Apple and IBM Storm the Enterprise

The news Apple and IBM have joined forces to deliver a powerful new business approach to the enterprise is the shot heard round the IT world. This global deal, where IBM in essence becomes a VAR (value added reseller) for Apple and includes IBM porting more than 150 of their IT apps and tools exclusively to iOS for use in full native mode, will give IBM more tools in their mobile arsenal as well as provide Apple a stronger foothold in the enterprise — beyond anything they could have ever imagined. Even though Apple’s iPad represents 73% of tablets in the enterprise and the iPhone also has a substantial position in IT, this partnership with IBM helps solidify that iOS is the OS for business tablets and smartphones and gives them a huge edge over their competition.

These IBM tools include MDM, security, and integration with all types of back end systems as well as powerful analytics and the ability to provide a lot of new services over the next 18 months to their customers as well as Apple’s IT buyers. While Apple will handle the 24/7 phone and cloud support, the deal calls for IBM to handle on-site service as needed. Think about this for a second. The big knock on Apple is they were not seen as being serious about the enterprise. Now they have a worldwide sales force and support organization to take the iPad and iPhones directly to the customer as well as provide the tools, back end integration, security and support for just about any IT operation anywhere in the world.

This is not good news for the Android crowd. 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 and, if the deal works as designed, it could pretty much upstage any opportunity Android devices have in any future enterprise programs. This will also have an impact on Microsoft’s quest to make Win 8 tablets and smartphones the de facto standard in IT. 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 with Windows 8 mobile devices in IT now.

This doesn’t mean Win 8 or even Android devices will be locked out of IT. Indeed Google, Samsung, Microsoft and other tablet and smartphone makers will still try and gain ground in the enterprise with what they offer today and in the future. However, this IBM/Apple partnership, with its hardware, software, IT tools and services will make it tougher for them to compete directly in accounts Apple and IBM will attack together.

In a meeting with Apple and IBM officials, it became clear both companies are excited about this partnership and, more importantly, are committed to making it work. The stakes are high for both of them. For IBM, a commitment to iOS allows them to become even more responsive and creative in how they deliver total solutions for the enterprise. For Apple, it assures iOS devices aimed at the enterprise will gain more traction and help keep them well ahead of the competition for many years to come.

This is a big deal. I have worked on IT projects that included IBM sales and services over the years and they have a world class organization that garners great respect within the enterprise. In fact, they invoke a level of trust in IT that is tough to beat. IBM’s endorsement of iOS and the devices that use it speaks a lot to how much they respect Apple’s technology and are willing to stand behind these products as part of their major IT solutions programs. Given the power and clout of both companies, I suspect this will become one of the most important and powerful tech partnerships we have ever seen.

There is great irony in this announcement. IBM started the PC revolution and Apple tried to play David to IBM’s Goliath when Apple introduced the Mac. That time, Goliath and its clones won. In fact, early IBMers discounted Apple’s original Apple II. Later, IBM was convinced they could beat Apple’s Mac once it hit the market. Of course, IBM and the clones dominated the market for decades and only recently has Apple really gained major ground in the PC market. However, the iPad and iPhone were game changers for Apple and the industry and now the company that created the PC revolution is coming full circle by partnering with Apple. More importantly, by embracing Apple’s iOS products and making them a strategic part of their enterprise programs, it actually brings them back into the client business — a business they sold off to Lenovo almost a decade ago. I suspect Steve Jobs has a big grin on his face up in the sky.

Published by

Tim Bajarin

Tim Bajarin is the President of Creative Strategies, Inc. He is recognized as one of the leading industry consultants, analysts and futurists covering the field of personal computers and consumer technology. Mr. Bajarin has been with Creative Strategies since 1981 and has served as a consultant to most of the leading hardware and software vendors in the industry including IBM, Apple, Xerox, Compaq, Dell, AT&T, Microsoft, Polaroid, Lotus, Epson, Toshiba and numerous others.

95 thoughts on “Apple and IBM Storm the Enterprise”

  1. If the partnership flourishes. IBM and Apple could claim that they are about making corporate people more productive, thereby, borrowing Microsoft’s new strategic byline.

  2. “There is great irony in this announcement. IBM started the PC revolution and Apple tried to play David to IBM’s Goliath when Apple introduced the Mac.”

    Tim, you were there, Apple had something very like the PC with the Apple II which predated the PC by some time 1977 to 1981 I believe. The original PC was basically the Apple II in design, processor, keyboard, monitor, expansion slots – ok different processors – but the David & Goliath thing started well before the Mac.

    1. i was going to point out the same — IBM didnt start the personal computer revolution. imo that award goes clearly to Apple, who popularized PCs w/ the Apple II, bringing the PC out of the kit world and into the mainstream.

  3. Remember Google’s IO announcement about integrating Samsung’s KNOX into Android L to make Android more appealing to business? Haha. 🙂

  4. This is going to be BIG. If they play their cards correctly, this could mean the end of Microsoft as we know it. It will also hurt Google. And will finish BlackBerry (already semi-dead).

    IBM and Apple stocks could both thrive IF they can make this partnership work, which it should, because it calls on the strengths of both. No need to make a dramatic strategic shift for either of them. This will benefit both the enterprise user and the consumer, as new applications with higher value could appear at a reasonable cost.

    For Apple, this will also benefit the Mac’s in the enterprise, not only the iOS devices.

    The timing is also good, a few months before the release of iphone(s) 6, a new ipad and possibly other rumored products. Also enough time to get into the end of the year budget exercise of the corporations. 2015 looks like an explosive growth year for Apple (and IBM).

    1. I agree. The thing is that the more I think about this deal it does feel like it is more about keeping Google out of the mobile Enterprise along with finishing off BlackBerry. The Microsoft angle could be interesting as it will more than likely mean that Microsoft will put in to a box and stay on the desktop in the Enterprise. Sure they are going to sell some Surface Pro 3’s but I am sure this deal will impact those sales as well.

      1. Google, maybe, but I don’t think Apple spends half a second of its waking existence thinking about Blackberry.

        1. This is true. I was just making a point about this deal having an affect on Blackberry as well.

    2. “(T)his could mean the end of Microsoft as we know it”

      We’ve already seen the end of Microsoft as we know it. The old Microsoft (Windows, Office, 95% monopoly position) is terminal. The only question is what they’re becoming.

      1. It sounds like Microsoft is fighting back based on that recent rambling letter from Satya Nadella and actually willing to change. We should see them sell off the unrelated consumer junk like XBox etc. soon, and wind down the focus on consumer desktops altogether.

        Personally, I think Google will end up picking up the “cheap consumer desktop” market as they won’t really have anywhere else to go.

    3. To me, this is about a thin IOS client that will be used for an expanding list of enterprise apps that communicate with IBM cloud servers. But, the same [very popular] devices will also be able to run personal apps. I don’t see this as a Mac win directly into enterprises. The combined solution looks very good though vs. a MS PC or Google Chromebook.

      1. With Hand Off and Continuity, maybe there’s a bigger Mac angle on this than you are thinking. Especially for a manager whose direct reports are using IBM-iOS devices.

      2. With the current state of the PC market, selling a few percent more Macs when the only thing saving the Windows market is trickle updates of now orphaned XP machines is a win. Even if it only drives iPhone and full-sized iPad sales, those are Apple’s two highest margin devices.

    4. Concerning Macs replacing Window boxes in the Enterprise, I have my doubts. Maybe on some upper level employee desks. Cheap is the watch word for the computers for the drone mass of employees. Too bad if it doesn’t work well. it’s cheap! The company saves money! The don’t look at TCO, the IT crowd sees to that!

    5. “this could mean the end of Microsoft as we know it” — because… what does this have to do with MS?

  5. In Apple’s press release, they use the work “exclusive” many times. Do you know what this means specifically? Will HP, DELL and other enterprise vendors try to forge a similar deal with Apple?

    1. Nope.

      The thing that makes the deal great is that there’s no overlap between the two companies. Michael Dell would rather gouge his eyes out than be an order-taker for Apple, and HP, who could probably benefit from abandoning the PC market altogether and specialize its servers and service offerings for Macs & iOS, are too stupid to realize it.

      1. Maybe…

        One thing that I’m concerned about is that although IBM is strong, it is not the only game in town. To address the whole enterprise market, Apple is going to have to deal with quite a number of vendors/consultants, which I don’t think Apple really wants to do.

        I envision two scenarios;

        1. Apple directly manages enterprise vendors/consultants (including DELL, HP). Apple might need to invest in a rather large channel management team for this.
        2. Apple could delegate enterprise sales/consulting to a primary partner company. Secondary sales/consulting partners will have access to Apple products through this primary partner only. This approach will simplify channel management for Apple, but they will not have direct control. Under this scenario, DELL, HP and others will directly partner with IBM, and only indirectly with Apple.

        What I would like to know is which route Apple intends to take. Hence the importance of “exclusive”.

      2. The question is if this deal is truly successful and HP and Dell find themselves in a position where there is no choice but to distribute Apple products, how will the current contract with IBM restrict their options?

        Also, if Apple decides that IBM alone is not sufficient to meet their goals, can they expand to other enterprise vendors/consultants?

    2. I don’t think exclusivity means much in terms of whether HP, Dell et al. will be providing iOS support. They can always write iOS apps to help their Enterprise clients if they see demand. I don’t think IBM will get access to many proprietary APIs if any. It would be significant if IBM were to work on iOS while abandoning WP and Android. I doubt IBM would make such a commitment, so I expect “exclusive” in this press release to have as much meaning as “premium”.

  6. Wow. I did not see this coming. I knew Apple was getting serious about the enterprise, but this is another level. This should certainly put a crimp in the ‘Apple isn’t for business users’ meme.

    1. NYT reports the two companies have been working the venture for several months. Doubling down on secrecy said Tim Cook.

      1. Seems to have worked. Of course the proof is in the pudding, but this has massive potential.

  7. My first thought was – Swift.
    And how, or if, that will tie in with this development.
    I can’t see how it could stand apart, or be unrelated.

    1. Swift will allow IBM’s service software developers to rapidly create custom vertical Apps for their customers. Their customers would in turn buy more Apple hardware and IBM big-iron.

    2. There’s no doubt everything in this WWDC is strongly related to this announcement and of course at apple, this has been in the works for many years. Another of Steve’s “one more thing…” whammys that no one saw coming. So many things in the pipeline. Interesting timing, coming right after Satya’s burning platform ramble. I expect panic is beggining to set in for real in Redmond.
      I also suspect google now sees a light at the end of the tunnel they’ve got lost in, except it will be an iLight. In front of a freight train.

  8. From a business point of view, no comment. I don’t know. I suppose time will tell.
    I’ve been calling Apple an unwanted IT department for a couple of years now. (unwanted by me and my ilk)
    This article is submitted for consideration of my point.

      1. My ilk are users that want to be autonomous over the control of their device.

        Who I am doesn’t matter, the ideas stand on their own or they don’t. That’s what’s up for dissussion. Not me.

  9. Things take time. Tim Cook said that he started talking with IBM two years ago. It sounded like Apple has been working for 6 to 9 months to make iOS 8 have the features necessary to make this deal work. We tend to measure things from the time of their announcement, but we must remember that the products we will enjoy this Fall were born in the imaginations of Apple’s engineers as long as 4 and 5 years ago.

    1. Thats right. Another good example of Apple working on a project for years has been the Swift and Metal programming languages. No one outside of Apple saw that coming. I am sure the same is true with their dealing with many other businesses and products that will become clear over the next couple of years.

    2. Right! No US business holds to its long-term vision more successfully than Apple (in this they are like the Chinese who are the best at implementing long-term plans).

  10. This is indeed a fantastic new for Apple.

    Now let’s wait for Google and Microsoft to answer back with their own partnership.

    1. Google and Microsoft? Not a chance they will partner up. Nobody in their right mind would partner up with Microsoft. IBM no doubt still smarts over OS/2 and the massive betrayal. (Just like the Massive betrayal of Apple when Microsoft got Macs to develop Word and Excel for the Mac and ripped the Mac OS off instead for Windows.

      Now the two scorned partners are back together (remember Pink and Taligent?) after the PowerPC kerfuffle and are ready to turn Microsoft into Blackberry. I can hear the buzzwords flying in the MS CEO’s office now!

      1. Pink. Yes, I do remember it. Most people only know the name. I was studying computer science back then, and I was desperately curious about Pink. But it was so hard to find any concrete info about it.

        I finally read an article by someone who got a demonstration of Pink by one of its engineers. The idea of Pink was that the object-oriented nature of the OS would allow great power in very compact code. Pink was supposedly very compact. The engineer showed him how to do a simple app. He was subclassing this that and the other, just trying to make a GUI. That’s when the guy writing the article knew the idea was doomed. Simple things were too hard. Meanwhile, NeXT was making an OS where simple GUIs could just be wired together. Everyone was electrified.

        And so maybe both serve as instructive. Pink was a failure because the idea was good but the execution was poor. And NeXT was a failure because the idea was good and the execution was good and sometimes you still can’t get your toehold because someone else owns the market.

      2. Microsoft, Apple, and IBM are now all totally different organizations with only really Microsoft having any vestiges of their past corporate culture (and even less if Nadella plays the game everyone thinks he will).

      3. I can’t imagine anyone “teaming up” with google either, the wannabe ms. I wonder how much longer ms will matter.

  11. I’m amazed at the many commentaries on this news which are somehow trying to give it a negative spin or saying it’s just not that big of a deal.
    This is HUGE. Before this deal, there was still a slender sliver of a crack in the door for Android and MS to get into mobile IT solutions. This deal slams it shut and provides a massive moat around iDevices in the enterprise. I don’t see any possible response Google can make except maybe offer HP a truckload of $$$ to come up with competing solutions for Android. And MS simply doesn’t have the mobile device/apps penetration to offer a competing solution.
    And comparing Cook’s memo to Nadella’s memo is a contrast of real leadership in action to a cesspool of corporate-speak unicornisms.

    1. I am a huge fan of Apple. But this doesn’t slam the door on anybody, until it actually does. It doesn’t work out for Apple, until it does. This is a very exciting development. Apple under Steve Jobs showed that the way to beat MS was not to make them lose but to find another way to win; so it’s always possible for someone to beat Apple in business by outflanking them; this certainly makes it harder to outflank Apple in business though… so long as it actually works. But there have been a lot of products and plans that looked great on paper… and then nobody actually wanted them (sometimes if you build it, they still don’t come). I hope this winds up being a great play for both companies and more importantly for the marketplace. Time will tell.

      1. Hard to see how this venture won’t work–virtually everything necessary for success is already in place–the hardware is there, the apps are there and the support network/trained personnel/logistics are there. Not to mention the demand & interest from Fortune 500-type companies and the people who run them.
        It definitely is not the aspirational rainbows & unicorns gobbledegook we heard from MS this past week. It’s like Apple just opened 2000 new Apple stores inside the headquarters of the richest clients imaginable with the flick of a pen.
        I guess HP or Oracle could combine with Google or Samsung or something but I don’t see even that remote possibility as a remote possibility.
        And besides, this reminds me a bit of the AppleTV–there is no downside, no great risk, no expensive development costs, no new tech that has to be invented, no new employees to assimilate nor buildings to buy/build/rent.
        I don’t see any downside to this move and it could easily result in complete dominance of mobile IT by Apple/IBM.

        1. I have some catching up to do. I spent the last week in eastern Europe, where the internet sucks. I only heard about the news out of Microsoft. I’ll need to read it. It apparently was pretty lame.

          But I wasn’t saying this wouldn’t work. I’ve just heard people declare winners and losers so often in tech, just on the basis of an announcement. Sometimes you don’t see why something won’t work, except in hindsight (whereas in the case of the iPhone, a lot of silly people couldn’t see that it WOULD work, except in hindsight).

          1. If you can read Nadella’s entire memo without going catatonic, you’re a better man than I. But you also might wake up several days later and not remember your name.

        2. The apps ARE NOT there yet. That is what IBM has announced they will do – port current tools to iOS.

          1. Maybe 150 IBM apps aren’t ready yet, but IBM seems to have at least a couple dozen apps in the app store, along with a truckload of IBM developer podcasts & ebooks. IBM has clearly been headed this direction for a while and already waist-deep in the iOS ecosystem. I doubt they’ll have a problem finishing those 150 apps within the next 12 – 18 months.

    2. IT departments purchase computers based on price and by using some flimsy justifications about security. User experience and ease of use is almost never part of the equation. The cheapest computing device with the specified size screen and the ability to run a few apps deemed necessary (SAP client, MS Office etc.) wins the contract. I just don’t see this arrangement changing that dynamic, so large companies will keep using mid range laptops or cheap tablets. IT may graciously allow you to check your email and calendar on your iPhone if your CEO insists. Some may even give iOS version of ERP client app, if they exist, access to the corporate database or let you download some MS Office files to your own iPad, but that is more or less the best case scenario i can see.

    3. Show me a single large enterprise that wants to buy mobile devices for their employees and are 100% iOS. Just one.

      1. I don’t know about 100% but Lowe’s bought 40,000 iPhones. And then there’s Hyatt, United Airlines, RehabCare, Standard Chartered Bank, MTR Corporation, Mayo Clinic, Bechtel, Pepsi, GE, Siemens, Continental Airlines, Grupo BBVA, etc. These are corporations with 10s of thousands or even over 100K employees. Does every employee need an iPad or iPhone? Nope, but often we’re talking about distributions of >10K devices.

        Sometimes they used for new applications and sometimes they are replacing PCs.

        This article is from 3 years ago–and the IT/PC wonks were whining just as much as they are with this new announcement.

      2. Medical device leader Metronic has developed more than 175 internal iOS apps deployed to more than 16,000 iPhones. Nestle has deployed more than 25,000 iPhones; NASA has more than 26,000.
        Pad in the enterprise: Qantas has deployed more than 15,000 iPads; Sweden has deployed more than 100,000

  12. Too be truly devastating deal

    1. IBM would use Swift in their server apps, this means open sourcing
    of Swift.

    2. Mac Pro is supported in the Services and Support and Apps.

    3. IBM apps need really excellent Apps which IBM doesn’t do well.
    They can create according to customer spec but that just means
    bunch of Indian writing crappy unmaintainable code until the contract
    runs out but now has to be shifted to Cloud.

    PS exclusivity seems to be only that IBM cloud apps that will
    be designed for iOS will be exclusive and cannot be ported.

    1. IBM doesnt need to use Swift on their backend at all. swift is for the devices. IBM can continue to use whatever they want, and thats the beauty of it for them.

  13. Great article, but I would make one little correction to the last paragraph: Goliath and its clones didn’t win — rather, Goliath was handily beating David when the clones came up and clobbered both of them. When the smoke cleared, Goliath was as much a loser as David, and the de facto steward of the clones (Microsoft) was the only real winner.

    1. Goliath was much more the loser. Goliath had to leave the field. David is still doing very, very well in that field. Goliath was just enough of a Goliath that he was able to make good by doing other things well. The analogy gets strained so let’s drop it. Apple makes a ton of money making its Macs. It didn’t win the market share war, but it makes a lot more money than they guys who “won” that war. IBM wasn’t making money doing PCs like they were making money doing other things, so they sold their PC business. So worshiping at the church of market share gets people only so far. Microsoft was indeed the main winner in that war. I seem to remember a statistic that at one point they got 6 out of every 10 dollars spent in the computer world (so long ago now; it was probably late 90s when I read that). But they doubled down and then quadrupled down on Windows, and everything that didn’t serve Windows and Office was bent to do so or dropped… and they missed the idea that those two powerful fronts could be outflanked (kind of like the French and the Maginot line to pick another historical military analogy). Apple outflanked them with the iPod and then the iPhone and then the iPad and created hugely lucrative markets. Google is outflanking MS on search (ads) and Android (in the latter case by doing MS itself had once done: copy Apple and license).

  14. This whole thing is an IBM publicity stunt. The financial analyst community is pretty unanimous that this pact will have very little impact on either company’s sales.

    It also defies common sense.

    1) The shift to BYOD is a reflection of enterprises not wanting to pay for mobile phones for employees. This announcement is the exact opposite of BYOD.

    2) If you accept the shift to BYOD (which means employees are bringing in both iOS and Android devices), then the idea that IBM is going to push iOS exclusive apps doesn’t work either.

    3) MDM solutions on the market are doing very well accommodating enterprise IT.

    1. “The financial analyst community is pretty unanimous that this pact will have very little impact on either company’s sales.”

      Is that the same financial analyst community that continually gets pretty much everything wrong when it comes to Apple? Seriously, they’ve got a terrible track record and have proven time and time again that they do not understand Apple at all. Apple seems to confuse them greatly.

      “2) If you accept the shift to BYOD (which means employees are bringing in both iOS and Android devices”

      I think it’s mostly iOS devices that people are bringing to work. Android doesn’t seem to have much of a presence in the enterprise. People like iOS devices and want to use them in business. Long term I suspect this will have a significant impact on iPads in the enterprise.

      1. Seeing everything “analists” say publicly is always 180° wrong (apart from Dediu and the TP team), they must all be pooping their bunched up panties.
        I’m looking forward to Horace’s take on this.

    2. You DEFINITELY Sound ” Henchman of VILLAIN ” LOL.

      Looking at The Ugly & Fishy Movement of AAPL Yesterday, What You’re Saying Seems to Stand for The Cover-Up & Justification of VILLAIN’s Stock Market Maneuvering, Especially ENGINEERING Stock Price of AAPL.

      ” The Financial Analysts & Pundits ” You Refer = ” Lackey of VILLAIN ” in Wall Street

    3. The “financial analyst community” isn’t “pretty unanimous” that water is wet or the sun will rise in the East. Not only do buy-side and sell-side analysts have fundamentally different motivations, even buy-side guys can’t agree on much beyond “never use your own money.”

  15. What Apple needs to do now, as in ASAP is create thin clients or very cheap work stations that will replace the Dell computers on most of the business worlds desktop.

    1. WHY is the world would Apple do that? There’s, literally, no upside to “thin clients or very cheap work stations”, for Apple at least. The whole point of this deal is to sell a few more high-margin devices, Mac or iOS, in places Apple, traditionally, never made much effort.

    2. I’m fairly sure the rumored iPad Pro is going to do something along the lines of what you’re proposing. Even today’s iPad Air is displacing a lot of traditional PC usage, and with the right apps that’s happening in the enterprise as well. I don’t think Apple will make a cheap work station, not in the way you’re thinking, but Apple can do a lot with screens and hubs. Should be interesting.

  16. Looking at the potential end-to-end result, perhaps Siri will become the voice of Watson. The implications between the two are huge.

  17. This partnership is huge in a negative way; It’s a bad deal for what it mans to be Apple. Will we continue to be delighted by Apple products after they become closely associated with the drone jobs that we hate? If not, then the inborn loyalty consumers have toward them will deminish, making the iPad, iPhone, iMac, and any other Apple device into just another product competing for our attention. No, this deal is good for Apple’s growth in business but it will not be good for the consumer space.

  18. This alliance probably never would have happened under Steve Jobs leadership. Good to see Tim Cook breaking out from the Jobs model to move Apple forward.

    1. I would agree with you from perspective of as recent as pre-iPhone-Jobs. But post-iPhone, Jobs was around as Apple made iOS improvements exactly for enterprise reasons such as Exchange support. I think if this partnership can be made without undermining Apple’s focus on the end user, it would make as much sense to Jobs as it apparently does to Cook.


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