Apple / IBM – Juicy fruit.

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Alliance is just a first step in addressing the enterprise.

  • Apple and IBM have announced an exclusive partnership that will make iOS devices a much more realistic option for an enterprise when purchased through IBM.
  • For Apple, this means that IBM will encourage its customers to use iOS devices ahead of anything else for mobile when buying its software and data analytics offerings.
  • For IBM, it means that desirable hardware will now be optimised to run its software and services to give superior performance when compared to competitors.
  • To date, iOS has been predominately a consumer based offering and its penetration into the enterprise has been driven almost exclusively by its desirability to users in their personal lives.
  • For IT departments, managing and securing these devices has been a problem which is only now beginning to be solved by the likes of Good Technologies, MobileIron, AirWatch, Microsoft and so on.
  • I suspect that IBM will get much greater access to iOS functionality than is normally allowed to software developers and this will allow it to deepen its functionality on these devices.
  • This could include:
    • First: Removal of the limitation that prevents distinct apps. from sharing data with each other.
    • This would allow different enterprise apps. running on the device to share data with each other meaningfully enhancing their functionality.
    • Second: Deep integration of IBM software will allow the enterprise to control the devices to a much greater level of detail than other device management platforms.
    • Third: IBM apps will now be optimised for iOS meaning that they run more efficiently and consume less battery life.
    • Users should also see a meaningful improvement in performance, stability and reliability.
  • This is positive for both Apple and IBM but this is very far from a deal that will ensure that Apple will become the enterprise mobile device of choice.
  • iOS in the enterprise is predominantly driven by users buying their own devices and then getting the IT department to make them work as best they can with their infrastructure.
  • This deal goes some way towards making that much easier for the enterprise, and especially for IBM customers, but huge pieces are missing.
    • SAP. SAP runs the key operations of a very large number of the biggest companies in the world.
    • Hence, an enterprise offering needs to be working well with SAP systems to have wide ranging appeal.
    • Microsoft: Microsoft’s exchange server is an integral part of the communications infrastructure of most companies.
    • Microsoft has plans of its own when it comes to offering devices and services to corporates.
    • Oracle. Oracle runs the databases of many companies and again, integration with Oracle is going to be needed to have a deep and rich offering for the enterprise.
  • Consequently, while this is undoubtedly a good step forward for both Apple and IBM, it is very far from a killer blow that will ensure that Apple and IBM will romp home taking the enterprise for themselves.
  • This deal is certainly negative for Blackberry which is trying to orchestrate a recovery around its offering for the enterprise and has most to lose.
  • It is also negative for the other hardware makers like Samsung and Microsoft who are also targeting the enterprise for mobile device and service sales.
  • However, there is so much more to the enterprise than IBM and Apple that much more needs to be offered to really change the existing status quo.
  • The key to the enterprise will be offering users a series of services within which they can fulfil all of their professional duties in an easy, fun and secure user experience.
  • This is what Radio Free Mobile refers to as the Digital Work Pie which will be the subject of future research publications.
  • This deal is just the first broadside in a battle that is likely to be fought with increasing intensity over the next 5 or more years.

RICHARD WINDSOR

Richard is founder, owner of research company, Radio Free Mobile. He has 16 years of experience working in sell side equity research. During his 11 year tenure at Nomura Securities, he focused on the equity coverage of the Global Technology sector.