IT consumerisation – a new era dawns:A report by CIO Connect Limited

Since the advent of the smartphone in the early 2000’s and the more recent arrival of the tablet computer, the IT industry and the billions of people it serves have been witnessing one of the most profound revolutions since the invention of the silicon chip in 1974 and the launch of the web in 1993. The emerging eras of IT consumerisation, mobility, cloud computing and social networking are combining to transform the way we work, the way we socialise and ultimately the waywe live our lives. In the words of a leading Fortune 1000 CIO ‘IT consumerisation is havinga dramatic effect on everything we do’.

It is with this exciting context in mind that Research In Motion® (RIM) commissioned CIOConnect Limited (“CIO Connect”) to undertake a comprehensive survey of the opinion of a number of CIOs on just how the consumer-led IT revolution is transforming the corporateIT landscape – both within the IT organisation itself and among the IT vendor community.On behalf of CIO Connect, Roger Camrass has conducted numerous face-to-face andhundreds of online discussions with Europe’s leading CIO community. In this report Rogersummarises the opinion of the CIOs questioned on all aspects of IT consumerisation andreviews the implications for key participants – both CIOs and vendors, in this two-trilliondollar industry.

2 IT consumerisation – a new era dawns

IT consumerisation – a new era dawns 3

*1 Results based on the responses of 71 CIOs surveyed on October 3rd 2011

A digital tsunamiThe professional experience of the CIO has been moulded by successive waves of change startingwith the earliest forms of computing in the sixties and seventies. Few, if any, c-Suite executives havebecome more adept at coping with new techniques and fashions associated with new technology –led innovation. But according to the survey, CIOs believe that each new IT wave maybe increasing in size and potential impact.

According to the survey, e-commerce and the introduction of web-based applications representsthe most disruptive influence on IT so far, followed closely by IT consumerisation and cloud – both ofwhich are web-enabled. Each wave represents a game-changing opportunity for IT and business alike.

Figure 1: What are the ‘two biggest changes’ that you have experienced as an IT professional? *1

In 2010 the expenditure on IT outside the enterprise surpassed that of corporate IT. The implications here are profound. Expectations of corporate staff are being conditioned now by fast moving consumer trends and fashions rather than lethargic corporate IT policies. Innovations in the consumer world are in weeks and months rather than years. The gap between what the corporation can provide and what the consumer market offers has reached breaking point. In the words of the CIO of a global oil company, ‘I go back three generations in technology when I reach the office each morning’.

Not only do corporate IT devices appear antiquated and dysfunctional against their consumerequivalents, but the corporate IT services offered are also becoming increasingly cumbersome andirrelevant. As consumers, we have become entirely familiar with a comprehensive set of IT capabilitiesthat have only weak equivalence within the corporate enterprise. For example, nearly a billionconsumers stay in touch via Facebook® and LinkedIn® Services. They have access to infinitely powerful search engines such as Google® and Yahoo!®. And they also benefit from powerful communication tools such as Skype and YouTube®.

The discrepancy between our personal IT and corporate environments has now reached alarmingproportions and CIOs are on the spot to match fast moving consumer trends. The message comingback from the research we have undertaken is loud and clear, in the words of the CIO of a globalIT vendor ‘the boundaries between personal and business computing are blurring fast – employeesshould be able to make their choices in both areas’. IT in the new consumer age will be all aboutfashioning the user experience rather than operating the technology.

The journey to IT consumerismSince the days of the mainframe in the early seventies, IT has long been the exclusive domain ofthe CIO and the associated vendor community. The complexities of the underlying technologiesand the scale of investment involved in hardware and software have discouraged businessunits or individuals within the corporate enterprise to go-it-alone. But in the emerging era of ITconsumerisation, where low cost, attractively styled and comprehensively serviced devices areavailable from the web or local store, everything is changing – and fast.

Our survey reveals that top management, employees and the IT organisation itself are havingan equal influence on the pace of development of IT consumerisation. At least two CEOs oforganisations interviewed (from the telcomms and utility sectors) are committed to running their enterprises from a tablet. Employees are taking matters into their own hands by purchasingsmartphones and tablets well ahead of the IT organisation’s ability to provision such devices andmany CIOs are pursuing a liberalisation policy to maintain some level of influence and control.

Of the organisations interviewed, only seven percent offer entirely free choice over all IT devices, smartphones, tablets and laptops, but thirty six percent support consumer free choice for smartphones and tablet computers. Thirty one percent of the organisations surveyed are running trials incorporating consumer devices currently and fourteen percent have plans to do so. In this respect, the trend towards free choice is unstoppable. In the words of the CIO of a global accounting firm ‘our staff demands choice and convenience. It is now a prerequisite for recruiting and retaining toptalent in our industry ’.

Figure 2: How far advanced is your organisation in the journey to IT Consumerisation?*2

Despite the strong pressures promoting IT consumerisation across the entire spectrum of devices(smartphone, tablet and PC), the CIO community is mindful of the many challenges and obstaclessurrounding wholesale consumerisation. In many senses this is a déjà-vu moment to the daysof distributed processing, when individual business units chose to adopt their own hardware andsoftware. The outcome of that era was deep fragmentation of systems and processes withinbusiness silos that has taken many years and billions of dollars to overcome.

Top of the IT consumerisation list is the technical requirement to support a growing diversity of devices and associated operating platforms such as RIM’s BlackBerry® platform, Apple’s® iOS, Android™ and Microsoft’s® mobile OS. Every organisation interviewed currently supports the RIM platform and some fifty percent have introduced Apple’s iOS to cater for an influx of iPhones and iPads.*3 There is a reluctance to adopt all platforms presently given the high cost of technical support involved.

4 IT consumerisation – a new era dawns

*2 Results based on the responses of 156 CIOs surveyed on 3rd October 2011*3 The CIOs of eighteen organisations were interviewed directly between August and October 2011

Two other primary concerns were raised by CIOs during the survey. One was the security of corporate information and the possibility of data leakage. The second was corporate reputation itself. The extensive use of social media has delivered many benefits to the individual but carries a health warning to many corporations who are concerned about how individual reputations could affect corporate brand. In the words of the CEO of General Electric ‘it took a hundred years to build a global multi-billion dollar brand. It could take a mere hundred seconds to destroy it’. Brand reputation will place increasing responsibility on the individual, as well as the corporation, in the coming years.

Rapid consumerisation of devicesThe introduction of the smartphone into corporate life just over a decade ago heralded the beginning of the new consumer era. At that time the BlackBerry smartphone from RIM was the predominant market leader and has remained so in most organisations – especially those concerned with security such as government, banks and accounting firms. Its early appeal included secure encryption and push email.

Alongside the BlackBerry smartphone, we now see a profusion of smartphones and tablet devicesthat have been inspired by Apple’s iPhone and iPad innovations. The tablet neatly fills the white spacebetween the smartphone and laptop by providing improved customer experience as well as addedconvenience. In the words of the CIO of a leading utility, ‘the PC is living on borrowed time’.

Along with the inevitable attraction of consumer IT devices and the innovative experience that theyevoke; there are some solid business reasons to support rapid liberalisation within the corporation.From the chart below we can see that the two most powerful motivators are employee satisfactionand productivity. Cost remains relatively neutral – especially as additional support is required to copewith the influx of new, commodity devices.

Figure 3: What do you see as the biggest benefit to the organisation of offering employees an open choice of personal device? *4

According to the survey, the timetable for free choice of device varies significantly across largeorganisations. Nearly half the CIOs interviewed provide a limited choice of smartphone – typicallyBlackBerry and iPhone. A further twenty five percent included in the survey offer a limited choiceof laptops and tablets. CIO opinion suggests that, within three years, two thirds of the surveyedorganisations are likely to offer an entirely free choice of all devices, leaving a fifteen to twenty percent hardcore of more strict organisations that will continue to avoid the consumerisation agenda.*5

IT consumerisation – a new era dawns 5

*4 Results based on the responses of 115 CIOs surveyed on 3rd October 2011*5 The CIOs of eighteen organisations were interviewed directly between August and October 2011

The reasons for delaying free choice include security, anticipated problems with device managementand support, and a perceived lack of business need. Given the power and storage capacity of today’s mobile devices such as tablets and smartphones, CIOs and other senior executives are deeplyconcerned about how to protect sensitive corporate information and intellectual property. In the caseof accounting firms and investment banks, the theft of corporate information by an ex-employee cangive grounds for prosecution. In such situations, the organisation needs to preserve the right to wipeclean all corporate data from an individual’s personal computer, phone or tablet.

Various techniques have been adopted to help provide a clear and secure separation of corporateand private data within a mobile device (whose use is both personal and professional). The mostcommon approaches include:

• Virtualisation technology like Citrix® that converts the mobile device into a thin client when accessing corporate applications and associated data. In this case, all intellectual

property is secured within the corporate data centre.

• Embedded software within the device that creates a clear boundary between personal and professional applications, for example, in the case of email services within the BlackBerry smartphone. This approach is often described as sandboxing by CIOs, who are keen to maintain separation of business and personal domains.

However, most CIOs see mobile security as an area of rapid innovation and expect a variety of newentrants in the coming months and years.

6 IT consumerisation – a new era dawns

Who pays – corporate IT or employee?Although the cost of funding desktops and laptops has tumbled dramatically over the last ten years,supporting them hasn’t and can still amount to thousands of pounds per annum – taking into account hardware, software licences and IT support. Given that many of today’s tablets and smartphones embody many of these capabilities at a fraction of the price, we might expect to see costs fall much further as CIOs adopt a consumer approach to device provisioning. The reality is somewhat different, given that employees now expect to carry a multitude of devices – including smartphones, tablets and laptops. They also expect round-the-clock support to mirror their blurring professional and personal lives.

According to our survey results presented below in figure 4, nearly half the organisations surveyedexpect to fund the full cost of all the devices purchased by their employees. Thirty seven percent accept that employees will wish to purchase and own their phones, tablets and laptops in the future, and are planning to provide an IT allowance to staff – subject to tax authority approval.

Figure 4: What is the funding model that your organisation has adopted for IT devices? *6

Many of the service organisations interviewed*7 whose employee population is essentially mobile,have negotiated extremely attractive tariffs with telco providers, as low as ten pounds (sixteen US$) a month. Such tariffs provide a strong incentive to stay on the corporate network. Again some fifty percent of organisations surveyed expect to pay mobile charges directly, with a further twenty five percent providing a co-funding mechanism. Global companies such as Shell, Ford and Coca Cola have extensive private networks to link their staff. Eighty percent of organisations surveyed plan to provide IT support for mobile devices, although half of these intend to place limitations on their employees, for example, only supporting laptops.*7

IT consumerisation – a new era dawns 7

*6 Results based on the responses of 82 CIOs surveyed on 3rd October 2011*7 The CIOs of eighteen organisations were interviewed directly between August and October 2011

Mobility services – a staged developmentFor the ever expanding range of devices working outside the domain of the traditional office desktop, the breadth of services and associated applications is expanding rapidly. According to the CIOs involved in the survey, there appears to be a staged development:

l Connectivity – essentially the focus of first generation smartphones, where the emphasis has been purely on communications. Functions such as push email, instant messaging, contacts and calendar have helped drive device sales and expanded use. Video conferencing and services like WebEx are now beginning to take-off via tablets and mobile laptops.

l Productivity – with the adoption of web browsing features and tablet devices, the focus is now shifting towards workflow applications based around enterprise resource planning (ERP),

business intelligence (BI), customer relationship management (CRM) and line-of-business apps. Mobile employees can perform a growing range of tasks outside the office – making use of dead time or improving field productivity.

l Collaboration – the emerging emphasis is on knowledge and document sharing as well as team collaboration between mobile workers, enabled by social networking and collaboration tools. This approach has particular appeal for professional service organisations where employees work in virtual teams across the globe.

The range of functionality currently available in the mobile space is summarised in the table below

Figure 5: What range of IT services do your smartphones and tablets have access to? *8

Access to enterprise applications is limited today by the inability of many backend systems, like ERP, to provide a web interface. Forty eight percent of the organisations surveyed employ a thin client or dumb terminal interface via the mobile device (phone or tablet) into their ERP applications. Only thirty one percent of the organisations surveyed are able to provide a web browser interface*9. One CIO commented that ‘the Return on Investment associated with converting our ERP systems to a web environment is an exercise in pure fantasy’.

8 IT consumerisation – a new era dawns

*8 Results based on the responses of 75 CIOs surveyed on 3rd October 2011*9 The CIOs of eighteen organisations were interviewed directly between August and October 2011

A roadmap towards consumerisationFrom our numerous CIO interviews, we detect a clear and well staged progression towards full consumerisation. The corporate roadmap towards complete liberalisation of device policy, combined with the associated full range of mobility services, is likely to follow the pattern below in CIO Connect’s opinion:

l Stage one: escaping from full lock down – Employees are provided with smartphones to send and receive email but have little choice over devices or other services. Government is a case

in point here, along with some traditional manufacturing and distribution companies.

l Stage two: virtual desktop – The range of user choice widens to include a limited range of tablets and laptops that can receive the full complement of corporate IT services on the move, such as productivity tools and information sharing. Such practice has become widespread amongst global companies, including Ford and Shell.

l Stage three: open world – Here the employee is given an IT allowance and can purchase any combination of devices and services that appeal to his or her individual life style and professional specialism. This approach is being adopted primarily within the IT sector itself and by leading edge companies such as IBM®, KCOM and Colt, as well as professional service firms.

Figure 6: Three progressive stages towards full IT Consumerisation

The timescale for the emergence of the open world scenario will depend on a number of factorssuch as the ratio of mobile workers to office based staff, and the sensitivity of corporate information.However, the CIOs were largely unanimous in their desire to reach this end point over the next three tofive years. Much activity is in place to prepare the ground for such an eventuality, including pilot trialsand modifications to corporate IT applications to suit a web browser environment.

One interesting case study emerged from discussions with a global engineering company. Given thehigh ratio of field to office staff (in excess of seventy percent), and the broad geographic dispersionof these staff, the CIO is creating a private applications store within the major data centres andhas equipped field staff with tablets to access this resource. In the words of the CIO of this globalengineering company, ‘the impact on field staff productivity and motivation has been spectacular.Employees are sharing their applications across geographies in a way that would not have beenimaginable even five years ago’.

IT consumerisation – a new era dawns 9

Consequences for IT governanceThe joint advent of IT consumerisation and cloud computing over the last five years has prompteda radical rethink of IT strategy amongst the large majority of CIOs interviewed in the survey.Much effort has been focused on the virtualisation of corporate IT infrastructures to make wayfor consumer devices. However, with much of this work now at execution stage, emphasis ismoving rapidly towards applications and the era of software as a service.

Given the anticipated acceleration of IT consumerisation over the next five years, and an extensionfrom laptops to smartphones and tablets, CIOs are virtualising the current desktop infrastructure to accommodate a wide diversity of devices. Most organisations are likely to maintain corporate networks as the primary mechanism to interconnect these devices and to provide effectivegateways to central computing resources. However, the overall consequence for IT infrastructureis a general retreat away from the end user device towards the corporate data centre, where theperiphery can be adequately secured and its information assets protected.

In this new world, the data centre itself will assume a new dimension of importance. Much of theprocessing and storage hardware will be virtualised and transitioned towards multi-tenant serviceswhere IT vendors will host and operate server farms on behalf of their major clients. This approachis frequently referred to as a hybrid cloud, where computing power and storage capacity is offeredas a utility or pay as you go service. The primary function of the virtual data centre will focus onthe critical information assets that it provides to mobile employees. In this respect, CIOs frequentlyrefer to the data centre of the future as the information hub of the corporation.

Having converted the IT infrastructure into a computer utility that can flex with changing demand,the next stage of development will be to migrate corporate applications into a private apps storeaccessed by a standard web browser from any type of smart device – phone, laptop or tablet.Such private apps stores will be based within the virtualised corporate data centre or information hub.

Access will also be provided to a broader range of publicly available applications via software as a service offerings that become available on the web. This approach will provide the workforce with an almost unlimited choice of applications, on an as-needed or pay as you go basis. In the words of one Fortune 1000 CIO ‘all you will need in the future is a tablet, 3G connection and an American Express card’.

With the task of operating a large and complex IT system largely delegated to enterprise-readycloud providers, and a near infinite supply of software sourced from the web, the CIO will beginto focus on future sources of business value rather than operational performance. The areas ofhighest interest to the CIO population included in the survey are:

l Future of work – How the future population of largely mobile workers will function within the office as well as in social and domestic work spaces. Some CIOs are helping their organisations to trial new ways of working in flexible office environments. They are also endeavouring to equip home workers with an equivalent quality of service to the office.

l Electronic channels – How digital communication might evolve between businesses and their customers, both business and domestic, with the extensive use of the web and consumer devices. For example, multi-channel retailing is evolving rapidly and making new demands on corporate IT capabilities.

l Blurring of personal and business boundaries – Fashioning the workspace, both physical and electronic, to enable staff to access their corporate and personal media in a way that secures corporate information and protects personal privacy. A range of new software techniques are emerging to assist in this endeavour.

10 IT consumerisation – a new era dawns

Implications for the IT vendor communityThe combination of IT consumerisation, cloud computing and mobility is a once-in-a-decade game changer for the IT sector, leaving the key players in a state of confusion. Many of the CIOs that were interviewed during the study voiced concern about how the major IT vendors seemed unable to grasp the cloud opportunity. Few, if any, could articulate clearly their cloud propositions to the CIO audience, despite the obvious need to move forward in this area in the face of strong market demand. In the words of one CIO , ‘IT consumerisation is here and now; cloud is pure vapourware’.

As the old guard of hardware IT vendors attempt to mobilise their disparate forces for the newcloud era, software vendors remain paranoiac about protecting their lucrative licences. CIOs eagerlyawait the advent of software as a service, believing that this method will prompt new suppliers tocannibalise traditional monopolies and thereby transform operating costs. Against this background,the new age vendors born out of the consumer world such as eBay®, Amazon® and Google appearunencumbered by corporate IT legacies and keen to seize the upper ground. However, few if anyof the companies mentioned above really want to comprehend the complex workings of the largecorporates and as such remain unable or unwilling to cross the great divide between consumer andinstitutional IT.

Even the telecommunication providers who have enjoyed enormous growth and profitability fromthe effects of IT consumerisation seem unable to escape from the trap of selling voice and data rather than value-added business services. Perhaps the success of the current business model is a blind spot for more aggressive service innovation?

Speaking with the European CIO community over the last six months, the critical success factors for the emerging generation of IT vendors are, in CIO Connect’s opinion likely to be:

l Strong alignment with the consumer agenda – Providing the appropriate hardware and software to enhance the user experience in a way that RIM and Apple have achieved over the last ten years.

l Familiarity with the corporate IT environment – Enabling new devices and services to work seamlessly and securely into complex and frequently outmoded corporate IT systems where web penetration remains relatively thin.

l Innovation partners – Willing to provoke new thinking at the business level around digital channels and new ways of working. This approach will require empathy both with business and IT executives

The content of this report is provided “as-is” without warranty or representation of any kind. The views and opinions expressed in

this report are those of the individual author and not those of Research In Motion Limited and/or its affiliates. The author was paid by

Research In Motion UK Limited to complete the study and prepare this report.

©2012 Research In Motion Limited. All rights reserved. BlackBerry®, RIM®, Research In Motion® and related trademarks, names and

logos are the property of Research In Motion Limited and are registered and/or used in the U.S. and countries around the world.

Amazon is a trademark of Amazon.com, Inc. or its affiliates. Android is a trademark of Google Inc.

Apple is a trademark of Apple Inc. Citrix is a trademark of Citrix Systems, Inc.

eBay is a trademark of eBay Inc. Facebook is a trademark of Facebook, Inc.

Google is a trademark of Google Inc. IBM is a trademark of International Business Machines Corporation.

LinkedIn is a trademark of LinkedIn Corporation. Microsoft is a trademark of Microsoft Corporation.

Yahoo! is a trademark of Yahoo! Inc. YouTube is a trademark of Google Inc.

All other trademarks are the property of their respective owners

IT consumerisation – a new era dawns 11

CIO Connect Ltd

15th Floor 76 Shoe Lane London EC4A 3JB

T: +44 (0) 20 7842 7999 F: + 44 (0) 20 7842 7998

W: www.cio-connect.com E: info@cio-connect.com