OVERVIEW § Mobile represents the next major technology platform shift for businesses. Like the SaaS platform shift, mobile will create tremendous opportunities for enterprise-focused entrepreneurs. § We estimate that mobile enterprise will ultimately represent an annual revenue opportunity for entrepreneurs of at least $100 billion. § This report will review the current state of the enterprise mobile market and will share our predictions as to where this market is headed.
WHY MOBILE MATTERS TO ENTERPRISES
WHAT IS DRIVING GROWTH IN MOBILE ENTERPRISE? 1 WORKERS LOVE IT Nearly half of workers state that their mobile device is very or somewhat important for their work. 4 2 BYOD TAKES HOLD Businesses are increasingly allowing workers to use their own mobile devices for work. 74% of organizations have or plan to have bring-your-own-device (BYOD) policies in place.
DYNAMICS DRIVING MOBILE 3 MORE MONEY FOR MOBILE Enterprise spending on mobility-related technologies is expected to more than double over the next five years. ENTERPRISE GROWTH 4 THERE’S AN APP FOR THAT As mobile budgets grow, entrepreneurs are focusing more on building mobile applications for business. As a result, there are more apps available to solve a wide range of business challenges. SOURCE: Tech Pro Research, Pew Research Center, IDC
WHERE ARE WE TODAY?
MOBILE ECOSYSTEM: APPLICATIONS & ENABLERS APPLICATIONS ENABLERS Native or web-based mobile applications that are: (a) used by Technology solutions businesses and (b) that help mobile valuable to users in large application developers & part because of their do their jobs more mobile functionality. effectively.
These applications may
also have a desktop interface.
MOBILE ENTERPRISE APPLICATIONS § Emergence publishes a landscape of mobile enterprise application companies annually • Our 2015 mobile enterprise landscape includes 313 companies, up from 258 companies in 2014 and 95 companies in 2013. • The landscape is segmented by key application categories, both functional and industry-related. § The landscape is segmented by key application categories, both functional and industry-related.
MOBILE ENTERPRISE APPLICATIONS ACQUIRED LANDSCAPE 2015 EDUCATION HEALTHCARE REAL ESTATE/CONSTRUCT. OTHER VERTICALS KURADO V TRANSPORTATION E R T RESTAURANTS I HOSPITALITY C OrderAhead A RETAIL L BANKING GOVERNMENT MANUFACTURING PRODUCTIVITY CONTENT COMMUNICATION TASK MANAGEMENT & MOBILE FORMS CALENDAR H EVENTS & CONTACTS O R I Z O N SALES, MARKETING & SERVICE ACCOUNTING, FINANCE, IT T A L HR & RECRUITNG BI & ANALYTICS PAYMENTS
MOBILE ENTERPRISE APPS: LANDSCAPE TRENDS § The number of mobile enterprise application companies has grown by 20% in the last year § While this isn’t a high growth rate, it is similar to the early days of SaaS when entrepreneurs were learning to capitalize on a new platform and the pace of company creation was modest. § Industry-focused apps are playing a prominent role § Approximately 1/3 of the companies on the landscape focus on specific industries. This is different from the early days of SaaS when nearly all companies were cross-industry. § Early M&A has centered around productivity apps • Microsoft has played a prominent role having acquired three productivity-focused mobile enterprise companies to date (6Wunderkinder, Sunrise, and Acompli).
EARLY STAGE MOBILE APP FUNDING HAS BEEN INCREASING EVERY YEAR SINCE 2010, GIVING RISE TO A HANDFUL OF LATER STAGE APPS WITH MASSIVE GROWTH ROUNDS EARLY STAGE MOBILE APP FUNDING* LATE STAGE MOBILE APPS (2010-2014) FUNDING* TO-DATE $700,000,000 $600,000,000 WHERE ARE 120 97 99 100 Dropbox $600,000,000 ) D $500,000,000 S (U $400,000,000 aised W 80 55 E TODA Box Y?
$544,000,000 Square $480,500,000 Slack $338,450,000 60 R $300,000,000 Evernote $181,250,000 # of deals ount m ServiceMax $120,000,000 34 40 $200,000,000 Doximity $81,800,000 Total A 20 Airstrip Technologies $65,000,000 20 $100,000,000 $- ‐ 0 2010 2011 2012 2013 2014 SOURCE: Emergence analysis based on Crunchbase data *”Early Stage” is defined as companies that have raised less than $50M total funding; “Late Stage” is defined as companies that have raised more than $50M.
MOBILE ENTERPRISE APPS – TOTAL FUNDING BY CATEGORY EDUCATION HEALTHCARE REAL ESTATE/CONSTRUCT. OTHER VERTICALS V 7 companies TRANSPORTATION E $49M 10 companies R 32 companies T $90M $51M RESTAURANTS I 35 companies HOSPITALITY C 10 companies A $300M 6 companies $140M L MANUFACTURING $20M RETAIL 4 companies BANKING GOVERNMENT 10 companies 1 company 3 companies $30M $9M $8M PRODUCTIVITY CONT WHERE ARE $92M ENT COMMUNICATION TASK MANAGEMENT MOBILE FORMS & CALENDAR 7 companies $25M 19 companies 43 companies 15 companies H O $1,407M $622M $98M EVENTS & CONTACTS R WE TODAY?12 companies I $75M Z O N T SALES, MARKETING & SERVICE ACCOUNTING, FINANCE, IT A L 38 companies 18 companies $216M $108M HR & RECRUITING BI & ANALYTICS PAYMENTS 23 companies 10 companies 15 companies OrderAhead $94M $54M $656M
MOBILE ENTERPRISE APPS: FUNDING TRENDS § Early stage funding is taking off § Annual dollars invested in early stage mobile enterprise app companies has grown at a CAGR of 38% over the last 5 years. § Several late stage breakout companies are emerging § Beyond well-known names such as Box, Square, and Slack, other companies such as Doximity and ServiceMax are approaching “unicorn” status. § Several landscape categories have been particularly appealing to investors • Productivity app companies have been the largest recipients of capital. Payments, healthcare, and sales/marketing have also seen meaningful investor interest.
MOBILE ENTERPRISE ENABLERS § Emergence publishes a landscape of mobile enterprise enabler companies annually • Our first landscape was published this year and includes 220 companies. § The landscape is segmented by problems that application developers are aiming to solve § Sometimes an enabler might help its customers solve multiple problems. In this case, we show the enabler in what we feel is its “primary” problem solving area.
MOBILE ENABLER LANDSCAPE 2015 ACQUIRED USER ACQUISITION ENGAGEMENT MONETIZATION APP DISCOVERY A/B TESTING MARKETING ATTRIBUTION APP LANDING PAGES ANALYTICS MONETIZATION APP STORE OPTIMIZATION NOTIFICATIONS DEEP LINKING APP STORE DATA & RESEAR WHERE ARE W CH E MT OBILE MA FEED OD RKETING AUTOMAT BACK & SUPPORT A ION Y? APPURL Turnpike DEMO TOOLS TELEPHONY PAYMENT EMAIL API LAYER DEVELOPMENT LOCALIZATION MOCKUP/PROTOTYPING APP TESTING Babble-on DEV PLATFORM
APP BUILDER Tapku WireKit
MOBILE ENTERPRISE ENABLERS: LANDSCAPE TRENDS § Judging by the number of companies in each landscape category, user engagement and development efficiency are key pain points in mobile § Over half of the companies on the landscape are focused in these two areas. § Acquisition activity has been heaviest in analytics § Many mobile analytics companies continue to emerge, which may suggest app developers’ analytics needs are still evolving. § The user acquisition and monetization categories are surprisingly uncrowded • These are clearly areas of interest for app developers. Big problem
plus minimal competition could be opportunity for entrepreneurs.
EARLY STAGE MOBILE ENABLERS SAW A STEP FUNCTION INCREASE IN FUNDING FROM 2013 TO 2014, JUST ONE YEAR BEHIND MOBILE APPS EARLY STAGE MOBILE ENABLER FUNDING* LATE STAGE MOBILE ENABLER (2010-2014) FUNDING TO-DATE* $400,000,000 60 $350,000,000 Stripe $190,000,000 48 50 Twilio $99,000,000 ) $300,000,000 D S 38 Optimizely $87,000,000 36 40 (U $250,000,000 Xamarin $82,000,000 31 aised R $200,000,000 30 Applause $80,800,000 # of deals ount Zendesk $79,000,000 m $150,000,000 20 Appcelerator $78,100,000 13 $100,000,000 Total A Mixpanel $76,500,000 10 Quixey $74,200,000 $50,000,000 Tapjoy $51,000,000 $- ‐ 0 2010 2011 2012 2013 2014 SOURCE: Emergence analysis based on Crunchbase data *”Early Stage” is defined as companies that have raised less than $50M total funding; “Late Stage” is defined as companies that have raised more than $50M.
MOBILE ENABLERS 2015 – TOTAL FUNDING BY CATEGORY USER ACQUISITION ENGAGEMENT MONETIZATION APP DISCOVERY A/B TESTING MARKETING ATTRIBUTION 10 companies 4 companies 11 companies $96M $72M $111M APP LANDING PAGES ANALYTICS 32 companies MONETIZATION 8 companies $395M $1M 10 companies $94M NOTIFICATIONS 11 companies APP STORE OPTIMIZATION $80M DEEP LINKING 10 companies 8 companies $82M MOBILE MARKETING AUTOMATION $192M 8 companies APP STORE DATA & RESEARCH $101M DEMO TOOLS 11 companies FEEDBACK & SUPPORT $100M 4 companies 13 companies $1M $107M TELEPHONY PAYMENT EMAIL API LAYER 5 companies
MOBILE ENTERPRISE ENABLERS: FUNDING TRENDS § Early stage funding of mobile enterprise enablers is accelerating § Dollars raised by enablers in 2014 nearly doubled from 2013. § Many of the later-stage enablers service both mobile and web developers § This is unsurprising as many app companies have both mobile and web-based interfaces to their applications. Additionally, many leading enablers that started as web-only have added good mobile capabilities to their offerings. § Analytics, deep linking, and telephony categories have received the most funding • Payments and development platforms have also seen heavy investment.
PREDICTIONS & OPPORTUNITIES
WE PREDICT THREE AREAS OF GROWTH FOR MOBILE ENTERPRISE 1 DESK EXTENSION Continued growth of “horizontal” mobile apps, many focused on productivity improvements. 2 DESKLESS ENTERPRISE 3 GLOBAL MOBILE Expanding use of mobile apps for Adoption of mobile enterprise non-desk workers, with a focus on applications in emerging markets key verticals such as healthcare, that are inherently mobile-first. construction, and field service. These applications will be some of the first business apps used in these markets.
PREDICTION: 1 GROWTH OF DESK EXTENSION APPS KEYS TO SUCCESS * TOTAL RAISED: $3.7 § Leveraging and blending mobile and Continued adoption BILLION web, as the workers that use these apps are deskbound at times and of “horizontal” mobile mobile at others. apps, many focused on § Utilizing mobile native access to email, calendar, and contacts to productivity make integration with key data improvements. Nearly sources easier, while enhancing virality. all of the top 20 most EXAMPLE COMPANIES downloaded apps on our landscape are productivity-oriented. SOURCE: AppAnnie, Emergence analysis
PREDICTION: 2 GROWTH OF DESKLESS ENTERPRISE APPS KEYS TO SUCCESS * TOTAL RAISED: § Deep domain expertise in an industry $855 that is dominated by deskless Expanding use of MILLION workers. mobile apps for non- § Extraordinary focus on simple user experience; Apps for deskless desk workers, with a workers must be easy to use in the focus on key verticals field. such as healthcare, § Robust offline functionality so that the app is functional when online construction, and field access isn’t possible. service. Non-desk EXAMPLE COMPANIES workers represent 80% of the global workforce.
PREDICTION: 3 GROWTH OF ENTERPRISE APP USAGE IN EMERGING ECONOMIES % OF MOBILE ENABLED WORKERS IN 2020 Adoption of mobile enterprise applications in 50% ASIA emerging markets that PACIFIC are inherently mobile- first. These applications will be some of the first 10% LATIN AMERICA business apps used in these markets. 10% MIDDLE EAST + AFRICA SOURCE: Citrix, IDC, Emergence analysis
MOBILE ENTERPRISE OPPORTUNITY: $100+ BILLION 3.0 BILLION $40+ GLOBAL X PER WORKER WORKERS PER YEAR
$100+ BILLION ANNUAL REVENUE OPPORTUNITY
* MOBILE ENTERPRISE REVENUE TODAY: <$500 MILLION * CLOUD REVENUE IN 2005: <$500 MILLION SOURCE: Emergence analysis
SUMMARY § Enterprises are shifting more IT budget to mobile initiatives § In response, a growing number of entrepreneurs are developing mobile enterprise applications that help both desk workers and non-desk workers become more productive § Growth in funding for mobile enterprise applications and mobile enablers is growing rapidly § We are in the early innings of the mobile platform shift in enterprise. Ultimately, the opportunity in mobile enterprise applications is over $100 billion annually.
ABOUT EMERGENCE CAPITAL ABOUT EMERGENCE CAPITAL
@emergencecap Emergence Capital Partners, based in San Mateo, Calif., is the leading venture capital firm focused on early and growth-stage enterprise cloud companies. Its mission is to invest in the cloud visionaries who are building the most important business applications. The firm's investments include companies such as Salesforce.com (CRM), SuccessFactors (acquired by SAP), Veeva Systems (VEEV), Yammer (acquired by Microsoft), and Box. Emergence Capital has $910 million under management. More information on Emergence Capital can be found at http://www.emcap.com.
Published by Kevin Spain, General Partner, Emergence Capital, @kevinspain firstname.lastname@example.org