BYOD Economics (CISCO)

Cisco IBSG
Horizons
The Financial Impact of BYOD

A Model of BYODs Benefits to Global Companies
May 2013
Horizons
Cisco IBSG
Cisco IBSG 2013 Cisco and/or its affiliates. All rights reserved.
Cisco Public
Internet Business Solutions Group
Cisco IBSG
Horizons
IBSG Horizons BYOD Study Waves: Global State of BYOD and Its Implications
Current Wave
IBSG Horizons: BYOD
U.S. Trends June 2012 600 IT leaders U.S. enterprises
IBSG Horizons: BYOD

Global Trends September 2012 4,892 IT leaders Midsize + enterprise 8 countries + U.S. (original survey + 312 midsize)
Cisco Public
IBSG Horizons: BYOD

Financial Impact May 2013 Financial impact of BYOD on companies Maximizing ROI of BYOD 6 countries
Internet Business Solutions Group 2
Source: Cisco IBSG, 2013

Cisco IBSG
Horizons
IBSG Horizons BYOD Financial Impact: Assessment of Typical Firm

Ciscos BYOD Experience
Primary Research
Financial Model
BYOD Financial Impact
Extensive Literature Review

Cisco Public
Cisco IBSG
Horizons
Overview of Primary Research Scope
2,415
Mobile Users
18
Industries
Exploration of BYOD benefits from the perspective of mobile users: white-collar employees who use a smartphone, tablet, or laptop for work at least sometimes 400 surveys in each country: U.S., U.K., Germany, India, China, Brazil 73% enterprise (1,000+ employees), 27% midsize (500-999 employees) 29% executives, 71% knowledge workers (47% midlevel managers and professionals, 24% other individual contributors)
Cisco Public
Cisco IBSG
Horizons
BYOD Devices To Double by 2016
Million
405
Total expected number of BYOD devices in all 6 countries by 2016, growing from 198 million in 2013 Total growth in number of BYOD devices (27% CAGR), 2013-2016 BYOD devices per mobile employee by 2016 (1.2 today).
105% 1.3
Sources: EIU, 2013; Strategy Analytics, 2012; Cisco IBSG, 2013

Cisco Public Internet Business Solutions Group 5
Cisco IBSG
Horizons
Strong BYOD Growth Everywhere, but China, U.S., India Are Biggest Markets
Estimated BYOD Devices in Global Workplaces, 2013-2016 (in Millions)
Millions 175 150 125 100 75 50 25 0 China U.S. India Brazil Germany U.K.
166
6-Country Total:
108 198 million BYOD devices (2013) 405 million BYOD devices (2016) 105% growth (27% CAGR) 76 2013 32 12 25 11 18 2016 8 12
63
71
CAGR
38%
15%
33%
25%
18%
15%
Sources: EIU, Strategy Analytics, Cisco IBSG, 2013

Cisco Public
Cisco IBSG
Horizons
Employees Are Bringing Multiple Devices, and Paying To Do So
1.7 $965 $734

Average number of personally owned devices used by each surveyed BYOD employee Average out-of-pocket spending per BYOD employee on personal mobile devices used for work Average annual data plan spending for BYOD employees who use the plan at least partially for work
N=1,679 BYOD respondents
Cisco IBSG
Horizons
BYOD Devices: Smartphone Leads, but Tablets Are Closing the Gap
Percentage of BYOD Employees Bringing Mobile Devices to Work
Laptop 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Total Average # of BYOD Devices U.S. U.K. Germany India China Brazil 37% 56% 40% 33% 60% 81% 81% 72% 54% 41% 32% 34% 53% 59% 43% 61% 82% 82% Smartphone Tablet 90% 79%
49%
1.7
1.8
1.6
1.7
1.7
1.8
1.8


Cisco IBSG
Horizons
Recognizing the Value: Employees Are Paying To BYOD

Average Out-of-Pocket Spending to Date per BYOD User on Devices, Yearly Spend on Data Plans (USD)
Device spend (total)
1400 $1,234 1200 1000 800 600 $447 400 200 0 Total U.S. U.K. Germany India China Brazil Source: Cisco IBSG, 2013 N=1,658 BYOD respondents who knew their device spend; N=1,620 BYOD respondents who knew their data plan spend
Data plan spend (per year)
$1,172 $972 $909 $823
$1,099
$965 $734 $809
$901 $770
$752
$346
Cisco Public
Cisco IBSG
Horizons
Why They BYOD: Efficiency, Flexibility, and Initiative
#1 #2 #3
Can get more done with my own device Want to combine work and personal activities or access personal applications Need device for work, but company does not provide it

Cisco IBSG
Horizons
BYOD Devices Allow Employees To Do More, Merge Work and Personal Tasks
Reasons BYOD Employees Bring Their Own Devices
(Percentage of Respondents)
Laptop
Smartphone
Tablet
Get more work done on own device Combine work and personal lives Need it, but it is not provided Prefer the interface / OS Want to avoid restrictions / scrutiny Corporate devices lack functionality Company provides device, but want to use my own 23% 23% 22% 18% 14%
56% 46% 25% 24% 22% 19% 13%
45% 47% 29% 26% 22% 20% 14%
46% 44%
N=624 laptop BYODers
N=1,361 smartphone BYODers
N=943 tablet BYODers

Cisco Public
11
Cisco IBSG
Horizons
BYOD Makes Employees More Productive and Innovative
81 36% 53%
Minutes per week saved in U.S. highest of all countries surveyed (37-minute average) Save at least two hours per week by using personal mobile devices at work Have raised work productivity through innovative work practices enabled by their devices
Cisco IBSG
Horizons
BYOD Enables Efficiency and Innovation, but Gains Are Uneven Across Countries
Net employee time gained per week: 37 minutes
37 min.
40 30
23 17 8 5 3 25 23 16 9 2 3 4 0 14 24 1415 12 4 1 1 -2 -3 -8 -9 -10 1 1 23 17 8 24 19 3 5 2 2928
81 min.
51 min.
4 min.
35 min.
17 min.
34 min.
Minutes per week
20 10 0 -10 -20 -30
7 9
-6 -13
-5 -11
-13 -23
-9 -14 -16
Total
U.S.
U.K.
Germany
India
China Better collaboration
Brazil
Improved efficiency Reduced administration Source: Cisco IBSG, 2013

New ways of working Downtime
Additional availability More distractions

Cisco IBSG
Horizons
Only 30% of Mobile Users Prefer Corporate Devices
30% $2,200 60% 51%

Would prefer to work in a corporateprovisioned environment* Value placed on having a workplace with a preferred mobile policy Use a corporate device because they must** Use a corporate device for better network access **
*N = 2,415 respondents; **N = 736 corporate users
Cisco IBSG
Horizons
Strong Preference for BYOD in Most Places, Especially in Asia

Percentage of Respondents
Prefer BYOD
70% 60% 50% 40% 30% 20% 10% 0%
10% 30% 21% 32% 24% 32% 27% 49% 44% 41% 37% 32% 31% 28% 18% 46% 38%
Prefer corporate provisioning

63%
No preference
66%
16%
16%
Total
U.S.
U.K.
Germany
India
China
Brazil

N=2,415 all respondents

Cisco IBSG
Horizons
Why Employees Use Company-Issued Devices Instead of Their Own

Percentage of Corporate Employees Who Use One or More Company-Issued Devices for the Following Reasons
Laptop
Company requires company-issued devices Better access to company network Better access to IT support Better access to company applications Better access to company collaboration tools Cheaper to use company device Better, faster device than I would get on my own Allowed to use company device for personal use 41% 35% 34% 31% 30% 19% 19% 16%
N=707 corporate laptop users
Smartphone
40% 28% 31% 27% 26% 29% 20% 18%
N=628 corporate smartphone users
Tablet
34% 33% 34% 38% 31% 23% 26% 15%
N=440 corporate tablet users

Cisco Public
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Cisco IBSG
Horizons
Executives Are Driving Most of Current BYOD Productivity Gains

Factor by which the average BYOD executives productivity gain exceeds that of the average knowledge worker (76 vs. 23 minutes) Executives with access to corporate mobile apps, compared with 41% of BYOD knowledge workers
3X 61%
Cisco Public
17
Cisco IBSG
Horizons
Executive BYOD Productivity Gains Are Three Times Those of Knowledge Workers
Productivity Gains for BYOD Executives and Knowledge Workers, in Minutes per Week
Executives 120 100 80 60 40 20 0 -20 -40 99 76 73 84 62 33 37 18 2 -18 Total U.S. U.K. Germany India China Brazil 16 Knowledge workers 101 82
23


Cisco IBSG
Horizons
IT Is Provisioning Executives; Provisioning of Knowledge Workers Is Less Frequent

Applications Permitted on Employee-Owned Devices
Executive Corporate email and calendering Corporate collaboration applications Corporate office productivity applications Corporate security applications Company-specific mobile "apps" Applications I bring to work
32% 41% 43% 50% 50%
Knowledge worker
73%
65% 65%
61% 62% 61%
72%

N=2,415 respondents
Cisco IBSG
Horizons
Reactive, Not Strategic: Most Companies Have Implemented BYOD on Ad-Hoc Basis
Reactive
Basic BYOD enabled as demanded Policies of pushback and containment Partial productivity gains
vs.
Strategic
Comprehensive BYOD viewed as strategic advantage Employees informed and encouraged to work their way Fuller productivity gains
Internet Business Solutions Group 20
Cisco Public
Cisco IBSG
Horizons
Getting Strategic: The Comprehensive BYOD Concept

Comprehensive BYOD includes:
Ability to monitor and remotely wipe corporate data Automatic enforcement of corporate access and usage policies Dual persona and device configuration Ability to move between networks seamlessly and securely Ability for users to log in using multiple devices simultaneously Corporate collaboration tools that work on all end-user devices Simple and user-friendly authentication for all device types and brands Secure access to corporate network through wired, Wi-Fi, remote, and mobile means
Cisco Public
21
Cisco IBSG
Horizons
Nearly Three-Quarters of BYOD Respondents Have Only Basic BYOD

Percentage of Respondents Who Have Basic and Comprehensive BYOD
Basic BYOD
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Total U.S. U.K. Germany India China Brazil 74% 61% 77% 75% 72% 74% 83% 26% 39% 23% 25% 28% 26% 17%
Comprehensive BYOD


Cisco IBSG
Horizons
For Many, BYOD Is Harder than Expected, but Leaders Are Seeing Cost Benefits
TCO Savings IT Leaders Expect, by BYOD Maturity Level 35 Percent savings on TCO 30 25 20 15 10 5 0
High hopes
Reality check 1-2 3-5 6-8
Operational efficiency
BYOD maturity level (# of capabilities)

N=135 IT decision makers, U.S. firms only.

Cisco IBSG
Horizons
Overview of Financial Model and Analysis

Survey
29% executives 71% knowledge workers 70% BYOD 30% non-BYOD
Typical Enterprise
10,000 employees 5% executives 50% knowledge workers 45% other
Financial Analysis
12% of respondents 70% of respondents 18% of respondents Company Has
No BYOD
Survey Results
Basic BYOD Comprehensive BYOD

Key Metric:
Annual value created per mobile employee
(= value per BYOD user x BYOD adoption among mobile employees)
Company Has Company Has

Cisco IBSG
Horizons
Room for Improvement: Typical BYOD Implementation Only 21% Along Value Journey
Annual Value per Mobile Employee Derived from Basic and Comprehensive BYOD Programs
$1,300 still on the table
$1,650
$350
Basic BYOD
Comprehensive BYOD
Cisco Public
25
Cisco IBSG
Horizons
Comprehensive Improvement: Big Gains, No Matter What the Starting Point

Annual Value per Mobile Employee Derived from Basic and Comprehensive BYOD Programs
U.S. $
3,500 3,000 2,500 2,000 1,500 1,000 500 0 AVERAGE U.S. U.K.
Progress along the value journey

100% 80%
3,150 2,250 1,650 950 350 400 0

Germany India
1,600 950 1,050 400 100

China
60% 40% 20% 0%
900 300
Brazil
Value per mobile employee of "Basic BYOD" Value per mobile employee of "Comprehensive BYOD" Progress along the value journey (value of Basic BYOD / value of Comprehensive BYOD) Source: Cisco IBSG, 2013
Note: Numbers have been rounded to the nearest $50.

Cisco IBSG
Horizons
Migrating to Comprehensive BYOD: Where the Gains Are

Impact of Moving from Basic to Comprehensive BYOD
Start and end states 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 $ / mobile employee / year Positive impact Negative impact
Basic BYOD
Corporate Migrations
Current BYODers
New Users*
Cost Savings
Investments Comprehensive BYOD
$1,300 of Annual Value per Mobile Employee

*New Users refers to non-mobile employees going mobile for the first time due to BYOD
Cisco IBSG
Horizons
Migrating to a Comprehensive BYOD Strategy Yields Significant Gains

Impact of Moving from Basic to Comprehensive BYOD
$3,156
$ / mobile employee / year
1,605
$2,219 $1,588 $956

206
Comprehensive BYOD Current BYOD users New users Corporate migrations Cost Savings
$1,656
175 970 1,226
407
127
$1,189
544
$925
709 54 38 100 125 -100
1,048
Basic BYOD Investments
115 204 111 359 -103
388
943 111 392 -101 -104
690 96 167 129 -119
49 70 88 6 425 -86
109 151 113 277 -110
AVERAGE
U.S.
U.K.
Germany
India
China
Brazil

Note: Exact figures. In other slides, value of BYOD is rounded to the nearest $50.
Cisco IBSG
Horizons
Comprehensive Investment Portfolio: Software, Operations, and Policy/Security

Typical Cost Distribution of Upgrade to Comprehensive BYOD
Support & Training
Telecoms:
4%
Policy & Security:
14%
Software:
37%
26%
Network & Operations:
Actual investments needed will vary according to current network capabilities
19%
Cisco Public
29
Cisco IBSG
Horizons
Comprehensive BYOD Pays for Itself, Apart from Productivity Improvements

Hard Cost Savings and Investments from Basic to Comprehensive BYOD
Hardware / software cost saving Support cost saving Net direct benefits 140
US $ / mobile employee / year
Telecoms cost saving Costs
120 100 80 60 40 20 0
50 8 AVERAGE 16
17 14 57 103
14 16 54 101 46 104 119 32 86 61 40 7 U.S. U.K.

Cisco Public
17 16 39 100 45 2 India China 1 Brazil

30
45
44 110
52 26
51
53 2
9 Germany
Cisco IBSG
Horizons
Developed Economies and Emerging Markets Benefit in Different Ways

Productivity Value Realized as Companies Move from Basic to Comprehensive BYOD
Share of total Comprehensive BYOD benefits
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
22% 13% 8% 13% 13% 14% 7% 13% 12% 15% 22% 24% 14% 1% 12% 14% 16% 4% 10% 7% 14% 17% 17% 22% 18% 19% 22%
9% 17% 17% 11% 14% 13% 15% 20%
12% 16%
3% 18% 10%
11% 11% 11% 11%
8% 19% 19%
New ways of working Collaboration Efficiency Distractions Administration Downtime Availability
Innovation benefits
28%
23%
Reduced barriers to productivity
While new ways of working plays a big role in the U.S., U.K., and Germany, the most value for Emerging Markets comes from more basic benefits
Cisco Public
31
Cisco IBSG
Horizons
Knowledge Workers Gain Most from Comprehensive BYOD

Minutes of expected productivity gain per week by knowledge workers by moving from Basic to Comprehensive BYOD, versus 41 for executives Percentage of productivity gains that will come from knowledge workers in a typical firm
90 88%

Cisco IBSG
Horizons
Comprehensive BYOD: Improved Efficiency, Innovation, Availability

Productivity Impact Sources for Knowledge Workers in Basic and Comprehensive BYOD
200 150 100
184
108 59 18 23
115 62
119 79 51 -6 4 89
Minutes / week
50 0 -50 -100
-24
Basic Comp. Basic Comp. Basic Comp. Basic Comp. Basic Comp. Basic Comp. Basic Comp. AVERAGE
Efficiency
U.S.
U.K.
Availability
Germany
Collaboration
India
Administration
China
Downtime Distractions
Brazil
Total
New ways of working


Cisco IBSG
Horizons
BYO-Laptop Needs To Be Core Part of Comprehensive BYOD Strategy
37% $750
Percentage of BYOD employees who bring their own laptop Expected annual value per employee from BYO-laptop component of Comprehensive BYOD strategy
Cisco Public
34
Cisco IBSG
Horizons
BYO-Laptop Is Important Component of BYOD Strategy Globally

Value of BYO-Laptop in Comprehensive BYOD
3500 3000 US $ / employee / year 2500 2000 1500 1000 500 0
AVERAGE U.S. U.K.
3,150
2,250 1,650 1,350 750 250

Germany India
1,600 1,100 950 1,050 650 350

China Brazil
900
700
BYO-Laptop Value (None
Comprehensive BYOD)
Total Comprehensive BYOD Value

Cisco Public
35
Cisco IBSG
Horizons
IBSG Horizons Economics of BYOD Study: Top Findings

Employees are just getting started bringing their own devices to work. By 2016, nearly a half-billion BYOD devices will be in use in across the six countries surveyed. Less than one-third of respondents prefer corporate devices. Forty-nine percent chose a fully self-provisioned work environment. Mobile users are willing to invest in BYOD. BYOD users have spent an average of $965 on BYOD devices, plus $734 annually on voice and data plans used at least in part for work. BYOD is delivering productivity gains around the world. Even with the limitations of current BYOD deployments, employees save an average of 37 minutes per week of productive work timebut gains are uneven across countries. Most companies have been reactive, rather than strategic, in enabling BYOD, reacting to employee demands with a patchwork of BYOD.
Cisco Public
36
Cisco IBSG
Horizons
IBSG Horizons Economics of BYOD Study: Top Findings

Companies can gain an additional $1,300 annually per mobile user as they move from Basic to Comprehensive BYOD. Moving from Basic to Comprehensive BYOD sparks employee-led innovation in developed countries, and reduces productivity losses in emerging markets. Comprehensive BYOD pays for itself. Hard-cost savings are posted in hardware, service, and telecom. More choice, better network access could convert corporate device users to BYOD. 36% of corporate device users would rather BYOD. The top reasons corporate users do not BYOD already is that they are not permitted to do so (51%) and because of limited network access and support for BYOD devices (49%). BYO-Laptop should be a core part of a Comprehensive BYOD strategy. IBSG estimates that laptops contribute nearly half of the estimated $1,650 of potential value per mobile user.
Cisco Public
37
Cisco IBSG
Horizons
Call to Action
Basic BYOD is just the beginning of the real opportunity BYOD suggests that technology adoption can be reimagined BYOD is all about productivity gains and the future of work Employee empowerment requires high information security BYOD can enable hard-cost savings
Develop a strategic, comprehensive BYOD approach Encourage experimentation and best-practice sharing Secure an executive sponsor from outside the IT organization Develop new policies and approaches (cloud, virtualization) Use BYOD as a trigger to rethink entitlement, support approaches
Cisco Public
38
Cisco IBSG
Horizons
For More Information

Contact Ciscos Internet Business Solutions Group
Richard Medcalf
rmedcalf@cisco.com
Jeff Loucks
jeloucks@cisco.com
Lauren Buckalew
labuckal@cisco.com
Fabio Faria
ffaria@cisco.com
Horizons
Cisco IBSG
Cisco Public
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BYOD Economics (CISCO)

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BYOD Economics (CISCO)

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Cisco IBSG

The Financial Impact of BYOD

Internet Business Solutions Group

IBSG Horizons: BYOD

IBSG Horizons: BYOD

Source: Cisco IBSG, 2013

IBSG Horizons BYOD Financial Impact: Assessment of Typical Firm

BYOD Financial Impact

Extensive Literature Review

Internet Business Solutions Group

Overview of Primary Research Scope

Internet Business Solutions Group

BYOD Devices To Double by 2016

Sources: EIU, 2013; Strategy Analytics, 2012; Cisco IBSG, 2013

Sources: EIU, Strategy Analytics, Cisco IBSG, 2013

Internet Business Solutions Group

Employees Are Bringing Multiple Devices, and Paying To Do So

1.7 $965 $734

Source: Cisco IBSG, 2013

N=1,679 BYOD respondents

Recognizing the Value: Employees Are Paying To BYOD

Data plan spend (per year)

$1,172 $972 $909 $823

$965 $734 $809

Internet Business Solutions Group

Why They BYOD: Efficiency, Flexibility, and Initiative

Source: Cisco IBSG, 2013

56% 46% 25% 24% 22% 19% 13%

45% 47% 29% 26% 22% 20% 14%

N=624 laptop BYODers

N=1,361 smartphone BYODers

N=943 tablet BYODers

Source: Cisco IBSG, 2013

Internet Business Solutions Group

BYOD Makes Employees More Productive and Innovative

Minutes per week

20 10 0 -10 -20 -30

China Better collaboration

Improved efficiency Reduced administration Source: Cisco IBSG, 2013

New ways of working Downtime

Additional availability More distractions

N=1,679 BYOD respondents

Only 30% of Mobile Users Prefer Corporate Devices

30% $2,200 60% 51%

Strong Preference for BYOD in Most Places, Especially in Asia

Prefer corporate provisioning

Source: Cisco IBSG, 2013

N=2,415 all respondents

Why Employees Use Company-Issued Devices Instead of Their Own

Source: Cisco IBSG, 2013

Internet Business Solutions Group

Executives Are Driving Most of Current BYOD Productivity Gains

Internet Business Solutions Group

Source: Cisco IBSG, 2013

N=1,663 BYOD respondents

IT Is Provisioning Executives; Provisioning of Knowledge Workers Is Less Frequent

61% 62% 61%

Source: Cisco IBSG, 2013

Getting Strategic: The Comprehensive BYOD Concept

Internet Business Solutions Group

Nearly Three-Quarters of BYOD Respondents Have Only Basic BYOD

Source: Cisco IBSG, 2013

N=1,679 BYOD respondents

Reality check 1-2 3-5 6-8