Month: July 2015

The Developer Economics 9th edition report – Published and ready for free download

VisionMobile’s newest publication, the State of the Developer Nation report, is a free pdf compiled of all the latest developer trends in the form of insights. Over 13,000 devs participated in our latest research, and shun light on various key aspects that currently dominate the developer landscape.

Why are cloud developers making more money? How much has Swift grown? Which are the top cloud development platforms today? Such questions are made transparent in our latest report.

Furthermore, the 9th edition includes Mobile, desktop, IoT, and Cloud services as well. You can find our newest publication under the reports tab. Please enjoy your reading and email me if you have any feedback

link to the report: http://vmob.me/DevEcon3Q15ni

 

 

 

Who, What, How, and Why: software development laid bare

Every six months we ask developers around the world those four questions, to see how the industry is evolving. Now in its 9th edition the VisionMobile Developer Economics survey reached out to 13,000 developers, from 149 different countries, and the results are available in our biannual report: State of The Developer Nation Q3 2015.

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Who

94% of our 13,000 developers are male, showing a gender imbalance which needs to be addressed if the industry is going to reflect society as a whole. North America is making some progress here, but even in the land of opportunity only a tenth of developers identify themselves as female, and the figures of the rest of the world are much worse.

It’s perhaps surprising that Africa is next best in terms of equality, while Europe is positively embarrassing with only 4% of developers ticking the box for the minority sex. South America offers the greatest imbalance, but nowhere do developers reflect the proportion of women in the general workforce.

What

Cloud is increasingly important for developers, and cloud developers the most likely to be generating revenue (67% of them are bringing in more than $500 a month). But there’s no rush to the public offerings such as AWS or the Google App Engine, despite all the media attention: 44% of cloud developers are creating apps in private, for use on private clouds.

The Internet of Things is also getting a lot of developer attention, though more a quarter of IoT developers (26%) don’t know who their eventual customer will be. Half of those developers are making applications, rather than hardware or firmware, reflecting the evolution of the IoT industry.

When it comes to mobile the two dominant players (Android and iOS) are squeezing out the competition and 37% of mobile developers are targeting both the leading platforms. Interest in creating apps for Windows Phone has dropped slightly since we last asked, from 30% to 27%, but developers are understandably nervous of Windows 10 and the uncertainty over Microsoft’s commitment to mobile.

How

Across the developer community the most-popular development language is now a combination of JavaScript and HTML5. The evolution of web languages has imbued them with functionality, while cross-compilers and packaging tools can make them indistinguishable from native applications. That’s been enough to attract 71% of developers in North America, though only 58% in Asia where old-school languages such as Java and C retain their presence.

Learning a new language is always a challenge, though the growth in Apple’s Swift shows that developers are willing to invest in their education. Swift is, perhaps unsurprisingly, attracting a good proportion of self-taught developers (27% of those primarily using Swift consider themselves self-taught), while Java, C#, and Objective C, all appeal to degree holders (around 60% have degrees) who prefer a more-formal learning environment (around 17% are self-taught).

Why

Not all developers are motivated by money, in fact many professional developers are hobbyists or amateurs in another field. More than half of our mobile developers, for example, are also mucking around with IoT – some professionally, but mostly just to see what it can do, and what they can do with it. Developers are predominantly young, with an average age of around 30, and have both the time and the motivation to explore new areas. Many are involved in open-source projects: 11% tell us that Linux is their primary desktop target platform, despite the fact that the open-source OS accounts for less than 2% of desktop installations.

In mobile the path to revenue, if not riches, is clearly selling products and services, in the manner of Uber or Just Eat, rather than downloads and booster packs, in the manner of Candy Crush and Minecraft. Only 10% of mobile developers are chasing e-commerce revenue, but almost a fifth (19%) are taking more than $100,000 a month – a figure that only 6% of those reliant on advertising can match.

The State of the Developer Nation

The whole report, complete with graphics and figures, is a free download, and packed with more insight and analysis from Vision Mobile.

Facebook’s next pivot

Facebook is now starting to hit physical limits to its digital growth. Three quarters of the company’s revenue are coming from North America and Europe where user growth is slowing down. Facebook’s average revenue per user in the “rest of the world” region, which includes many developing nations in South America and Africa with highest user growth rates, is 10 times lower than the average revenue per user in North America ($0.90 vs. $9.30 per user respectively). To grow its business in emerging economies [tweetable]Facebook needs to look into business models beyond advertising and app installs[/tweetable].

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Signs are that Facebook is preparing its next pivot. Piecing together Facebook moves and hires, we believe that [tweetable]Facebook will be launching a social marketplace combined with financial services[/tweetable]. This will unlock new multi-billion dollar markets in the world’s fastest growing economies. A pivot which could be 10 times bigger than its pivot to mobile, which since starting in 2012 was responsible for 76% the company’s ad revenue in Q2 2015.

From social network to social marketplace

BuzzFeed recently reported that Facebook is experimenting with building out shops within Facebook Pages. E-commerce shops within Facebook pages will turn the social network into a humongous social marketplace where the entire shopping experience will occur within Facebook — from product discovery to checkout.

Facebook has created a sprawling mobile messaging empire with its Whatsapp, Facebook Messenger and Instagram apps – reaching 800M, 700M and 300M active monthly users, respectively. In doing so, Facebook is not leading, but following. Facebook is copying the business model of WeChat, Line and KakaoTalk, the asian social messaging apps, which proved that mobile messaging can be monetised through e-commerce. WeChat, Line and KakaoTalk evolved into all-encompassing ecommerce platforms where users can shop for everything from stickers and games, to groceries and cars, and even book taxis and flights.

Instagram is already used by people to sell everything from goats to art, and Facebook should be able to turn it together with Messenger and Whatsapp into powerful mobile e-commerce platforms.

Adding payment services to Facebook’s messaging empire makes perfect sense. David Markus, who left the position of Paypal CEO to lead Facebook messaging platform, said in his interview to Wired:

“VOIP is just one way that the company hopes to use the messaging app as a platform for much bigger things, including online payments.”

In March 2015, Facebook unveiled a US-only peer-to-peer payment service for Facebook Messenger that lets you connect your Visa or Mastercard debit card and tap a “$” button to send friends money on iOS, Android, and desktop with zero fees.

From Internet.org to Bank.org

For now, the Facebook payment service is an extension of a traditional banking service. But what about the countries where Facebook pushes its Internet.org initiative for affordable Internet access? To make payments work in countries without established banking services Facebook needs to create its own “backroom” infrastructure for “storing” money and become a digital bank.

The initial opportunity for Facebook is remittance services – a global $583 billion market controlled by  Western Union and MoneyGram. But this is just the beginning.

A bank is a financial intermediary that accepts deposits and channels them into loans, where banks make most of their money. In other words, [tweetable]a bank is a platform connecting customers that need credit with customers that have capital surpluses[/tweetable]. To be successful, a bank needs to manage risk and minimize defaults.

Financial services in emerging economies require new business models and approaches to managing risk. For example, InVenture runs a Mkopo Rahisi service in Kenya that with the help of an Android app creates a reliable credit score by analysing more than 10,000 data points from the activity on a customer’s mobile handset. Instead of giving this score to banks, InVenture services the loans independently. Shivani Siroya, founder & CEO of InVenture writes:

“Since our app launched in Kenya last spring we’ve provided millions of dollars of loans to tens of thousands of customers. Our repayment rate is at more than 85% and more than 90% of our borrowers come back for a second, third, fourth, even fifth loan.”

Facebook’s ability to manage credit risk based on information from its social network would be second to none. Imagine how big such lending service for the unbanked can become at Facebook scale!

Facebook was always an interesting company to watch. It could well happen that Facebook’s advertising and app install businesses that get so much attention today are just a stepping stone to a much bigger ambition. The ambition of becoming the ecommerce and financial infrastructure for the world’s fastest growing economies.

Clash of industry cultures: how a data mindset will transform Industrial IoT

The industrial world is undergoing a fundamental metamorphosis. Every industrial company has become a software and data company, overnight. In our latest report, the Industrial IoT Landscape 2015, we bring data on the 1M+ Industrial IoT developers in the world today, and we show that the winning Industrial IoT developer ecosystems are already emerging.

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“If you went to bed last night as an industrial company, you’re going to wake up this morning as a software and analytics company.” – Jeff Immelt, CEO of General Electric, Minds+Machines summit, 2014

The industrial world is undergoing a fundamental metamorphosis. To paraphrase GE’s Jeff Immelt: every industrial company has become a software and data company, overnight. Two very different engineering cultures are clashing and converging. On the one hand, the traditional industry that knows how to build reliable mechanical and electrical machinery that lasts for decades. On the other, the fast-moving software and data science industry, incubated in consumer markets like e-commerce, digital advertising and social media. Industrial companies will have to be imbued with a software and data mindset if they are to stay competitive. A formidable challenge, to say the least.

The transformation of industry is not just about adopting new technology for incremental improvement. When data is put at the center of how industry operates, it will affect the entire business: not just engineers, but also production workers and product designers, marketers and salespeople. There is a dire need for people skilled in handling data with software across all these groups.

At the same time, software and data technology are rapidly becoming more accessible. This opens up opportunities not just for large-scale companies – the Bosch’s, GE’s and IBM’s of this world – but also for smaller manufacturers and technology providers. Small fish can become big fish quickly in this new pond.

In our new research report, the Industrial IoT Landscape 2015, we tell the story of this metamorphosis from the perspective of those who have the necessary skills – software developers – and those who work to democratize Internet of Things technology – platform vendors.

Over 1 million Industrial IoT developers crave better platforms

The advent of software developers working in an industrial context is no longer theory. We estimate that [tweetable]there are already over 1 million Industrial IoT developers in the world today[/tweetable].

61% of Industrial IoT developers are professionals, creating IoT products, selling their services as contractors, or employing their skills to improve their company’s products or processes. The Industrial IoT sector counts significantly more highly-experienced developers (with 6+ years experience) than other areas of the Internet of Things, across software, web, mobile and IoT technologies. This said, [tweetable]the bulk of Industrial IoT development is not performed by veterans[/tweetable] who have been connecting machines for decades. Just like in the broader IoT space, we see a large influx of new blood, starting about 2 years ago. Almost 2 in 3 Industrial IoT developers (63%) has less than 2 years experience in the Internet of Things.

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The top challenge for 48% of Industrial IoT developer is immature platforms, tools and standards. Developers crave modern software platforms that empower them to build careers and businesses. Our analysis shows that a specific class of platform vendors – companies from Amazon to SAP – have already started providing developers with top-of-the-line tools.

The Industrial IoT Landscape 2015 report contains a full profile of Industrial IoT developer demographics, psychographic segmentation, challenges and platform selection criteria. We have evaluated 30+ platforms on their ability to build vibrant developer ecosystems. Find out more here.

Skate to where IoT is going to be, not where it has been

[First published in Mobilbusiness, a Swedish online news and analysis publication that uncovers the latest and most relevant news on mobile innovation, market trends and enterprise mobilization.]

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IoT companies that focus on wrong types of innovation will be left behind. Wayne Gretzky, a legendary athlete, explained why he was so good at the fast-paced game of hockey:

I skate to where the puck is going to be, not where it has been.

The mobile market is a powerful example: Nokia, BlackBerry, Microsoft, Palm and many others missed the market shift and were left behind. The same will be true for the Internet of Things (IOT): five years from now the IOT market will be very different from what it is today. [tweetable]The future IOT winners skate to where IOT is going to be, not where it is today[/tweetable].

IOT: create a market or vanish

Harvard Professor Clayton Christensen explains in “The Capitalist Dilemma” that innovation, comes in three varieties: one is performance-improving (sustaining), another efficiency and a third one market-creating.

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The history of the mobile handset market is an excellent illustration of how market-creating innovation drives growth and reshapes huge markets in the matter of a few short years.

Before 2010 both Nokia and Research in Motion (RIM), the maker of popular BlackBerry devices, were at the top of their game. Nokia owned then 40% of the global handset market, netting $2.6 billion in Q4 2007. Fortune named RIM the world’s fastest-growing company in 2009. But then the tide turned: Market-creating innovations by Apple and Google completely reshaped the industry, wiping out once all-powerful companies.

Instead of competing with Nokia and RIM on sustaining and efficiency innovations, Apple and Google created a new market for mobile computers. In this new market demand is driven by apps catering to all possible needs and use cases. More precisely, the demand for mobile computers was (and is) driven by app entrepreneurs who work to discover and address unimaginable variety of user needs and use cases. The entrepreneur-driven demand has created huge new markets that are several times bigger than the existing mobile handset market could ever become.

3 million IOT innovators today

The data from VisionMobile’s Q1 2015 Developer Economics survey of over 4,000 IOT developers reveals that the forces of the market creating innovation are already in full swing. Already, more than half of mobile developers (53%) are involved in IOT development. We estimate that this amounts to over three million developers innovating in IOT today.

The evolution in the mobile industry holds a clear lesson for companies eyeing the IOT opportunity. Much like in mobile, market-creating innovations will define where the IOT market will be in the future. And just like in mobile, companies that focus solely on sustaining and efficiency innovations will be left behind destined to skate where the market has been.

Today analysts forecast billions of connected devices in the market by the end of the decade. But is the number of devices even the right metric? Just like smartphones, the amount of IOT devices shipped is the end-result, not the driving force of the market. Just like in mobile, the demand for IOT products will come from an army of IOT developers/entrepreneurs discovering and addressing thousands of needs and opportunities for consumers and enterprises alike. Just like in mobile, developers/entrepreneurs will decide who will be the winners and losers in the emerging IOT market.

The same companies that took the lead in the mobile market now reuse the playbook of market-creating innovation building developer ecosystems on top of their IOT platforms. VisionMobile’s IoT Developer and Platform Landscape 2015 report shows that Apple, Google, and Samsung (who also acquired SmartThings) are the clear leaders attracting most developers across Smart Home, Wearables, Health and Wellness and Connected Cars verticals.

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[tweetable]The future IOT market will not be the larger version of today’s market[/tweetable]. It will be dominated by developer-centric platforms, operate based on new business models, address needs that we cannot foresee today and serve new categories of customers. To win, skate to where the IoT is going to be: work with developers, play in the consumer market and try new business models.

The 3 unlikely lessons from the Microsoft/Nokia Adventure

Microsoft has finally raised the white flag in the battle for smartphone dominance. Microsoft announced that the company will be scaling down its mobile phone business it acquired from Nokia laying off 7,800 employees and writing off $7.6 billion (this is almost the entire value of the Nokia Devices and Service business minus the cash it came with).

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The decision is dramatic, but hardly unexpected. David Pierce writes in WIRED:

“Give Nadella some credit for seeing the writing on the wall, though to be fair it was basically written in huge letters and lit by floodlights.”

The writing on the wall is still there and can help us see where Internet of Things will be in a few years.

Lesson 1. Business model, not product features define your destiny

In my analysis from 3.5 years ago on the VisionMobile blog I argued that the paramount challenge for Microsoft and Nokia is a broken business model, not product features, user interface or integration of software and hardware. (A business model describes how a company creates, delivers and captures value.) From my 2012 blog:

“The basis for competition in software and mobile has changed – the once-successful business models of Microsoft and Nokia can no longer ensure profitable growth.

Combining two business models of the 1990’s won’t help the two companies regain their positions in the new world order, dominated by companies with Internet-age business models, like Apple, Google, Amazon and Facebook.

Looking at the industry through the lens of software-defined business models has helped us to accurately predict years before the story unraveled the duopoly of Apple and Google (2009), the demise of Palm (2009), the outcome of HP’s foray into mobile with WebOS (2010), BlackBerry’s meltdown (2010), and the failure of Windows Phone (2012).

The story repeats in Internet of Things. Much like in mobile, [tweetable]software-defined business models cause deep shifts in how value is created and delivered[/tweetable]. The IoT winners will be decided by business model innovation, not by technology, product features or standard committees. VisionMobile’s Stijn Schuermans wrote about it here – What the Internet of Things is not about.

Lesson 2. Skate to where the money will be, not where it has been

The mobile industry continues to change. In 2013 we wrote, together with Sameer Singh, in the The evolution of the handset business models:

“A third wave of disruption will again reshuffle the deck for all [mobile] industry players. We will see growth in a new class of business models, where handset hardware is no longer seen as a source of profits, but is treated as a distribution channel for digital products and services.

As price competition increases, commoditization pressure in the smartphone industry, variations of “hardware as distribution”, could become one of the primary drivers of profitability.

In 2014 Xiaomi became the most valuable tech startup in the world by executing on “hardware as distribution” business model and creating a new e-commerce market for itself. From “Only for fans, or why Xiaomi is not what you think it is”:

“Comparing Xiaomi with other traditional smartphone makers is like comparing Apple with Orange (a mobile network operator). The two happen to be in the same industry, but they are really in different businesses. Apple, Samsung, Huawei, Lenovo sell phones to make profits. Xiaomi sells phones to seed competitive e-commerce business that goes far beyond mobile.

Nokia and Microsoft focused on chasing today’s competition and missed the market transition that turned their strengths into weaknesses. The same will be true for the Internet of Things (IoT): five years from now the IoT market will be very different from what it is today. The future IoT winners skate to where IoT is going to be, not where it is today.

Lesson 3. Follow developers to find future winners

Microsoft and Nokia spent a fortune trying to attract developers to its Windows Phone platform. But it was too late. Google and Apple understood the importance of developers much earlier and had established thriving developer ecosystems. VisionMobile’s Andreas Constantinou wrote in “The Dead Platform Graveyard”:

“You can’t buy developer love. You can only plant the seeds.”

The data from the VisionMobile Q1 2015 survey of 8000+ developers shows that the majority of developers, including most valuable innovators, make apps for the Android and iOS duopoly (71% and 54% of developers respectively). The story of Windows Phone proves that distant 3rd place is not viable in the ecosystem race. Moreover, as we argued earlier, ecosystems create “Black Oceans” that make competition impossible for late comers to the ecosystem party.

Software developers emerge as a driving force in industry after industry, not just in mobile. VisionMobile’s Stijn Schuermans writes in Developer Megatrends 2015:

“Developers are conquering the wrist, with 3,500+ Apple Watch apps and 2,300+ Android Wear apps.
They’re conquering the car. Android Auto and Apple Carplay will be available on dozens of car models this year. 250+ OBD apps provide aftermarket solutions for car data, with growing support from big players in telecom and insurance.
Developers are conquering the home, taking advantage of new technologies and platforms like Samsung SmartThings, Apple HomeKit, Google Weave, Eclipse Smart Home or dozens of device APIs.
Developers are even conquering the sky. Major drone players like DJI (from Phantom fame), 3D Robotics (dronekit.io) or Airware are providing SDKs for drone apps, helping developers to put drones to use in industry, agriculture, construction or mining.
Cities, healthcare, clothing, factories, … – They’ll all fall to the wave of innovation by developers.

Much like in mobile, [tweetable]IoT competitive battles will be decided by attracting developers, not by standards committees.[/tweetable]

There is a lot to learn from how the mobile industry was reshaped by software-defined business models, market-creating innovations and developer ecosystems. The lessons are in the plain sight. Microsoft and Nokia ignored them at their own peril. Who will be next?

Just out: Developer Megatrends H1 2015

Software developers are a driving force in every industry and a source of competitive advantage. They are the kingmakers of modern business. In our 50+ page Developer Megatrends H1 2015 report (download it here or see the SlideShare presentation), we highlight 4 key developer trends for 2015.

Every day the evidence is mounting: software developers are a driving force in every industry and a source of competitive advantage. They are the kingmakers of modern business.

For mobile devices, there is no doubt. 1.5 million apps on iOS and Android each have propelled us into a new era of mobile computing and given rise to whole industries that weren’t even possible before. Look no further than the havoc that Uber is wreaking in the transportation industry. Developers are not finished with mobile, either. [tweetable]Every year, 800,000 new mobile developers join the pack[/tweetable]. That’s about the population of South Dakota, Macau or Cyprus, every year.

Developers are invading more and more industries and verticals. Our Q1 2015 Developer Economics survey showed that 53% of mobile developers are already involved in the Internet of Things, with many more to come. [tweetable]Our latest estimates put the amount of IoT developers over 4 million individuals[/tweetable].

Developers are conquering the wrist, with 3,500+ Apple Watch apps and 2,300+ Android Wear apps. They’re conquering the car. Android Auto and Apple Carplay will be available on dozens of car models this year. 250+ OBD apps provide aftermarket solutions for car data, with growing support from big players in telecom and insurance. Developers are conquering the home, taking advantage of new technologies and platforms like Samsung SmartThings, Apple HomeKit, Google Weave, Eclipse Smart Home or dozens of device APIs. Developers are even conquering the sky. Major drone players like DJI (from Phantom fame), 3D Robotics (dronekit.io) or Airware are providing SDKs for drone apps, helping developers to put drones to use in industry, agriculture, construction or mining. Cities, healthcare, clothing, factories, … – They’ll all fall to the wave of innovation made by developers.

When we say developers, we don’t just mean hobbyists tinkerers. Developers matter a great deal to businesses. From telecom to fashion, from logistics to lighting, today’s competitive battles are won and lost by attracting developers. To cite just one example, Salesforce took the #1 spot in CRM systems from Oracle, in large part due to its 1.4M strong developer ecosystem. Every modern company must master developer ecosystem skills if it is to thrive in the information age.

4 key developer trends in 2015

In our 50+ page Developer Megatrends H1 2015 report, we highlight 4 key developer trends for 2015.

Developers escape from the app store. Revenue from app store sales or in-app advertising grew by 70% in one year, according to IDC and App Annie. Great news! Or is it? The truth is that [tweetable]the app store alone cannot sustain the mobile developer population[/tweetable]. 60%+ of developers are under the app poverty line and only 1 in 9 is in the safe zone. Most money in the app economy is not made from the app store, but from app-driven e-commerce. Selling offline goods and services via apps represents 71% of the app economy in 2015 – and it’s earned by only 9% of developers! Whether using apps as a channel (like Amazon), building a mobile-first business (like Uber) or using apps as a platform (like WeChat), e-commerce is winning app revenue model and will remain so for the foreseeable future.

Developers escape from consumer markets. There is another way to dodge the poverty trap: target enterprises. Only 20% of mobile developers target enterprises, but 46% of them makes over $10K per month, versus 19% for consumer-oriented developers. Making the jump to enterprise might be easier than it seems. There is substantial overlap in what consumer and enterprise app developers are working on. [tweetable]Many apps can be simply repositioned or repurposed to attract an enterprise audience rather than consumers[/tweetable]. We see a similar pattern among Internet of Things developers. Winning app and IoT developers will repurpose consumer technology and business models to solve the most important enterprise problems, and dodge the poverty trap by doing so.

Apps escape from screens. The app paradigm of bite-sized software is replicated outside of smartphones: it can be found on the watch, desktop, car, TV, browser, and in the home. The nature of apps is changing too. From yesterday’s traditional app like Angry Birds (where the value is delivered by the app itself), we’ve moved to the companion app. In Honeywell’s thermostat-controlling Lyric app, the value is in the device, and the app is just the remote control. [tweetable]The value in tomorrow’s apps will come from making sense of data[/tweetable]. Apps like Apple Health process triggers and signals across devices, sensors and APIs. As a consequence, data developers and data platforms will soon be king.

Platforms escape from mobile. What’s the future of mobile platforms, given the stalemate in platform wars and the evolution to data-centric apps that moves the focus away from mobile OS? Mobile ecosystems like Android and iOS move to the Internet of Things in force, fully leveraging their developer and user bases to gain traction fast across all major IoT verticals. Others like e-commerce players are following in their footsteps, attracting devs with distribution capability and engaged users. Here’s the billion dollar question then: [tweetable]will the network effects from mobile carry over to IoT[/tweetable]? Will the mobile platform duopoly be sustained in IoT? In the future, IoT device selection by consumers and enterprises will be determined by “will it work with my existing services and devices”. We predicted this as early as 2010. In the 2012 edition of the Megatrends report, we talked about the evolving meaning of convergence. From converged networks, to converged devices, to experience roaming. That prediction is now playing out in full.

Download the full Developer Megatrends H1 2015 here.