Recently, Apple made headlines by signing a major partnership with IT giant IBM. The deal will see IBM create a cloud-based mobile device management (MDM) system, as well as 100 industry-specific apps for iPhones and iPads.
The partnership between Apple and IBM should come as little surprise.
Firstly, for a number of reasons – including those I discussed last week – smartphones are shifting from being consumer devices to essential business tools. In just this past week, figures were released showing 57% of enterprise app developers earn at least $500 per month, compared to just 26% of developers for consumer apps.
The second reason is defensive. With smartphones increasingly becoming business tools, Apple is at a natural disadvantage in the marketplace. Where rivals such as Google, Microsoft, BlackBerry and Amazon have always had a strong enterprise focus, Apple has traditionally been a consumer-focused company.
In the MDM market alone, for instance, the partnership will compete against a range of established products, including BlackBerry BES, Microsoft Intune, and Samsung Knox. BES already has an established base supporting Android devices, iPhones and iPads, while Google has announced Knox is set to be integrated as part of Google’s forthcoming Android L operating system. The growing importance of MDM for businesses is a topic I discussed in an earlier column.
Apple and IBM’s victory is far from certain
So is victory assured for Apple and IBM against these established players, as some commentators have predicted? There are a few reasons I think it’s far from certain.
Apple and IBM have partnered in the past – in competition with Microsoft, no less – and the results have been mixed, to say the least. For example, the companies co-developed Taligent, a successor to OS/2 that failed as a replacement for Mac OS. Then there was Kaleida, the co-developed multimedia platform that flopped.
The best-performing product co-designed by Apple and IBM was the PowerPC line of processors, which powered Apple’s Mac computers from the mid-90s through to 2006. But in the end, Steve Jobs himself abandoned them in favour of Intel’s processors, out of a growing frustration at their excessive power usage and poor battery life.
Needless to say, when Microsoft co-founder Bill Gates was asked to name one thing that surprised him, he said “Kaleida and Taligent had less impact than we expected”.
Microsoft under Satya Nadella will be a tough competitor
Meanwhile, over at Microsoft, new chief executive Satya Nadella has begun executing a new strategy that has enterprise-based cloud computing services at its core.
Instead of just being tied into Windows devices, most of Microsoft’s cloud-based services are designed to be cross-platform and be used from any device, including those running Apple iOS or Android. You will find most of Microsoft’s cloud-based apps – from Office 365 to clients for Dynamics and Azure to OneCloud – in both the iTunes app store and Apple’s Google Play.
This strategy is in stark contrast to Apple’s. There are few (if any) Apple apps in the Google Play app store for Android or in Microsoft’s Windows store.
If the Apple-IBM partnership apps are limited to iPhones and iPads, they will lack the cross-platform capabilities of most of Microsoft’s cloud products. This becomes a problem in many businesses, where staff use a mix of Apple, Android and Windows devices.
Likewise, IDC recently revealed enterprise resource planning (ERP) and customer relationship management services (CMS) make up a majority of cloud spending worldwide. Aside from its own Microsoft Dynamics products, Nadella has already signed key deals with CMS market leader Salesforce and ERP market leader SAP, effectively integrating them into Microsoft’s cloud platform.
The 100 industry-specific apps promised as part of the IBM-Apple partnership will have to compete for adoption against already established industry leaders such as Salesforce and SAP. Clients for these apps already work for iOS and Android devices – powered by Microsoft’s cloud infrastructure.
One of the more interesting cloud-based technologies IBM has released lately has been its Watson machine learning platform, which famously defeated a human opponent on a 2011 episode of US game show Jeopardy!
However, here too Microsoft has an answer, in its Azure ML platform, which is entering into public preview this month. And, like most of Microsoft’s cloud-based products, including Office 365 and Dynamics, Azure ML doubles as a development platform for third-party apps.
A tough market for Apple and IBM
For a number of reasons, from cross-platform support to partnerships with key enterprise software developers and the ability to develop third-party apps, Microsoft will be a tough competitor for the new Apple-IBM partnership.
Add in a number of other established competitors – from Google to Amazon and BlackBerry – and victory in the business smartphone market is anything but assured for Apple and IBM.
And as the competition heats up, ultimately, business customers will be the winners.