Mideast app market promising: Service2Media

The Middle East will likely be one of the world’s fastest growing markets for mobile applications in the coming years as companies aggressively adopt this technology into their operations, according to executives at Dutch firm Service2Media.

Geert Kolthof, the company’s Chief Executive Officer, says a growing number of enterprises in the region have began to recognise how apps can improve interaction with their customers and even promote cost-effective business processes.

“The apps industry as a whole is growing very fast. The Middle East [to start with] was a little bit behind from the rest of the world, but [it] is now catching up very quickly and that’s why [it is] now seen as a fast growing market with respect to apps,” Kolthof said.

Globally the mobile application sector is expected to be worth $15.1 billion (Dh55bn) by the end of 2011, according to estimates released in January by technology research firm Gartner. Other market analysts have also projected a bright outlook for the worldwide app market.

In a survey published last December, International Data Corporation (IDC) predicted that the mobile apps industry will generate $27bn by 2013 and $35bn by 2014. The industry is anticipated to continue its upward trend in the coming years as companies seek ways of monetising apps and redefining their business models.

Asked how companies can monetise their apps, Service2Media’s Kolthof said many have began selling consumer apps through various mobile application stores such as those operated by Apple, Nokia and BlackBerry.

Some companies, according to IDC, have also rolled out in-app purchasing where users can buy additional content within an app, a trend that is becoming popular and will likely challenge established app stores.

Service2Media’s CEO said apps could also introduce cost-reduction methods for companies. Citing its recent partnership with Dutch insurance company Interpolis, Kolthof said they developed a free-to-download app, which allows customers to apply for damage claims faster, easier and without the need to even visit a claims office.

“[Customers] can use the app to fill out and submit the application form. It saves the company money because they don’t have to [allocate manpower] to re-type all those customer information. There are certainly a lot of business cases to make with apps,” he said.

One app, many platforms

As a unique selling point for their customers, Kolthof said Service2Media – which operates their Middle East offices in Abu Dhabi and Dubai – said they have the capability to design an app that can be deployed to any mobile device, regardless of the handset’s operating system.

“We are not just an app maker. We have a technological platform that makes it possible for us to design the app once, and deploy [that same app] to all handsets. It proves to be a cheaper and more attractive offering for customers’ apps since it doesn’t require designing apps for separate devices. We also make sure that the apps work with the back offices, for instance in the banking and financial services, which have complex integration processes,” he explained.

Lisette Sens, Vice-President Sales of Service2Media, said the back-office service holds particular significance in this region, which has seen its internet penetration rate skyrocket in recent years.

“Because this region followed a little bit later with the whole internet to the digitalization [process], by now you could see that some of these back-office engines are not quite ready to be taken to the mobile [platform]. So while that has been going on, mobile applications [meanwhile] are being brought to the market. There’s a lot of work done behind the scenes, specially [in the enterprise level] to make their content and services ready to be pushed to mobile devices,” she said.

Sens added that Service2Media, which offers multi-platform Arabic language support, obtained a $10-million financing from Prime Ventures in June.

“Part of that money is actually going to be invested in this region out of [our Dubai sales office]. Some will go into [research and development] to make our platform even more suitable for supporting the Arabic language,” she explained.

Kolthof mentioned that the fund will initially benefit the Middle East market, but will also be used in expanding their business in the United States.