Bloomberg News

Google’s Android Takes IPhone Battle to Office as SAP Plugs Security Hole

February 28, 2012

Visitors pass an Android operating system advertisement at the Mobile World Congress in Barcelona, Spain, on Monday, Feb. 27, 2012. Photographer: Denis Doyle/Bloomberg

Visitors pass an Android operating system advertisement at the Mobile World Congress in Barcelona, Spain, on Monday, Feb. 27, 2012. Photographer: Denis Doyle/Bloomberg

Google Inc. (GOOG)’s Android, having become the most popular smartphone software among consumers, is set to gain traction with businesses as SAP AG (SAP) and VMWare Inc. (VMW) help iron out security kinks.

Software companies attending the Mobile World Congress in Barcelona this week are displaying solutions designed to prevent corporate data from being compromised when employees use their personal phones for work. Samsung Electronics Co. (005930), the biggest maker of Android phones, says reducing that risk would give it a chance to overtake Apple Inc. (AAPL) in the enterprise business.

“We recognized that we need a new growth agenda for Samsung, which is going to enterprise,” said Bum-coo Cho, who heads Suwon, South Korea-based Samsung’s enterprise business team. “Samsung will put a significant amount of effort into generating business from the enterprise sector.”

Android, released less than four years ago, has since vaulted past Nokia Oyj (NOK1V)’s Symbian and Apple’s iOS in popularity among consumers of smartphones and tablet computers. Yet many businesses are concerned about the security of its open-source software, leaving a market largely untapped by champions of the platform including Samsung, HTC Corp. (2498) and LG Electronics Co. (AAATFZ)

SAP Partnership

About 50 percent of tablets and 30 percent of all smartphones are already used for business purposes, said SAP Chief Information Officer Oliver Bussmann. In Barcelona, SAP unveiled a partnership with Samsung to make Android devices safer to use as corporate tools.

“I currently don’t see anyone on the Android side who’s as far advanced,” Bussmann said in an interview today. “When I see that the number of security functions they have is already as high as Apple’s and growing further, I think they have a real shot at this.”

More companies are evaluating their corporate handset strategy that goes beyond Research in Motion Ltd.’s BlackBerry and the iPhone. Siemens AG (SIE), Europe’s largest engineering company, is considering options for a comprehensive solution on how to integrate not only personal computers, but also devices like smartphones and tablets into the company’s IT landscape, said spokesman Wolfram Trost.

Market Share

“Employees are coming to us with their private devices that they know from home and that they like to use, so we’re looking how we can make that happen,” he said. “It’s not always easy because security requirements need to be fulfilled.”

Android smartphones accounted for 50.9 percent of all smartphone sales to end users last quarter, up from 30.5 percent a year earlier, according to researcher Gartner Inc. Sales of iPhones also rose, while fewer people bought devices running Symbian or BlackBerry.

Enterprises are facing an increasingly technology-savvy staff and calls to let employees use their own personal device for tasks like sending e-mail, working on business presentations or accessing databases. That trend puts additional pressure on Waterloo, Ontario-based RIM (RIMM), which has dominated the market for mobile business devices.

Still, a change may take longer. “There is no way the IT manager of a large investment bank is going to allow you to have such a myriad devices” as those running the Android platform,’’ said Shannon Cross, an analyst at Cross Research in Livingston, New Jersey. “It seems like a nightmare to manage. That’s probably going to be a problem for the foreseeable future.”

IT Virtualization

The key to successfully bringing private devices into a corporate environment is separating the business from the private information that’s on the phone, said Srinivas Krishnamurti, senior director of mobile solutions at VMWare, which specializes in virtualization of corporate IT.

VMWare is working with LG Electronics (066570) and Samsung to produce hardware that enables such differentiation and is in talks with three more Android manufacturers, he said in an interview. The software maker also partnering with operators Telefonica SA (TEF) in Europe and Verizon Wireless in the U.S. to enable separate billing of private and business calls.

“One of the reasons why enterprises have not deployed Android in the enterprise is that a solution like this doesn’t exist,” Krishnamurti said in Barcelona. “Now they say, you guys have addressed a lot of the problems that we’ve had with Android. Now we’re actually going to deploy Android in the enterprise and feel safe and secure.”

Telefonica, Vodafone

Vodafone Group Plc (VOD), the world’s largest mobile operator, plans to use the Cebit technology trade show in Hanover next month to demonstrate its device-management suite as well as a SIM-card software that authenticates a phone’s user and encrypts data and messages, said Jan Geldmacher, who heads the carrier’s German enterprise unit. The encryption works better on Android devices than on iOS because Apple doesn’t let developers fine- tune the operating system for maximum security, he said.

“The security is a bit reduced if the manufacturer doesn’t let us access the system,” he said in an interview. “When I advise a customer and he wants to use an encryption mechanism from our Secure SIM card, and he asks me which phone he’d recommend, I’d say take an Android device.”

SAP, the biggest maker of enterprise-management software, is developing solutions to better identify users who log into the corporate network from their private phone, manage permissions and safeguard data on the phones. Besides Samsung, Walldorf, Germany-based SAP also partners Motorola Mobility Holdings Inc. (MMI) to improve the interaction of SAP’s Sybase Afaria device-management software with the device’s operating system.

“When we talk to customers, most of the time if not all the time they ask, what is the support for Android devices?” said Raj Nathan, head of SAP mobile applications group. “That’s not something they asked two years ago, but they’re asking now. That’s an indication that it’s an important platform for them to consider supporting.”

To contact the reporter on this story: Cornelius Rahn in Barcelona at crahn2@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net


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