The consumer app boom was loud, but the enterprise echo will be louder

It’s no secret that explosive adoption of “smart” mobile devices is wreaking havoc on the strategic technology roadmaps of half the Fortune 500.

Companies that were just beginning to grok the impacts of Social, Cloud + Big Data now have yet another vector of disruption to worry about, and it’s moving faster than all the others combined.

To date, the shift from PCs to mobile devices has mostly been felt at the application (or “app”) layer. 

Fred Wilson called attention to this shift in 2010 with his “Mobile First Web Second” post (with a follow up earlier this year) — predicting that native mobile apps were likely to replace the open web as the single most important vector of customer engagement.

If anything, Fred understated the case. Just five years in, the shift of end-user attention to “always on” mobile devices has turned Apple into the most valuable company in the world and effectively destroyed RIM, the formerly undisputed global leader in enterprise mobile communications.

And we’re just getting started.

For anyone who wasn’t paying attention, Facebook’s $1B purchase of Instagram was a wake-up call on just how threatening the shift to mobile is reckoned to be

Unlike many big tech acquisitions, this wasn’t a panicky hail-mary from a laggard incumbent but an aggressive and forward-looking move by one of the most agile and innovative tech companies in the world.

Even more than Social and Cloud, Mobile is threatening to incumbent firms because it is so rapidly becoming the primary “pane of glass” through which their customers experience their brand and services. Not only do brands now have to show up on at least the two leading platforms (iOS and Android), they have to bring their best game to the party or risk being replaced by other, better apps that sit right next to them in the App Store.

They may not all be able to match Facebook’s decisive action — or massive capital outlay — but enterprises across nearly every sector of the economy are now making big strategic commitments to the “app economy” as a simple matter of survival.

From an enterprise perspective, the first few steps in this shift from web to native mobile were challenging but straightforward: the hardest parts were rounding up skilled mobile tech talent to work on their apps, and dealing with the annoyances of having an App Store sit between them and their customers.

Firms that made this commitment early and leaned in hard could congratulate themselves for outmaneuvering their slower and less tech-savvy competitors. As time spent in mobile apps surpassed web usage, mobile early adopters reaped the rewards of leadership.

But the mobile app boom has an echo, and it promises to be much more taxing to enterprise adopters than the first leg of their mobile journey.

As it turns out, embracing “Mobile First Web Second” requires organizational commitments that run much deeper than just shipping an app. And much of the rich ecosystem of tools and best practices that evolved around “Web First” businesses don’t translate so well to to the new realities of “Mobile First”.

Here’s just a partial list of the “Web First” business domains that need to be retooled — or entirely reconsidered — for a “Mobile First” world:

  • Customer Research — Mobile customers discover and engage with mobile services in significantly different ways than Web-based ones; e.g, more frequent but briefer sessions, across a much broader range of contexts and locations. Understanding these differences is critical to effective product management, especially given the new frictions that mobile adds to both product development and distribution (see below).
  • Product Planning — The narrow constraints of App Store discovery and distribution make category selection, competitive positioning and differentiation much more challenging than on the the more diffuse and unstructured Web. Understanding the range of existing app competitors in a segment, identifying “white space” for new releases and designing products that can occupy unique and defensible positions in the app marketplaces is a new and complex puzzle.
  • Competitive Analysis — App Stores deliberately “flatten” vectors for competitive differentiation in the name of uniformity + consistency for end-users. This tends to weaken traditional brand and distribution advantages held by incumbents and increase the risk and velocity of new competitive challenges, requiring a much more vigilant and sustained competitive stance.
  • Pricing Strategy — Even for enterprise players, end-user price expectations for mobile services are shaped by the blurred personal / professional relationship most users have with their mobile devices. Paid software is at a distinct disadvantage, while “free-to-play” approaches with more oblique monetization strategies are (currently) more successful.
  • Product Development — Beyond the specialized development and design skills required to ship customer-delighting software, platform and device fragmentation, lengthy app approval processes and weak (or at least nascent) user instrumentation capabilities all conspire to lengthen product development cycles and reduce the quality + quantity of intelligence that can be gathered to fuel ongoing enhancements.
  • Testing — Not only do app publishers need to support multiple mobile platforms, but (especially in Android-land) they also need to accomodate an exploding range of OS levels, device types, screen sizes and OEM peculiarities. So the “same” piece of software needs to be tested and optimized for a dizzying array of different scenarios.
  • Marketing — Over the past 10+ years the web marketing environment had accumulated a rich set of tools, platforms and analytics that enabled skilled marketers to acquire customers cost-effectively at scale. Mobile has dragged the state of digital marketing art back into the stone age, with broken conversion funnels, opaque App Store search + discovery regimes and rudimentary analytics tools.
  • Distribution — As with Marketing, Web-based distribution has enjoyed 10+ years of rich evolution, with links and tracking codes emerging as the common currency: think SEO, SEM, affiliate programs, email, newsletters, channel sales, syndication, etc. The App Stores’ stranglehold on mobile app distribution has wiped out a decade of innovation, and mobile-centric distribution innovation is desperately needed to shift control back toward publishers.
  • Customer Engagement — Customers have their mobile devices with them all the time, and refer to them constantly throughout the day: in theory, the potential for high-frequency customer engagement on mobile has never been higher. But massive customer enthusiasm for apps means that yours will most likely get lost in a sea of similar rectangular icons. Taking advantage of the mobile engagement opportunity without burning your precious customer relationships is a new and valuable problem.
  • Customer Support — Customers now turn to their mobile device first to solve problems. But when their problem is with your business, the native mobile environment limits your options for constructive customer interaction, and sits uncomfortably outside with your existing customer support or CRM infrastructure.
  • Analytics + Business Intelligence — Digital innovation has enabled businesses to instrument nearly every facet of their operations, creating massive data exhausts that can be mined for insights about opportunities to boost performance, shave costs and extend competitive advantage. Mobile creates the possibility of extending that instrumentation and insight opportunity all the way out to the end-user in near real-time, but with huge attendant security, privacy and data management hurdles that dwarf anything we’ve seen on the Web.

I could go on and on, but the relevant point for entrepreneurs and investors is that a huge opportunity is just now opening up to help enterprise customers fully operationalize their mobile commitments. There is no longer any debate in the executive suite about whether these firms have to embrace mobile; now they just need help — a *lot* of help, across nearly every major enterprise function — to make it so.

As with the first mobile boom, this one will go faster than anyone expects. Let’s get busy folks!