen months in the core markets of North America and Western Europe.
