Forrester recently released a new report, Mobile App Internet Recasts The Software And Services Landscape: App Innovation On Phones Will Spread To Cars, Appliances And Entertainment by John C. McCarthy. It notes that while the explosion of app innovation started with the iPhone, the rise of the “App Internet” significantly impact the enterprise software and services market. Apple has over

iPhone 350,000 apps, and Android has countered with more than 150,000. They wrote that 33% of people with smart phones, download applications at least monthly. I am part of the majority on this issue but I do enjoy my smart phone. As part of the report, they interviewed 27 vendors in this space. I was pleased to receive a review copy of the report.

According to their survey of over 2,100 North American and European software decision-makers, 41 percent say that increasing the number of mobile apps for both employees and customers was a high or critical software priority. The development of this mobile “app Internet” with hybrid local and cold-supported applications will not only foster huge levels of innovation, but it will also open up new services opportunities around the creation and management of these B2C and B2B apps.

This second wave of innovation will leverage cloud-based services. Forrester believes that three service lines will grow significantly during the next 36 to 48 months. First, building initial apps – projected to be at $5.6 billion/year market globally by 2015. Second, managing apps and devices – projected to be at $3.8 billion/year market globally by 2015. Third, re-inventing the business processes and back-end systems – projected to be at $7.6 billion in revenues by 2015

As innovation continues and services vendors help IT pick up the slack, the app Internet will also accelerate the evolution of the enterprise desktop and business applications markets. Forrester sees four main shifts ahead. First, lower-cost apps will increase pricing pressure. Second, task-oriented experience will drive modular design. Third, the consumerization of IT will promote a freemium model. Fourth, a range of different revenue models will emerge. The app stores have really opened up the market.

Some of the innovations will come as sensors in the new mobile devices unlock the notion of context. For example, the sensors enable apps to limit the amount of cumbersome data entry by auto-calculating your location. In addition, the simpler, purpose-built, task-oriented apps are easy to use. To address the lack of screen real estate, the apps have to be highly relevant and very straightforward. This requires creative UIs.

The report concludes with the suggestion that the boundary between business and consumer that has been gradually eroding since the advent of the initial home PC in the late 1980s will fall completely. With the advent of the Freemium sales model and taking a percentage of the transaction, they predict that that the two worlds will become one.

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