Best Practices Award Template

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New Product Innovation Award, Mobile Traffic Optimization North America, 2011

Frost & Sullivan’s Global Research Platform

Frost & Sullivan is in its 50th year in business with a global research organization of 1,800 analysts and consultants who monitor more than 300 industries and 250,000 companies. The company‟s research philosophy originates with the CEO‟s 360-Degree Perspective™, which serves as the foundation of its TEAM Research™ methodology. This unique approach enables us to determine how best-in-class companies worldwide manage growth, innovation and leadership. Based on the findings of this Best Practices research, Frost & Sullivan is proud to present the 2011 North American New Product Innovation Award in Mobile Traffic Optimization solutions to SEVEN Networks.

Significance of the New Product Innovation Award

Key Industry Challenges

The mass adoption of smartphones has placed a significant burden on wireless networks. As a result, heavy data traffic and signaling has overwhelmed these networks, challenging the traditional data management strategies adopted by mobile carriers. This situation will continue to worsen as smartphone adoption continues, more applications are developed, and mobile devices find wider application ranging from location-based services to mobile video. The proliferation of mobile gadgets and unprecedented growth in networking requirements for a mobile ecosystem has introduced certain limitations from an implementation and adoption standpoint.

Network Congestion

The combination of intelligent, data hungry smartphones, end-user behavior, and overloaded networks leads to congestion, which directly affects a subscriber‟s experience. One significant part of network congestion is the result of smartphones making frequent and often unnecessary connections to the network for applications like Facebook, email, Twitter, IM, weather, location-based services, etc. These applications can send hundreds of these requests daily, consuming significant network bandwidth and signaling resources, thus resulting in network congestion. Moreover, every time a device polls the network with no response, it has to turn on its radio drawing power and contributing to network congestion for nothing. Wireless carriers are discovering that congestion issues from all of these polling requests can have a bigger impact on their networks than high data throughput levels. It disrupts the end-user experience by decreasing the speed and consistency of connections and can even lead to a network „brown out‟, where no access to resources are available, crippling the network, operator, and users.

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Consumer Expectation is Set

Users expect the same experience on their mobile device as they are used to on their computer. Most consumers will not differentiate between the various networks they might need to connect to in the background to get to the information that they want to access. User expectation for real-time experience is inevitable, irrespective of the nature and capability of the communication network. This creates an incredible challenge for operators as any stakeholder in the mobile ecosystem, content providers, application developers, and device manufacturers can tap into the networks‟ limited bandwidth and signaling resources without any oversight from operators.

Smartphone and Mobile Device Proliferation

The accelerated growth in mobile data traffic is driven by a rapid transition from traditional feature phones to increasingly advanced smartphones. Faster networks and more elaborate applications targeting smartphones and mobile devices drive network demands. The resulting explosion of mobile data traffic forces mobile operators and device manufacturers to rethink the way they manage data services. Operators face growing pressures as network upgrades and related investments grow faster than related subscribers‟ data revenue, which affects their future margins.

Key Benchmarking Criteria for the New Product Innovation Award For the New Product Innovation Award, the following criteria were used to benchmark SEVEN Networks‟ performance against key competitors:

• Innovative Element of the Product

• Leverage of Leading Edge Technologies

• Value Added Features/Benefits

• Increased Customer ROI

• Customer Acquisition/Penetration Potential

Decision Support Matrix and Measurement Criteria

To support its evaluation of best practices across multiple business performance categories, Frost & Sullivan employs a customized Decision Support Matrix (DSM). The DSM is an analytical tool that compares companies‟ performance relative to each other with an integration of quantitative and qualitative metrics. The DSM features criteria unique to each Award category and ranks importance by assigning weights to each criterion. The relative weighting reflects current market conditions and illustrates the associated importance of each criterion according to Frost & Sullivan. Fundamentally, each DSM is distinct for each market and Award category. The DSM allows our research and consulting teams to objectively analyze each company's performance on each criterion relative to its top

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competitors and assign performance ratings on that basis. The DSM follows a 10-point scale that allows for nuances in performance evaluation; ratings guidelines are shown in Chart 2.

Chart 2: Performance-Based Ratings for Decision Support Matrix

This exercise encompasses all criteria, leading to a weighted average ranking of each company. Researchers can then easily identify the company with the highest ranking. As a final step, the research team confirms the veracity of the model by ensuring that small changes to the ratings for a specific criterion do not lead to a significant change in the overall relative rankings of the companies.

Chart 3: Frost & Sullivan’s 10-Step Process for Identifying Award Recipients

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Best Practice Award Analysis for SEVEN Networks

The Decision Support Matrix, shown in Chart 4, illustrates the relative importance of each criterion for the New Product Innovation Award and the ratings for each company under evaluation. To remain unbiased while also protecting the interests of the other organizations reviewed, we have chosen to refer to the other key players as Competitor 1 and Competitor 2.

Chart 4: Decision Support Matrix for New Product Innovation Award

Measurement of 1–10 (1 = lowest; 10 = highest) Award Criteria

Leading Edge Edge Leading

nefits

of of

of the Element Innovative Product Leverage Technologies Added Value Features/Be ROI Customer Increased Customer Acquisition/Penetration Potential Rating Weighted

Relative Weight (%) 20% 20% 20% 20% 20% 100%

SEVEN Networks 9 9 9 9 9 9.0

Competitor 1 7 8 7 7 8 7.4

Competitor 2 6 7 6 6 7 6.4

Criterion 1: Innovative Element of the Product

Optimization within the mobile ecosystem has seen a siloed approach with solutions optimizing end user behavior, application or device performance, and increase of bandwidth. California-based SEVEN Networks has devised an innovative approach that tackles the optimization problem from end to end, from the user and device to the network and the application. By utilizing software components on the mobile device and a cloud-based server, SEVEN Open Channel™ can optimize the way devices interact with the network and minimize their consumption of resources such as battery, signaling, and bandwidth that are in high demand within today‟s wireless networks.

The truly innovative element of this solution can be seen in its intelligence to connect to the network only when new updates are available. However, no connection requests are missed as the mobile radio is optimized for the constant monitoring of requests. While peer solutions demand significant alteration in the existing infrastructure, the transparency of Open Channel alleviates the need for any special integration.

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Open Channel positions itself uniquely by identifying and addressing challenges related to the operator network and mobile application access without consuming additional bandwidth. By optimizing performance and minimizing network requirements, Open Channel successfully boosts network performance while maximizing the operator‟s available network resources.

The company‟s excellence and capabilities are reflected in how it delivers this solution, which allows the mobile application to take advantage of the optimization, driving a reduction in signaling and data traffic in a world where operators have little or no control over the applications a user chooses.

Criterion 2: Leverage of Leading Edge Technologies

Leveraging on their technical expertise, the SEVEN Networks team addresses the network limitations in the mobile ecosystem in a flexible way. Using virtualized proxy and caching technology, Open Channel mediates the exchange of control information and content between the device and the network and it eliminates unnecessary mobile app chatter. Open Channel relies on both a device and server component, and it remains transparent to the transport protocol and the application optimization solution to work with all applications on a device. Thus, it requires no application rewriting, nor does it have to be built into new applications. The software resides on the handset and in the cloud acting as a virtual proxy, monitoring all data network transmissions to cache the control and data transfer requests. This capability to coordinate disparate network access requests and polling of all apps on a device offers SEVEN Networks a competitive edge over peer solutions existing in today‟s market.

Employing SEVEN networks‟ in-house intelligent push and structured polling Open Channel achieves intelligent data management to improve data delivery response and extend the useful life of existing network infrastructure.

This is significant because it means customers can deploy SEVEN Networks using their existing software and networking equipment. Additionally, Open Channel can help operators target heavily used services by delivering deep protocol knowledge so that the operator and service provider can tap into the SEVEN services via APIs to further optimize traffic for content delivery.

The flexibility, compatibility of Open Channel reflects SEVEN Networks‟ commitment to optimize the dynamic mobile ecosystem. With a rich patent portfolio, this product is backed with exhaustive proprietary patent protected technologies covering connectivity, provisioning and accessibility aspects of communication architecture, consistency of presentation, group oriented services, multimedia delivery, and the management of device battery life, content delivery, enhanced user experience, as well as network and traffic management. This stands testimony to SEVEN Networks‟ technological prowess in delivering in-house and high performance technologies to enhance wireless network capabilities.

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Criterion 3: Value Added Features/Benefits

A key benefit found with Open Channel™ is its ability to eliminate unnecessary signalling on the network. Open Channel eliminates the chatter out of mobile applications that constantly request connections to the network while no new information needs to be exchanged. Furthermore, it reduces the amount of transported data on the network by connecting the device to the network only when new updates are available. Thus, it reduces the amount of bandwidth utilized by connected applications. These two benefits are highly essential in the social computing era, where connection requests to social networking sites are very frequent.

Moreover, with the ability to coordinate the use of the mobile device radio, Open Channel monitors those requests that are made by applications to turn on the device radio and coordinates these to optimize the amount of signalling placed on the network. In addition to this, a real-time measurement of actual versus avoided traffic and signalling on the network could be determined through the Open Channel Dashboard.

Yet another advantage is Open Channel‟s compatibility and support for any networking technology. Its network independency makes the optimization solution work efficiently in a 2G, 3G, 4G, LTE, Wi-Fi or other kinds of wireless networks.

Real-time delivery of content, improved battery life, higher quality of service, and a better end user experience are some of the other benefits found with this solution. By optimizing network resource utilization across the entire mobile ecosystem, SEVEN Networks eliminates network congestion caused by geographic limitations, unpredictable user behavior, and network consuming applications regardless of a user‟s behavior or location.

Criterion 4: Increased Customer ROI

Open Channel software eliminates unnecessary requests and reduces the time the device is on the network by 40 percent without affecting user experience. With enhanced coordination of radio usage across applications and services, the radio turns on and of infrequently drawing less power from the device, thus extending battery life. As a result, there is an increase in battery life by up to 25 percent; this is without requiring changes in the existing network layout or applications.

An optimized and smarter utilization of mobile radio helps in reducing data traffic in the network by up to 70 percent. Additionally, Open Channel maximizes the ROI on network upgrades because it requires no changes to the network and is fully compatible with network upgrades, thus augmenting the return on other network optimization approaches and new standards for techniques like fast dormancy, which rapidly disconnects the device from the network once updates are sent or received.

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In addition to this, Open Channel can work in conjunction with new standards for fast network dormancy, smart signalling, and other network optimizations, further enhancing the value and longevity of these investments.

The higher return on investment delivered in comparison with other existing offerings in the market is captured and reflected by the ratings in the Decision Support Matrix (see page 5).

Criterion 5: Customer Acquisition/Penetration Potential

By taking control over the entire mobile ecosystem, Open Channel brings relief to operators that are faced with the increasing risks of network congestion brought by the accelerated adoption of smartphones and the proliferation of mobile applications.

Open Channel turns data explosion challenges into opportunities for operators, component providers, third party vendors, device manufacturers, carrier providers, and other players in the mobile ecosystem. By delivering enhanced performance through their core technology capabilities SEVEN networks gives stakeholders the option to maintain their unlimited plan structure, open their network to more applications, rather than apply restrictions. It also provides them the space and time to innovate faster by better understanding the behavior of applications and end users on their network.

Leveraging Open Channel™, operators can provide highly personalized services based on usage, and most importantly improve the overall user experience. With this innovation, the operator‟s choice to explore new business models in an effort to maximize the revenue is well supported.

Thus, Open Channel has the potential to change the economics of the mobile industry. This innovative solution enables operators to not only keep pace with the explosion of data traffic and maintain the quality of service, but it also enables them to support more subscribers on the same network infrastructure and improve their margins on data ARPU.

Conclusion

Open Channel maximizes the ROI by extending the battery life by up to 25 percent, reducing data traffic in the network by up to 70 percent and reducing device presence on the network by up to 40 percent. With a rich patent portfolio, SEVEN Networks‟ team addresses the network limitations in the mobile ecosystem and eliminates network congestion regardless of location or user behavior. Network independence, optimizing mobile ecosystem performance, real-time delivery of content, improved battery life, higher quality of service, and a better end user experience makes Open Channel a preferred choice over competing solutions. Based on Frost & Sullivan‟s independent analysis of Mobile Traffic Optimization solutions, SEVEN Networks is being recognized with the 2011 North American New Product Innovation Award.

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The CEO 360-Degree PerspectiveTM - Visionary Platform for Growth Strategies

The CEO 360-Degree Perspective™ model provides a clear illustration of the complex business universe in which CEOs and their management teams live today. It represents the foundation of Frost & Sullivan's global research organization and provides the basis on which companies can gain a visionary and strategic understanding of the market. The CEO 360-Degree Perspective™ is also a “must-have” requirement for the identification and analysis of best-practice performance by industry leaders.

The CEO 360-Degree Perspective™ model enables our clients to gain a comprehensive, action-oriented understanding of market evolution and its implications for their companies‟ growth strategies. As illustrated in Chart 5 below, the following six-step process outlines how our researchers and consultants embed the CEO 360-Degree Perspective™ into their analyses and recommendations.

Chart 5: CEO's 360-Degree Perspective™ Model

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Critical Importance of TEAM Research

Frost & Sullivan‟s TEAM Research methodology represents the analytical rigor of our research process. It offers a 360-Degree view of industry challenges, trends, and issues by integrating all seven of Frost & Sullivan's research methodologies. Our experience has shown over the years that companies too often make important growth decisions based on a narrow understanding of their environment, leading to errors of both omission and commission. Frost & Sullivan contends that successful growth strategies are founded on a thorough understanding of market, technical, economic, financial, customer, best practices, and demographic analyses. In that vein, the letters T, E, A and M reflect our core technical, economic, applied (financial and best practices) and market analyses. The integration of these research disciplines into the TEAM Research methodology provides an evaluation platform for benchmarking industry players and for creating high-potential growth strategies for our clients.

Chart 6: Benchmarking Performance with TEAM Research

About Frost & Sullivan

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