Thursday, September 16, 2010

My Advice to Mobile Applications Vendors, Part 5

This is part 5 of this article series.

As an enterprise mobility vendor you need to recognize where your intellectual property is and where it will be developed in the future.  This can significantly impact your potential value.  Let me provide a scenario for your consideration.

An enterprise mobility vendor develops a MEAP (mobile enterprise application platform) that includes an SDK (software development kit).  They want every software developer in the world to use their platform and SDK.  They believe this will drive revenue from many different channels and allow them to enter new markets through these developers which will keep their cost of sales and marketing low.  They can see the money train coming down the tracks.

The first part of their strategy works.  They get their generic MEAP and SDK into the hands of many developers.  The developers use the SDK to develop very interesting and complex mobile applications for many different markets.  The mobile applications are branded by the developer.  The developers start creating a customer base and developing their brand. 
However, once the developers' businesses grow large enough, they decide they can replace your MEAP and any licensing commitments with their own technology so they can keep more of the revenue.  You lose the market, the revenue, and the sales channel.  Their customers don't know the difference since the finished mobile application looks the same.

The MEAP vendor is in trouble.  Their business plan predicted they would grow at the same rate as their customers.  They failed to anticipate they would only be an interim solution.

The MEAP vendor also thought they would own the code generated by their SDK and MEAP, and it would increase the value of their company.  However, the software developers quickly begin to resist this notion as they also wanted to build their own IP library and company's value.

Who owns the IP (intellectual property) for the mobile applications developed on the MEAP and the SDK?  If your contract says the MEAP/SDK author owns all code developed on it, you will get few developers to use it.  The MEAP author wants the MEAP to lock in or tie developers to them.  However, developers only brand and promote the finished mobile application.  They don't want to promote your SDK or MEAP, only their branded apps.

The MEAP vendor wants to increase their IP and the value of their company.  However, the more IP the MEAP vendor provides, the less opportunity there is for developers to build their own IP library and company value by utilizing it.

While the MEAP and SDK vendor's business plan calls for them to become increasingly valuable to their users, they are in fact increasingly competing with their customer base.  How do you see reconciling this challenge?

I look forward to your thoughts and comments.

If you would like to discuss this subject or my consulting services in more detail please contact me.

Stay tuned for part 6 in this article series.

My Advice to Mobile Applications Vendors, Part 1
My Advice to Mobile Applications Vendors, Part 2
My Advice to Mobile Applications Vendors, Part 3
My Advice to Mobile Applications Vendors, Part 4

Kevin Benedict, SAP Mentor, SAP Top Contributor, Mobile and M2M Industry Analyst
Phone +1 208-991-4410
Follow me on Twitter @krbenedict
Join SAP Enterprise Mobility on Linkedin:

Full Disclosure: I am an independent mobility consultant, mobility analyst, writer and Web 2.0 marketing professional. I work with and have worked with many of the companies mentioned in my articles.