Apple recently claimed customers had downloaded 75 billion apps from its iTunes App Store.
Google, not far behind, announced Android users had downloaded 50 billion apps from Google Play.
That’s a stinkin’ ton of downloads.
And it should be, as there are a ton of apps to choose from. Google Play has an estimated 1.3 million apps available for download, while Apple’s App Store has 1.2 million.
You see, back in 2008, when Americans began the gradual switch from old cell phones to app-slinging smartphones, a whole economy of mobile applications sprung up practically overnight.
Lucky developers found that with relatively few resources, they could build a blockbuster application that would catapult them into the ranks of the Silicon Valley elite.
It was an app gold rush.
Today, the market is mature, and after hundreds of start-ups tried and failed to become the next hot app, it’s much harder for a company to break through.
To succeed in the app economy today, developers need a lot more tools.
And this is just for apps aimed at consumers!
For many years, enterprise technology has been transitioning to mobile. As businesspeople began to do an increasing amount of work on their personal mobile devices, it became a major challenge to find out how to integrate a personal smartphone into a company’s IT infrastructure.
Now that the transition has matured, the enterprise sector is enjoying growth in mobile apps as well, and now there’s a whole world of mobile applications just for enterprise, presenting us with continuing opportunity.
Fortunately, we can look at what developers need in both the consumer and enterprise sectors and invest accordingly.
These needs can be broken down into three major categories:
First and foremost, an app has to do what it’s supposed to do. That requires code.
Second, it has to have a monetization strategy in order. That requires leadership and a relationship with a payment service of some sort.
Third, it has to provide a solid profile of its users and their habits to maximize user engagement. That requires analytics services.
This third element — data analytics — is what we’re going to talk about today. It has proven to be a wild and exciting area for investors over the last couple of years, and in the last week, it has seen some major action that you need to be aware of.
The action comes in the form of three separate developments: an IPO, an acquisition, and a new app.
The IPO
On Friday, San Francisco-based software company New Relic went public, launching on the New York Stock Exchange under the symbol NEWR.
As the third Silicon Valley company to go public last week, New Relic put up 5 million shares at $23 per share in anticipation of raising over a $100 million. By midday, the stock had popped about 30%.
The debut price was above the proposed prices from early December, and the pop showed the promise of NEWR as a stock.
What does the company do?
It makes analytics software that manages the performance of web-based, software-based, or mobile applications. It collects, stores, and analyzes information that application developers want to know about their users: how they’re interacting with apps, how the user is experiencing the app, and so forth.
New Relic’s APM (Application Performance Monitoring) has been deployed in more than 4 million applications of all different types. It’s designed to be flexible enough to monitor apps in different languages (Java, Ruby, .NET, PHP, Node.js, Python), hosted in different configurations, and across different backends.
New Relic Mobile, the company’s analytics service for mobile apps, has been integrated into big-time mobile apps such as Sony’s streaming movie service Crackle, dating app Grindr, Angie’s List, and Kickstarter.
Back in October, New Relic made its very first acquisition — for a mobile analytics dashboard called Ducksboard. That app could display data from software such as Salesforce, Zendesk, Google Analytics, and 62 other applications.
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The Acquisition
Detroit-based analytics software company Compuware (NASDAQ: CPWR) was just acquired by private equity firm Thoma Bravo. The acquisition was first announced back in September and was valued at approximately $2.5 billion.
Shareholders of the company will receive an aggregate of $10.75 per share — a much higher value than the stock has held recently.
This is an important acquisition because it significantly changes the assets held by the company. Its web, cloud, mobile enterprise, and big data performance management business — known as Dynatrace — has been growing much faster than the company’s old mainframe computer business.
Compuware announced that it planned to split the two businesses apart after the acquisition deal closes, leaving the Compuware name with the declining computer business only.
If you had been considering an investment in CPWR, it’s best to let that one languish in the discount rack.
The New App
Last week, Apple (NASDAQ: AAPL) and IBM (NYSE:IBM) debuted their first jointly developed cloud analytics suite for iPhone and iPad applications.
Called IBM MobileFirst for iOS, the suite is available to enterprise customers who want to utilize big data analytics for their large-scale mobile applications. Some customers using the suite already include Citi, Sprint, Air Canada, and Banorte.
The importance of this partnership cannot be understated: It unites the ultra-popular device maker with the long-running data infrastructure giant to aggressively tackle a problem that’s been inherent in enterprise mobility.
Specifically, it narrows down the choice of devices by offering exclusive access to IBM’s powerful backend services.
Because of this, more than 100 industry-specific apps are being developed exclusively for iPhone and iPad.
These three developments, all touching enterprise mobile app analytics, represent major movement in the sector.
Do not sleep on that side of the business.
Good Investing,
Tim Conneally
For the last seven years, Tim Conneally has covered the world of mobile and wireless technology, enterprise software, network hardware, and next generation consumer technology. Tim has previously written for long-running software news outlet Betanews and for financial media powerhouse Forbes.
