By the end of the first quarter of 2015, Apple and IBM will have delivered 22 apps through the MobileFirst for iOS alliance. The apps target the banking, retail, insurance, financial services, telecoms, governments, airlines, healthcare, energy and utilities industries.
Apple and IBM say they are on track to hit (and perhaps surpass) their objective of 100 apps by the end of 2015. The aim of the alliance – announced on 15 July 2014 – is to develop enter- prise apps, for iPads and iPhones, with cloud services that use IBM’s big data and analytics capabilities.
Talking to analysts in February 2015, Apple CEO Tim Cook said more than a dozen enterprise customers had signed on as foundation clients and claimed the list of new customers was expanding rapidly. For its part, IBM confirms it had seen strong customer interest and described the partnership as “another example of how we are helping enterprise clients transform their business models and sources of value”.
The original announcement of MobileFirst took many in the industry by surprise although, in retrospect, it is a perfectly logical step for IBM and Apple to take.
Notwithstanding the track record of previous alliances between the companies that have ended with a whim- per rather than a bang, on the surface it looks like a winning combination of IBM and Apple’s respective strengths in enterprise and mobile.
At the time of the announcement, analyst Forrester Research published a paper suggesting the alliance could have far-reaching consequences.
“Apple’s partnership with IBM brings together a top enterprise player with a top digital player to create something new – an enterprise digital platform. This changes the technology landscape fundamentally – the worlds of enterprise technology and consumer technology are joined,” it said.
Forrester argued Apple was gaining access to the global enterprise market via IBM’s experience, focus and commitment to enterprise clients without finding itself in Microsoft’s situation of being beholden to technology managers when making updates. For its part, IBM would be able to “offer intuitive consumer technology that employees and developers demand, with support policies, financing terms, and management services that enterprise buyers find acceptable”.
Mobile-first for enterprises
Speaking eight months later, Forrester vice-president and principal analyst Ted Schadler says the involvement and commitment of high-level IBM and Apple executives to the project shows how important mobility is to enterprises. “Mobile is the biggest thing to happen to companies since the web, maybe bigger,” he says. “It’s embedded in how people work, buy and operate.”
As the author of a book on the subject of mobile, The Mobile Mindset, Schadler believes that “doing mobile well is hard, it’s not just about putting an app in someone’s hands, you have to make changes in the operating model”. He argues that mobile is “where the heat and energy are in the market right now” and the alliance helps both companies to boost their presence there. “Apple has no desire to build applications and every desire to sell tablets and smart- phones,” he says. “With the alliance, it’s not going to incur the cost of doing that while IBM can go back to existing and new customers and sell a mobile system.”
Anne Cave-Penney, alliance director at Capgemini UK, says many enterprises “are thinking increasingly mobile-first, with both devices and applications, and this partner- ship will enable IBM partners, in particular, to deliver innovative systems that meet the emerging needs of their clients”.
She adds that, although the partnership may have come as a surprise to the industry: “When you analyse the deal closer, it’s hard to see why this hasn’t happened before...the benefits of this partnership are far too big for both companies to have ignored.”
She says: “On the face of it, it’s a partnership that should work well, with each company bringing some- thing different to the table. Apple has always been about the user experience, whereas IBM can bring the security credentials that have made it so trusted in the enterprise world to the table.” Cave-Penney believes it is part of a growing trend “of big companies – such as Microsoft and Nokia, or Adobe and SAP – choosing to partner up, rather than compete against each other”.
Apple market penetration
John Delaney, associate vice-president of mobility at IDC observes that IBM and Apple “seem to be forging ahead with the alliance at a cracking pace” – but warns: “It remains to be seen whether they deliver on what said they would.” Nevertheless, he thinks the alliance is “a strategically important deal for both companies”.
From Apple’s perspective, Delaney says that, while the consumer market for iPhones has not reached saturation point, most people who can afford an iPhone have bought one.
“It will rely more and more for growth on enterprise and corporate procurement, so it has to make the high purchase price for the device more palatable,” says Delaney. Apple can achieve this by rolling iPads and iPhones up into systems and MobileFirst systems, inter alia, include Apple devices.
Jarmila Yu, international marketing director at Intermedia, says the first wave of systems delivered suggest the collaboration is an all-around win for both organisations. “IBM is clearly re-invigorated by its new association with the Apple brand,” she says, “while Apple gets direct access to the enterprise, a new market segment that could encourage larger businesses to buy more iPads with custom business software”.
She suggests both firms could “re- invent their businesses through technology to deliver tangible benefits to their customers and society”. Customers are “benefiting from the best of both worlds – IBM’s deep- rooted industry expertise in enterprise computing and its focus on social, mobile, analytics and cloud, plus Apple’s legendary user experience and excellence in product design”.
Pablo Suarez, vice-president & global leader, Banking and Financial Markets Center of Competence, IBM Global Business Services, describes the alliance as “profound for IBM, Apple and professions across industries”. He claims Apple and IBM “are putting workforce productivity and superior decision-making in the hands of business professionals” for the first time. The apps are being delivered “in a secure environment, integrated with all the core enterprise data and processes, and delivering the power of analytics to lift the proficiency of scores of business professionals”.
Addressing the issue of why this particular IBM/Apple alliance should succeed where older ones have unravelled, Suarez extols the virtues of MobileFirst.
“There is nothing in the market that comes close to the MobileFirst for iOS systems,” he argues. “Each app is addressing a specific pain point and opportunity seen across companies, across industries.” He says the partnership is about “bringing together the leading provider of the world class device and platform with the world’s largest services organisation with deep roots in the enterprise”.
Suarez highlights the role of a joint design team in Cupertino where IBM designers work with Apple experts. “This is a marriage between the amazing iOS user interface, integrated with the enterprise and analytics. This will change the nature of how work gets done by the business professional,” he predicts.
Limits to IBM mobility platform Not everyone is convinced. Jonathan Wharrad, business development director at Moki, is sceptical that the alliance is going far enough on mobile. He describes the focus on boosting employee productivity and automating workflows as “an excit- ing, yet limited, vision of the potential of tablets. We work with customers that demand innovative digital experiences and aggressive revenue growth to deploy, manage, secure and analyse customer-facing devices in their physical locations”.
Clive Longbottom, research director at Quocirca, says that, although “in theory it should be a match made in heaven”, the cultures of the two companies are far apart – and what each wants from the arrangement is different. “Although in essence they both want world domination, one is from a design/individual approach, the other from an organisation/architecture one,” he says.
The alliance with Apple gives IBM a mobile platform to provide devices to access its cloud-first strategy, something which has been missing since it sold the ThinkPad reins to Lenovo. “It is not in a position to suddenly launch a range of Power-based tablets and laptops to do this. It could have gone with Lenovo – but wanted something a bit different. IBM has failed to see the massive rise in Android and still believes Apple iOS will continue to rule for the foreseeable future,” Longbottom adds.
He agrees the deal will mean IBM can bring Apple into its accounts “not as a hardware sale per se, but as part of a system sell through GBS”. The problem will arise where Android and Windows “raise their ugly heads” because the customer decides a bring-your-own-device (BYOD) approach has to be adopted.
“IBM then has to decide whether to say ‘Nay – thou shalt use Apple!’, ‘Yea – thou shalt pay through the nose for customer apps’ or ‘Bugger – we need to port everything to every- thing at our own cost.’ (I doubt the last one will be an option),” he says.
That assumes enterprises view Android as a suitable platform, a view likely to be challenged from a number of angles. In its briefing note published in the wake of the IBM/ Apple announcement, Forrester argued that, although there were more Android devices in the market than iOS devices, “the Android eco-system is fragmented between Google, Samsung, Amazon, LG, ZTE, and many others. Apple’s iOS devices represent a more cohesive base for the industry-specific apps that IBM will design, develop, and test”. Schadler is even more scathing today. “Android is an also-ran,” he says. “No design excellence comes out of Android.”
What’s in it for the channel?
Whatever the merits of the IBM/ Apple alliance when pitted against Android or Windows, the view seems to be that it could be beneficial for the channel. Cave-Penney at Capgemini says IT managers and CIOs aren’t looking for a one-size-fits-all system any more. They want to be able to pick and choose. “This is where the big partnerships come in and where the opportunity for the channel lies,” she argues. “Each company has its own strengths and, with the cloud, it’s never been simpler to integrate and manage different services from multiple suppliers at once. As the partnership between two of the biggest names in the world comes to fruition, the channel will be assessing how it can benefit from the deal. With IBM and Apple involved, there should be plenty of scope to expand sales opportunities.”
Suarez claims IBM partners “are excited about the possibilities of the alliance with Apple”, and what partnership will mean for clients seeking to transform their businesses with mobile technologies. “IBM is committed to fostering an ecosystem of developers, business partners including ISVs, startups and academia around our offerings – as demonstrated by Bluemix and the IBM Cloud marketplace,” he says.
IBM will be able to enhance the offerings for IBM Business Partners that want to exploit iOS capabilities “to help their enterprise clients, including SMEs, radically streamline and accelerate mobile adoption”. Suarez adds that MobileFirst for iOS “will be available for IBM Business Partners as a best-in-class platform to build, deploy and securely manage custom systems and apps that deliver value to their clients”.
Longbottom isn’t convinced. “I doubt IBM’s channel partners will be rushing to embrace this – there is very little in it for them,” he comments. “Margins on Apple equipment will be marginal: the apps will generally be IBM-provided. Anything that the partner wants to build on top will require a strategic project led by IBM to be in place in the first place.”
Yu at Intermedia thinks the deal will have a much wider effect. “The technology industry will also profit from this alliance, as it will undoubtedly encourage adoption and create more opportunities for other players (vendors and channel partners) operating in and around this space,” she says. “Initiatives like this are inspirational, and it will be fascinating to watch this unfold over the next few months. Also, time will tell if other technology vendors adopt a similar alliance-style approach to deliver increased value to their customers.”
Cave-Penney believes the trend for alliances will continue “as the industry reacts to the news, rivals such as Samsung, Microsoft and Blackberry will plot their response. Will they allow IBM and, more crucially, Apple to dominate both sectors? That is the exciting prospect we have on our hands”.