The Big Honking Business-as-Usual IBM-Apple Deal
Jul 17, 2014 7:00 AM PT
The news that Apple and IBM have joined forces sent a shockwave through the Apple-focused world this week, and I admit it, I was surprised. At first glance, the deal seems to be this big group hug with the two companies becoming inextricably entwined.
Yeah, it's not that.
Upon closer inspection -- despite the fluffy and vague announcements put out by IBM and Apple, and some vague-yet-fancy landing pages on their websites -- the scope of the deal, which is characterized by IBM's "MobileFirst for iOS" initiative, is incredibly simple.
In fact, this is the biggest deal that really isn't all that "BIG" that I've seen in a long time. It seems groundbreaking -- and it will pay off handsomely for both Apple and IBM -- but it's really just an extension of business as usual for both companies.
The No Big Deal
So how can a partnership be a big deal but also be business as usual? That is, how can Apple and IBM become partners in this world and not fundamentally change? I'll try to explain how I see this shaking out.
It's a big deal because it will help sell more Apple devices and cement Apple's position in the enterprise. That's it. More sales means less room for Android and Windows encroachment. This deal is a low-risk tactical move to sell more existing products and hammer boards over the enterprise door to keep competitors out.
While Apple is already in the vast majority of the Fortune 1000 companies, it doesn't have a good reputation for playing nice to enterprises or listening to their concerns and demands -- especially when it comes to planning.
I don't think this deal is going to change that; however, this deal will mitigate Apple's lackluster reputation for IT support by letting IBM shoulder most of it. IBM has a great reputation for IT support and for listening to its largest customers. If IBM customers believe they can count on IBM to make sure their Big Data and cloud-based applications function flawlessly on their shiny iPads, it removes one element of doubt surrounding Apple in the enterprise.
As part of the partnership, Apple will offer a special AppleCare for Enterprise support service. How will this differ from existing AppleCare Professional Support services? Probably not much. Why not? The AppleCare for Enterprise service is just 24/7 telephone support. IBM will be responsible for on-premises support services.
So IBM gets to continue to support its customers directly around the world, plus gets to offer a new IBM MobileFirst Supply and Management service that includes device activation for iPhones and iPads -- with leasing options, which is handy for accounting purposes for enterprises. (By the way, nowhere does this offering seem to imply that IBM will service iOS devices exclusively, which means you can bet that IBM will help out with Android or Windows devices if its customers want it to.)
Business as usual.
IBM Don't Need No Apple
In fact, IBM already develops apps for mobile use on iOS. Why does IBM need an Apple deal to continue to do that?
Answer: IBM doesn't truly need Apple. However, a partnership with Apple lets IBM use Apple's name to help market its new line of enterprise analytics. A partnership with Apple lends IBM some sexiness -- some of Apple's mojo.
The C-suite already prefers to use iPhones and iPads. This partnership makes it just a little easier for enterprises to acquire iOS devices through its IBM channel rather than dealing directly with Apple -- or supporting iOS through the original backdoor BYOD channels.
Apple, in fact, has slowly and surely continued to build and improve on its enterprise device management capabilities. Apple has a big reference site for developers called "Reinvent your enterprise with iOS." Where is IBM on it? Answer: Nowhere.
As an extension of the ability to sell its own apps to its enterprise customers, IBM says that its IBM MobileFirst Platform for iOS will deliver the services required for an end-to-end enterprise capability -- from analytics, workflow and cloud storage to fleet-scale device management, security and integration.
Enhanced mobile management includes a private app catalog, data and transaction security services, and a productivity suite for all IBM MobileFirst for iOS solutions. In addition to on-premises software solutions, all of these services will be available on Bluemix, which is IBM's development platform on the IBM Cloud Marketplace.
IBM easily could have accomplished all of that without announcing a special partnership that included PR photos of Apple CEO Tim Cook walking beside IBM CEO Ginni Rometty.
The most interesting element of the Apple-IBM partnership is this nugget: The companies will collaborate to build IBM MobileFirst for iOS Solutions -- a new class of made-for-business apps targeting specific industry issues or opportunities in retail, healthcare, banking, travel and transportation, telecommunications and insurance, among others, that will become available starting this fall and into 2015.
IBM has been building these sorts of apps for vertical industries for years. Does the company really need Apple to do it? No. The question is, how much will Apple really collaborate here?
I'm guessing Apple will collaborate only on making sure that Apple builds in the appropriate security and device management hooks needed to make enterprise mobile management a secure breeze.
Apple would have done much of this anyway, eventually, but a formal agreement has the potential to open a door for Apple to hear what large enterprises around the world truly care about.
IBM Is Not Changing Apple's Core
The reality is that Apple doesn't have to do jack to let IBM put more focus on its devices. This deal doesn't mean that IBM is going to change Apple's core operating principles or values as a company.
Apple will be able to build whatever the heck it wants -- and IBM will get to sell it directly and talk about it and market it directly, too. This isn't so different from an iPhone commercial you see on TV that actually was produced by AT&T or Verizon. It's just another revenue stream that comes through a business relationship -- like Apple with cellular service providers.
Business as usual.
The only potential downside is if IBM makes Apple seem stodgy in the process, which seems unlikely since most consumers don't pay attention to IBM marketing anyway. It's targeted at adults who work in businesses.
The best potential side effect of this deal could be that third-party app developers who aren't trying to write the next viral Flappy Bird game actually can create an interesting business app and gain some sales into businesses they might not have been able to get into as easily. Big deal? Not yet, but it has potential.
Except, Might IBM Be a Slippery Slope?
There is a chance, however, that IBM will start to represent a seriously large customer base for Apple. Along the way, IBM may be able to influence Apple to create changes in hardware and software to better serve this large customer base.
At some point, Apple might be weak and build (or not build) something in order to preserve multimillion dollar accounts. It could be a slippery slope for Apple. The competition is getting better, and consumers are fickle.
The business world is littered with companies that struggled to hold onto major revenue streams rather than innovating -- previous tech darling Microsoft tried to hold onto and protect Microsoft Office revenue for years, "enhancing" the suite into a mess that customers started rejecting.
Once you open the door and let a massive company into your house, it's hard to reject all its interests and money. Throw in a pessimistic Wall Street with a failing Apple stock price, and the pressure could become unbearable to ignore -- maybe even for Apple.
But hey, this risk exists only if the integration of this partnership is actually as tight as the initial marketing wants everyone to think. From what I can tell, it's pretty loose and leaves Apple off the hook for delivering anything more real than its logo.