What do CIOs talk about when they gather in private to discuss enterprise mobility? Consumerization of IT comes...
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up -- the employee push to use consumer-grade technology is unstoppable. Security concerns are raised, certainly. But the main topic CIOs dish about? Money.
That was the case when more than 100 CIOs and IT professionals met recently at the Gartner Symposium/ITxpo for what was billed as a CIO Town Hall "exclusive event." No names asked, and plenty of information spilled. Among them:
A CIO at a large defense contractor wanted to hear how other CIOs were handling Microsoft licensing costs for their mobile device users. As employees accumulate devices, were organizations paying to license the human or the machine?
Another CIO in charge of global IT at a financial services company asked if anyone had calculated the feasibility of a bring-your-own-device (BYOD) policy in Asia, where base salaries are substantially lower than here?
An IT executive from Vanderbilt University was under pressure to provide employees with stipends to buy their own devices rather than issue company-owned devices. Had anyone done a financial comparison? Sure, BYOD might cut down on the capital expense of providing company-liable devices, but what about the cost to support them?
Mobile computing minutes cost money
The CIO preoccupation with cost doesn't surprise analyst Brownlee Thomas, who covers enterprise mobility at Cambridge, Mass.-based Forrester Research Inc. Thomas estimates that of the 80 inquiries she fields per quarter, 75% are pleas to get a handle on mobility costs. "Their pain is that they know there is this tsunami of mobile data usage that is coming. They know employees will have multiple devices. And they know that if they don't have a mobile policy in place, or have an existing policy that is too generous, it is really painful to get people to change their behavior."
Montgomery County mobile phone analysis
An IT executive from Montgomery County, Maryland directed CIOs to the county's "intense mobile phone analysis” available online. The executive evaluated devices and contracts as a prelude to advising county directors on how to manage cell phones.
For the 30% of employees who used fewer than 100 minutes a month, a pay-as-you-go plan made the most financial sense, he said. Employees who had data and voice plans for regular cell phones were advised to get smartphones, which were no more expensive.
Moreover, with the addition of MiFi on phones, the IT department will no longer issue an aircard or let employees buy an iPad with 3G. Instead, IT required employees to use MiFi-enabled phones to gain access to their multiple devices. As a result, IT got rid of about 1,500 phones and with MiFi will save an additional $400,000 per year, he said. -- L.T.
International data roaming is the single biggest pain point for her clients, Thomas said. The second is having a mobile policy designed for the era of cellular phones rather than smartphones. Factor in executives who travel with their iPads plus iPhones plus laptops and the costs can be, well obscene. "I had one client roaming from the U.S. into Canada and the bill came to $50,000 -- one person, one trip. Another executive spends $27,000 Euros a month because of international roaming,” she said.
The pain and confusion over enterprise mobility will increase before it subsides, cautioned Gartner analyst Nick Jones, who moderated the mobility Town Hall for the Stamford, Conn.-based consultancy. "We are just in the beginning of enterprise mobility and BYOD," he said.
The CIO at a Boston-based financial services company gave voice to the confusion felt by many in the audience. His firm had recently tested the costs associated with employee-owned versus company-owned devices used by its 150 employees. "We found that when you leave people to their own devices, they rack up very large personal bills and try to bring them back to the company," he said. As a result, the firm is using telecom expense management (TEM) to adjust its collective mobile plans and chose not to move to BYOD. The company plans to put mobile device management (MDM) software on company issued mobile devices to control usage, but will reimburse the majority of costs. "We are telling employees that it is the price you have to pay for getting all these cool new devices." But was that the right approach?
An IT executive from the Federal Aviation Administration weighed in. The agency gives its employees the ability to obtain a set number of approved devices from its catalog. "We have done a minutes deal and aggregated all the minutes across the company into this one huge pool. Then we look at how people are using [the minutes] and adjust the plans accordingly," he said. "It has saved us millions of dollars and nobody, at least in my experience, ever blows through their minutes' limit." Employees use the plan for personal and business calls, and the plan also includes data, he said.
Enterprise mobility licenses cost money, too
A CIO at a defense contracting company had intended to leverage desktop virtualization to provide remote access for mobile devices. "But then we had to stop because of Microsoft licenses coming in at a high price," he said. Were the licensing costs for enterprise mobility a problem for anyone else in the room?
Gartner's Jones called licensing a "scary" issue. "If we are going to have three times as many endpoint devices, does that mean Microsoft will come to us and say, 'By the way, give us another $1 million?'"
A CIO from a not-for-profit health care organization found that to be exactly the case. "We went through the Microsoft licensing issue this past summer and did spend $1.4 million enterprise-wide to flip from the license-the-device concept, which is pretty traditional for Microsoft, to license-the-human. So, no matter how many devices a person has -- and we're right at about three per person -- we’re covered by the license," he said.
More mobility resources
A CIO of a public school district in Oregon piped up next on licensing. In his experience, Microsoft really does not want to lose customers to Google. Deals can be cut. "They will do just about whatever it takes to ensure that they keep you as a customer," he said. His school district negotiated a campus agreement that required it to buy licenses for just full-time employees.
According to Microsoft licensing expert Paul DeGroot, however, CIOs in the for-profit world should not count on that type of licensing deal. Educational organizations get inexpensive pricing to license Microsoft software. "They are not in the same boat as commercial contractees," said DeGroot, principal consultant at Camano Island, Wash.-based Pica Communications LLC.
Mobile devices multiply
One CIO flatly said he has no idea how to balance keeping employees happy with the business issues of managing and controlling costs. Mobile devices, in his experience, haven't yet eliminated any technology he provisions; they have just added complexity.
CIOs can expect to be perplexed for the foreseeable future. According to Gartner, the mobile/wireless market will remain "confused and complex" through 2015. During the next four years, large numbers of mobile devices and applications will emerge. Cellular technology, already a standard feature in cars, will find its way into many other products. The CIO who complained that tablets simply added to, rather than replaced, the technology in an employee's arsenal, is correct -- at least in the near term. Gartner advised CIOs to plan for less than 20% of employees being able to replace a laptop with a tablet through 2012.
Let us know what you think about the story; email Linda Tucci, Senior News Writer.