Apple-IBM news

Apple fashions 'brilliant' partnership with IBM for instant enterprise cred

Co-opts IBM's reputation, global reach in deal to sell iPhones and iPads, build industry-specific mobile solutions for big biz

Tuesday's deal between Apple and IBM was "brilliant," one analyst said, while others called it a huge win for the former, which now gets into the enterprise through the front door rather than having to sneak in through the back.

"This is a very big deal for Apple, which just outsourced a high quality sales, support and service organization in the likes of IBM," said Frank Gillett, an analyst with Forrester Research. "What's brilliant about this is that it lets Apple preserve its focus, but partners on a large scale with someone who can totally represent them in the enterprise."

The Apple-IBM partnership was announced with joint press releases and an interview on CNBC with CEOs Tim Cook and Ginni Rometty, after the stock market closed. The deal, which is exclusive, will meld IBM's big data and analytics capabilities with Apple's iPhone and iPad.

IBM will sell the Apple devices; craft more than 100 industry-specific enterprise solutions that will include native apps; optimize its cloud services for iOS; package device supply, activation and management services; offer financing and leasing plans; and provide on-site support to customers. Apple will handle telephone support with new AppleCare options designed for enterprises.

"It's huge, it's landmark," Cook said in the CNBC interview. "This is all about transforming the enterprise."

"This is all about unlocking mobility in the enterprise," countered Rometty.

Analysts applauded the deal, and generally saw Apple getting more from it than IBM.

"Apple has gained tremendous traction with enterprises, but it's primarily the result of end users bringing the devices in, and only secondarily from CIO or IT initiative," said Charles Golvin, formerly with Forrester, but now the principal analyst at Abelian Research. "This deal changes that, and as a result adds enterprises to the other forms of investment -- monetary, informational, temporal/experiential, social -- that secure loyalty to the Apple ecosystem."

Several others also pointed out that while Apple has made large inroads into enterprises, first with the iPhone, then with the iPad, it did that through the figurative back door as employees brought their devices to work and first demanded support from their companies' IT departments, then access to the corporate digital infrastructure and the information stored there.

"This is all about Apple getting into the enterprise," said Patrick Moorhead, principal analyst at Moor Insights & Strategy. "Apple has market-owning strategies in the consumer space, but it's not been able to convert that into strategies for the enterprise. Now Apple has an advocate in the enterprise."

"It legitimizes the iPhone and iPad as business tools," echoed Ezra Gottheil of Technology Business Research. "This really says to IBM customers, 'If you want to be able to get to the big back end with mobile, Apple is the one. IBM will provide a complete solution.'"

That argument -- that IBM has promised an end-to-end solution on integrating mobile with corporate systems and services already in place -- is what made the deal, from Apple's perspective, so enticing.

"As a one-stop shop, I can think of only one that could do that, and that's IBM," said Forrester's Gillett.

But Gottheil called out another reason Apple did this with IBM, rather than another major technology player -- a Hewlett-Packard or Dell -- for instance: IBM doesn't sell devices any longer, and has zero footprint in the consumer market, where Apple excels. "They don't conflict in any way, shape or form," said Gottheil. "There's no collision, there's no conflict, it's all upside."

The experts were split on whether the partnership would result in a major uptick in iPhone and iPad sales, but most agreed that Apple will benefit in other ways. "From a brand perspective, IBM is all about the enterprise, so this says, 'Apple is ready for the enterprise,'" said Moorhead.

Perception, in fact, was one area where Apple will come out smelling sweeter. "This should give a nice boost for IBM but is a considerably bigger deal for Apple, maybe more for the changed perception," said Gottheil. "The idea is that Apple must now be a real business vendor if IBM is building for you and selling for you. Little Apple has just grown up."

"There's a big perceptional element to this," agreed Moorhead. "Apple's not the corporate standard. But IBM has credibility there, it's known for the enterprise, so the perception will be, 'If it's good enough for IBM, it's good for everybody else,'" Moorhead added, perhaps intentionally echoing the old phrase, "No one ever got fired buying IBM."

Not all were willing to say that all Apple got out of the deal was a newly-burnished reputation among business customers. "It's more than perception. Apple will now be easier for businesses to do business with," argued Gillett, who cited the enterprise-necessary experience that IBM brings to the table, especially its global reach in sales, service and support for Apple's hardware.

The analysts did have concerns, however, ones that might not be addressed for some time.

"IBM can do the first part, sell the iPhone and iPad, falling out of bed," contended Gillett. "But can IBM deliver on the promise of unique app experiences for IBM software products? Tying these devices to this wonderful infrastructure is a tall order, and will take time to prove out. Apple wins regardless, I think, but it wins much bigger if IBM comes through with what they promised."

Moorhead, too, had unanswered questions. "How will things change at Apple for longevity of support?" Moorhead asked. Microsoft has a 10-year support cycle for its operating systems, he noted, while Apple's is, well, undocumented.

The timing of the deal -- Cook said that the partnership had been in the works for two years -- also stuck with some of the experts.

"I think Apple has been much easier to deal with since Cook took over," said Gottheil, referring to co-founder and former CEO Steve Jobs' known ambivalence -- and that may be putting it kindly -- toward corporations as customers.

Historically, Apple has been at best a minor leaguer in business, with its Mac often limited to startups, small firms, or design departments in larger organizations. The iPhone and iPad changed that to a large degree, but even then no one has made the mistake of saying Apple was all about "productivity and platforms," the latest mantra of its rival Microsoft.

Yet Jobs might have struck a deal with IBM as easily as did Cook, countered Gillett. Apple has changed in the last three years, and Jobs was, if anything, a pragmatist. "The scale and ambition that Apple has achieved now, I think Steve would have done the same," Gillett said.

By striking a deal with IBM, Apple has gained enterprise credibility overnight, the analysts agreed, and put it in a market where Microsoft, and to a lesser extent, Google, dominate.

"Apple increases its business presence, at the expense of Android, Windows, and Blackberry," asserted Gottheil.

"Android has struggled in enterprise, for security and other reasons, but resistance has diminished recently by dint of Samsung's Knox and efforts by Google," chimed in Golvin. "This raises the bar significantly for Android."

Tim Bajarin of Creative Strategies went further than that in tallying the damage to Google.

"This is not good news for the Android crowd," Bajarin wrote on Techpinions after the Tuesday announcement. "Google, and especially Samsung, had been on a course to try and get more Android devices into IT. However, this Apple/IBM deal will make that very, very difficult now."

Microsoft may not come out unscathed either. "This will also have an impact on Microsoft's quest to make Windows 8 tablets and smartphones the de facto standard in IT," he said, referring to a Microsoft strategy that has thus far met with little success. "That would have been a tough thing to do even if Apple and IBM had not gotten together, but it will be even more difficult for them to gain a lot of ground now."

And as for the talk by Gottheil and Gillett about Jobs? Bajarin had his take, too.

"I suspect Steve Jobs has a big grin on his face up in the sky," Bajarin said.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at  @gkeizer, on Google+ or subscribe to Gregg's RSS feed . His email address is

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