WHEN he was the boss of Apple, Steve Jobs made little secret of his contempt for selling to big businesses. Once he even referred to their CIOs as chief information “orifices”, through which all orders must pass. Jobs felt that the best way for Apple to prosper was to focus on the consumer. But his successor, Tim Cook, has struck a much friendlier tone about corporate buyers, regularly boasting that Apple’s products are now used by almost all of the world’s largest companies.
They could soon be in use at many more firms. On July 15th Mr Cook and Virginia Rometty, the boss of IBM, said their companies were working together to develop more than 100 business-specific mobile applications for Apple’s iPhones and its iPad tablet computers. IBM’s employees will also serve as a sales force for Apple’s gear inside firms and provide on-site service for its devices.
The case for defence
- Late starters
- An irresistible urge to merge
- A new home for orphans
- Big Blue Apple
- The elephant in the atmosphere
- Rated “P” for persistent
- Little things that mean a lot
The deal does more than bring together two companies that were once bitter foes: in the 1980s Apple’s advertising for its Mac personal computers portrayed Big Blue as an evil Big Brother figure. It also underlines the way in which devices developed for consumers have caught on in the corporate world. And the alliance piles pressure on other technology companies, from Apple’s rivals in devices and mobile operating-systems to IBM’s competitors in supplying software and services to businesses.
The rise of smartphones and tablets—and people’s desire to have one device for both business and personal use—has created a new market for corporate gadgetry and apps. Lots of companies have their eye on it, but none has conquered it. BlackBerry, a Canadian firm once synonymous with the corporate smartphone, has been swept aside by the demand for devices made by Apple or powered by Google’s Android operating system.
Despite the trend for people to bring their own devices to work, those corporate information orifices still have plenty of say. John Delaney of IDC, a research firm, says that the proportion of European companies saying they do not intend to let staff use their own devices has stabilised at around 40%. At the same time, some IT departments that have clung to BlackBerry—still the “gold standard” in security and device management, says Mr Delaney—are seeking alternatives.
One firm likely to be discomfited by the alliance of Apple and IBM is Microsoft (which was expected to announce big job cuts as we went to press). Its software is almost ubiquitous on corporate desktops, but it has been slow to adapt to a world of mobile workers. Its boss, Satya Nadella, is determined to fix this and said so in a long memo to staff on July 10th. Its mobile operating-system, Windows Phone, is a distant third behind Android and Apple’s iOS. A recent upgrade to Windows Phone introduced features that should make it more attractive to companies than older versions were, says Mr Delaney, but the deal between Apple and IBM will be a blow.
Google and Samsung of South Korea, the biggest maker of Android smartphones, which has been pushing into the enterprise market, will also have to get a move on. To overcome worries about Android’s security, Samsung has built a system called Knox into its devices. Last month Google said that it would embed the software elements of Knox in the next version of Android, which should help the operating system as a whole.
Thanks to the sheer popularity of its devices, Apple was probably better positioned than either Microsoft or Google and its allies already. But IBM’s distribution network and prowess in areas such as big-data analytics will give it an extra edge. The deal will allow Apple to focus mostly on making gadgets with consumer appeal, while ensuring corporate sales are not neglected. This matters now that businesses and governments spend $11 billion a year on iPads alone—about a third of Apple’s tablet sales, estimates Forrester Research.
An alliance with a strong consumer brand helps IBM, which has reported year-on-year declines in revenue for the past eight quarters. It also means that IBM’s rivals in supplying complex IT packages to big companies, such as Hewlett-Packard and Fujitsu, have some thinking to do. How much thinking may depend on how tight the relationship between Apple and IBM (where Mr Cook began his career) eventually becomes. Big Blue’s rivals may have to pursue similar deals—if not with Apple, then with Microsoft, Google or even BlackBerry. The scramble for corporate tech dollars has entered a new phase. Apple and IBM have given themselves a good chance of emerging on top.
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