MDM: Tech Titans, Startups, and Competitive Intelligence

Large tech companies are constantly looking to expand their market reach. But in a space where innovation and new market openings are often driven by off-the-radar startups, how can the big players effectively protect their interests? One way is to employ the use of a targeted competitive intelligence (CI) monitoring program.

Take the rapidly growing Mobile Device Management (MDM) market. Fueled by growing concerns over data security and trends like BYOD, the MDM product set is expanding even further into full enterprise mobility management (EMM), with early MDM leaders enjoying the benefits of first-mover advantage. While large players like Verizon and Samsung are clearly investing in the space, much of the innovation is coming from the smaller players that can quickly response to a marketplace that is still defining itself.

It’s only natural for a large, established company to use CI to look across at similar companies as their main competitors. Global tech giants often focus their CI on what their direct competitors are doing. But the smaller players are more likely to be early leaders in the next waves of market growth. The big company that’s first to respond effectively – whether by acquisition, product development, messaging, or pricing – is also most likely to be the first to ride the wave and gain a competitive edge when the new market comes to maturity. The established tech company should really be using CI to help it face two threats: one from the next startup that pioneers a new product category, and the other from the direct competitor that, if it doesn’t act first, will run away with a huge advantage by capitalizing on the new category.

VCs are actively investing in MDM because they know that a well-funded startup will have several advantages in developing new technologies: startups are small enough to quickly respond to opportunities and are usually totally focused on one area and thus foster an environment primed for innovation. Furthermore, they frequently find a natural customer base in small- and medium-size businesses that have long been of secondary concern to the tech behemoths. The startup can develop the product until it is ready to penetrate the enterprise market, at which point it can cause a lot of pain for the larger, more established players. Frequently a startup has already seized a leading position before the big players can gather their troops and put out a viable product. However, good competitive intelligence can alert a company before a startup gets too far to catch up, or before a larger, direct competitor seizes on the new opportunity.

A prime example of how a small company can run away with market share, and how a larger company can respond, is with Airwatch. Airwatch’s business originally focused on wireless hotspot management, but being a small, nimble company, it found itself at the right place at the right time and quickly changed direction to take a leading position in MDM just as the market was poised to explode. After a 2010 meeting with Apple, Airwatch turned on a dime and threw all of its resources into developing an MDM product that fully integrated with Apple’s iOS. Then Airwatch went on a tear: within a year it had grown from 30 to 400 employees and added 1,000 new customers. By selling to companies of all sizes, after another year it tripled its customer base and had won the business of seven of the top ten U.S. retailers. Airwatch was so successful that it had funded this explosive growth with its own cash until 2013, when it received $200M in Series A financing. Airwatch then took advantage of being early to develop MDM and related products and expanded its offerings into a comprehensive EMM – as it continued to aggressively grow its list of customers. Meanwhile, VMware was seeing lots of lost deals in MDM, and conducted win/loss analysis to find out why. The company got its answer when they heard from the field that the vast majority of deals it lost were won by one competitor – Airwatch. So VMware acquired Airwatch in February 2014 for $1.5B.

To respond to emerging startups in new product categories, the major players have to get this kind of insight to understand the threats they face. By keeping the scope of CI open to include startups and smaller competitors, large tech companies can ensure that they have workable market strategies ready to launch once a new product category reaches critical mass.