These giants are buying mobile app development firms. How will your company meet its mobile development needs this year--in-house, contractors, or something in between?
One of the most important strategic staffing decisions CIOs will make this year is deciding how to meet their mobile development needs. Most companies have leaned on specialist firms and don't have first-rate mobile dev skills in-house. Now they must decide if that approach will cut it as smartphone and tablet platforms become as indispensible as the Web in engaging customers.
The Financial Times decided that relying on a contractor isn't good enough and has acquired the Web app developer Assanka. The 12-employee Assanka worked with the FT to launch an HTML5-based, paid Web app this June for its financial news content, marking a major strategic shift toward the mobile Web and away from device-specific apps. In its report on the acquisition, MocoNews quotes an internal memo from FT CEO John Ridding:
“This is a unique opportunity to bring talented and very creative software engineers with proven skills in emerging web technologies into our team. It will further boost our momentum in digital journalism, help us improve our development processes and allow us to maintain our edge in this strategically important area.
Walmart just made a similar deal, buying the 13-person mobile development firm Small Society, led by Zachary Raven. Walmart has acquired several mobile and social companies in recent months, including Kosmix and Grabble.
Most IT shops won't go as far as Walmart and the FT by buying app dev shops, but CIOs need to make sure their mobile talent matches their mobile ambition.
Take Vail Resorts. It launched a breakthrough mobile and web app, EpicMix, last ski season that lets customers track the vertical feet they had skied and share those feats on social sites. This year, Vail is letting skiers post photos, taken by on-the-hill photographers, for free via Facebook and Twitter using EpicMix, spurring more social posts by its customers in the first month of the season than it had all last year. Vail CIO Robert Urwiler says the resort company will continue to lean on outside firms for major development work, but its success with EpicMix has led it to pursue and nurture more in-house mobile app dev expertise.
Another approach comes from AccuWeather, which had one of the first six apps written for the iPad and for years has been developing for smartphones. CIO Steve Smith has relied on roughly a 50-50 split between in-house and external mobile app dev talent. AccuWeather needs in-house talent because technology is inseparable from its existing and new products, but it will continue to tap outside developer firms, particularly for specialized and hard-to-fine skills.
Starbucks relies on outside firms for much of its mobile development, but it has created a separate business unit, called Digital Ventures, that sets the mobile platform strategy. For example, this holiday season it launched a "cup magic" app that let shoppers point their smartphone camera at a red Starbucks cup and see cartoon characters who ski, sled, or run. An outside firm, Blast Radius, developed the app, Starbucks’ marketing team spearheaded the concept and design, and Digital Ventures (led by CIO Stephen Gillett) helped navigate decisions such as whether cup magic would be a standalone app or a feature in Starbucks' existing app. Starbucks’ IT department works with Digital Ventures to decide which mobile and web app projects to outsource and which ones--like those tightly integrated with legacy apps--to build in-house.
Waste Management is doing cutting-edge Android-based tablet development, as it experiments with putting tablets in its trash trucks to provide drivers with route and collection information. But Android development talent is hard to find--virtually nonexistent for this kind of hard-core enterprise environment. Waste Management has hired people (and shifted some existing employees) with deep Java skills, only some of whom have mobile skills, and they've been rewriting custom apps to work on Android. Expertise is scarce in cutting-edge tech areas, but such initiatives can attract some hot shot talent and energize current staff developers.
Getting approval for new hires won't be easy in 2012. Our free Outlook 2012 research report shows that 39% of companies still have an IT hiring freeze or plan to cut people; 36% are only replacing open jobs; while just 25% are expanding staff. But as CIOs assess their talent pool, mobile has to be one of the factors they consider. Hire? Retrain? Outsource? Viable options, but the choice has to be a strategic one that matches business goals.