IBM Deal Gives Apple Immediate Enterprise Computing Cred

A Trefis finance research analysis commenting on the landscape-altering deal Apple inked with IBM on Tuesday says that while Apple has been successfully increasing its presence in the enterprise space, largely through the addition of business-oriented features to its iOS platform, the new IBM deal will bring to the table IBM’s decades of experience in understanding the needs and tastes of business customers, and the advantages of Big Blue’s sizeable salesforce tailored to cater to large corporations working in Apple’s corner. Additionally, Trefis projects that availability of IBM’s apps and solutions on the iOS could give corporations a more significant incentive to deploy Apple devices.

The revived Apple/IBM partnership, moribund since the companies’ AIM PowerPC venture with Motorola fizzled out in the mid-’00s,will see IBM develop industry-specific apps and solutions for iOS devices, optimize its cloud services for the iOS platform and help with marketing Apple devices to the enterprise.

Trefis notes that while Apple’s iOS devices are already well entrenched in enterprise space, Apple has been seeking to increase its exposure to the enterprise space given slowing growth in both consumer smartphone and tablet markets, and observes that its efforts in aid of that seem to have been relatively successful thus far, pointing out that while Google’s Android mobile OS enjoys a significant lead over Apple in the consumer market with a market share of over 70 percent, the situation is quite different in the enterprise space, citing IDC metrics showing that the iPhone accounted for around 82 percent of smartphones deployed at U.S. corporations and about 36 percent globally. The iPad accounted for about 73 percent of tablets in use at U.S. corporations and about 39 percent globally.

Image Courtesy Apple

The report observes that the Apple-IBM deal synergizes the talents, resources, and marketing energies of two major players in the mobile and enterprise IT space, with a negligible competitive overlap, allowing them to uninhibitedly leverage each other’s strengths.

Writing for Seeking Alpha, Bret Jensen, Daily columnist for RealMoney at TheStreet.com, Editor for both a small cap and turnaround monthly newsletter at Investors Alley ( http://investorsalley.com), and who was Chief Investment Strategist (CIS) for S.A.M (Simplified Asset Management), a long/short hedge fund based in Miami, Florida from 2008 to 2011, says the new Apple/IBM partnership “could end up transforming the enterprise market.” He suggests that the companies’ collaborative development of an enterprise-friendly range of systems on tablets and smartphones has the potential to “upend how business gets done within the corporate structure and also furthers the BYOD (Bring Your Own Device) movement which already was accelerating.” Moreover, Jensen says with IBM will also now selling Apple devices as part of its corporate offerings (See below), and given the brand names within the partnership, the new venture should have no trouble with getting an audience with any corporate CIO in the country.

The Trefis report cites some of the key attributes of the deal and how they could help Apple:

– Industry-Specific Applications For iOS: The partners will jointly develop some 100 industry-specific applications for iOS, targeting specific business sectors such as retail, healthcare, banking, travel and transportation, telecommunications and insurance, and tapping the experience and knowledge of IBM’s 100,000 strong domain and industry consultants and developers to tailor these new iOS apps to specific needs. Trefis projects that this strategy has potential to make Apple’s devices a more integral part of corporate computing infrastructures, potentially displacing desktop PCs and laptops for certain typical business use-cases in turn potentially increasing the volume of iPad sales to enterprises.

Image Courtesy Apple

Optimized Mobile Platform: The deal is expected to optimize IBM’s MobileFirst platform for iOS, providing services including workflow and cloud storage, fleet-scale mobile device management and crucial security functions, with IBM’s end-to-end solutions complimenting Apple’s own security and device management features on the iOS platform, thereby providing Apple with another competitive edge over Google.

IBM Will Sell Apple Devices To Businesses: Inder the new deal IBM will sell the iPhone and iPad to its business customers, combined with packages of apps and other services. This will enhance Apple devices’ credibility in enterprise space thanks to the cachet of IBM’s long track record of selling to business and international customers, and relieving Apple from having to recruit and train its its own enterprise sales force,

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