1. Businesses are shifting towards an app-only model: Mitesh Agarwal, Oracle India

Businesses are shifting towards an app-only model: Mitesh Agarwal, Oracle India

The global mobile application markets is expected to reach US$ 54.89 billion by 2020, growing at a CAGR of 16.2 percent from 2014 to 2020.

By: | New Delhi | Updated: September 4, 2015 3:32 PM
Mitesh agarwal

The global mobile application markets is expected to reach US$ 54.89 billion by 2020, growing at a CAGR of 16.2 percent from 2014 to 2020.

The global mobile application markets is expected to reach US$ 54.89 billion by 2020, growing at a CAGR of 16.2 percent from 2014 to 2020. The fastest growth will come from the Asia pacific regions especially India and China. In an interview with Ankush Kumar, Oracle India’s Vice President Sales Consulting & CTO Mitesh Agarwal shares his insights on Mobile application market and how businesses are gaining significant traction across key verticals.

What is forcing businesses in India to invest in mobile app platforms ?

Smartphone adoption in India is growing at an unprecedented rate and according to industry research over nine billion apps will be downloaded in the country this year. This is five times more than the apps downloaded in 2012. Revenues from paid apps is expected to touch 15 billion rupees this year with the expansion of 3G and 4G networks as well as decreased cost of data usage in India. In fact a recent study by Oracle on App usage globally found that the age group that is arguably most plugged into the era of connected devices and driving this growth in the app economy is the so-called millennial generation. Our research found that 85 percent of people aged 18 to 34 own a smartphone and prefer to use it over traditional computers. As a result mobile commerce market is now growing three times as quickly as the traditional e-commerce market, forcing businesses to invest in mobile app platforms to survive.

What are the major factors that have contributed to this growth ?

According to an industry study the number of mobile internet users in India is expected to reach 213 million by June 2015. That is the potential consumer base for an e-commerce company to tap if they have a good mobile application. Mobile internet penetration is growing at a faster pace than broadband paving way for m-commerce to overtake e-commerce. A BCG study highlights that the last 100 million internet users will be drastically different from the first 100. The group will shift from being 60 percent mobile led to 80 percent mobile led. The number clearly is still high and in this light the writing is on the wall for businesses – mobile is the best way to reach consumers anytime, anywhere. The second reason for wanting to shift an app only model is to reduce operational expenses. There is stiff competition in the industry and e-commerce players are stretched thin to stay profitable. They don’t want to function on multiple platforms and apps offer an opportunity to have a leaner operational model. Besides, with a mobile app, a seller can interact closer with the customer and offer a personalised shopping cart. Apps also enable companies to advertise and market to customers more accurately than websites, collect more detailed user data and potentially increase customer loyalty.

What are the latest trends in this market which can be termed as the future growth drivers?

According to the United Nations, six of the seven billion people worldwide now have mobile phones. Workers and customers alike are untethered, which is enabling new business models and transforming industries. Look at Uber, SnapChat, or even Facebook, where 400 million of their users log in only with their mobile devices. In other words, mobility is now becoming the primary way for consumers to interact with a brand and get things done. To adapt to this changing paradigm, businesses are adopting a ‘Mobile-First’ strategy. They are making mobility a core part of their business, and the primary channel by which they engage with customers. In fact according to Forbes, mobile app development projects will outnumber native PC projects by a ratio of 4:1 by 2015.

In many cases the drive towards mobility is also being driven from within the organisation, as innovative users and line of business managers accelerate the need for a mobile strategy. Line-of-business users want to be able to extend their enterprise applications to mobile devices because keeping the workforce connected empowers everyone to make decisions, take action, and stay informed. IT developers and architects want to be able to extend their current skill sets and tools to embrace mobile paradigms, develop new types of mobile apps, and spearhead strategic, innovative endeavours for the enterprise. What we are seeing is that Mobility is taking the same trajectory as that taken by the Web when it came into being. Today nobody questions the need for a web presence. Similarly time has come when it is imperative to have a mobile presence for all applications and services

What kinds of challenges are being faced by the app developers in India?

Customers equate the experience they get via a mobile or tablet app with the quality of the brand behind it. The design, functionality, performance, and security of apps today have become the new weapons in the battle to attract and retain customers, and businesses that do not arm themselves appropriately have little chance of coming out on top. Poor app performance and speed are clearly deal-breakers for a company when it comes to their apps. While some businesses would argue that part of this lies out of their hands – as the strength of data networks is of course not their responsibility in most cases – it will fall to them to develop apps that fulfill customers requirements for functionality without being so clunky as to always require above average network connectivity to work. This may extend to providing users with some offline functionality or background synchronisation options in instances when network performance is lacking.

Developers must also consider the impact of mobile traffic and load on back-end systems that weren’t originally designed for mobile apps. Ideally mobile integration should be an extension of the service oriented architecture (SOA) that is already in place in an enterprise. This will help bring down cost and provide greater agility to business application. And then there’s the cloud; by abstracting back-end functions in the cloud, businesses can free up their resources to simultaneously focus on front-end development and develop strong mobile business models.

Another major challenge revolves around ensuring data security. With people accessing information and sharing personal details rather indiscriminately today via smartphones, tablets, and their personal computers, companies will need to take proactive measures to protect their data. No longer will simple encryption, firewalls, and network security controls alone do the trick. Companies will need to control access from the inside out and at every layer of their IT, from the database that processes data to the mobile devices tied to the system.

What are the most lucrative segments/ verticals for mobile application companies?

Today mobile apps have become must-haves for every modern business and organisation that aspire to productively engage with their employee or reach and attract customers. While retail especially e-commerce and the banking have been at the fore-front of capitalising from the burgeoning app economy, sectors like manufacturing, airlines, healthcare and government are joining the band-wagon. The adoption of mobile apps is pervasive across every segment and vertical today.

How are these mobile applications being used by various enterprises across India?

In addition to offering people innovative services, mobile apps now serve as one of the most important extensions of business when it comes to engaging with customers. By creating a mobile version of their website or more importantly an app, a business today is able to take information or a product right into the hands of the customers anywhere, anytime. Apps can be used to send targeted push notifications to anyone who has installed the App. These messages cannot be missed, since they remain on the display of the phone until the user clicks it away. Using geo-fencing, marketers can also send location / store specific offers when the customer is in the vicinity of an outlet to drive them to check into the store. These kind of direct access to customers was not possible earlier.

In the retail sector, businesses are using mobile Point of Sale (PoS) solutions, to improve in-store efficiency and customer experience. Using a mobile phone or a tablet, a sales associate can inform customers about the best discount, availability of stock, comparison with completion products, etc. It’s about increasing basket size because the associate is connecting with the customer during the most critical part of the decision-making process – on the floor. POS mobility solutions currently available are also significantly lower cost than the traditional POS. It also helps improve the customer’s experience by delivering a simpler and faster checkout.

How is the mobile app market across the globe growing?

According to industry research the global mobile application markets is expected to reach US$ 54.89 billion by 2020, growing at a CAGR of 16.2 percent from 2014 to 2020. The fastest growth will come from the Asia pacific regions especially India and China as these two countries are witnessing the fastest adoption of smart phones and growth in mobile internet. The growth is also pegged by a growing developer community and demand from consumers to have a mobile front for enterprise applications to do business and at work place.

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