Opportunity knocks for small companies in mobile computing market

By Marjorie Censer
Monday, February 7, 2011

About a year and a half ago, Ashburn-based SteelCloud, known for building computers and firewalls, decided to focus on the mobile computing market.

The company sold off its hardware manufacturing division and came up with an appliance that makes the BlackBerry server secure enough to meet Pentagon standards. Now, the company says it has gained a foothold in this kind of work; it was even mentioned by name in a Pentagon policy document on BlackBerry use.

As the government increasingly focuses on mobile computing, smaller, local companies say the newness of the market has lowered the barriers to entry. These companies, even faced with larger competitors, are rapidly growing their pieces of the pie.

"For vendors like us, there's lots of opportunity" in mobile devices, said Brian Hajost, president and chief executive of SteelCloud. "When you look at legacy technologies, you have big legacy technology [providers]."

Columbia-based BoxTone provides software and services that help government users manage their smartphones -- from making sure data is kept secure to guaranteeing reliable service. The company, which has more than 100 employees, already is managing 150,000 government mobile devices, including 17,500 at the Department of Veterans Affairs and 10,000 at the House of Representatives.

BoxTone was founded in 1999 but in 2005 refocused its business on mobility services, mostly in the commercial market. As the company saw public sector mobility spending begin to surge, it responded, founding a separate government-focused practice in late 2009, according to Brian Murphy, vice president of the practice.

"When there's such a disruption in the marketplace, I think it does create opportunities for new companies that take a fresh perspective on a problem and [aren't] encumbered with the existing technology, the existing approaches," Murphy said of BoxTone's ability to break into the industry.

He said the company's small size makes it nimble and customer-focused enough to make sure users are satisfied, helping it build new business.

Despite being small, "we've been able to create a brand," Murphy said. The company is in a "very small niche kind of area, but that niche is growing very quickly [and] we are one of the go-to companies in the space."

Mobile device management is drawing companies of all sizes, said Phillip Redman, a research vice president with Gartner. As more smartphones enter the market, commercial and government users need help making sure transmitted and stored data is kept secure, he said.

"It's wide open because it's still such a new market," Redman said. "Right now, it's more of a real estate land share grab [but] the [companies] that are today executing well are the ones that are going to build a base up."

As mobile devices play an increasingly important role in the government, Hajost expects SteelCloud's work in the sector to grow significantly over the next six months.

"We're almost a 50-50 split between commercial and federal," he said. "I think that's going to change."

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