Apple Juggernaut, now with IBM

Lots of news from technology world over the past weeks and biggest of them was about Apple and IBMpartnership, exclusively for iOS devices.It is surprising and exciting to think how this could unfold opportunities for Apple and IBM. Let us be honest, Apple has services that could compete with Citrix, then the server business, business purchase programme, and so on. But as a company, Apple has a very minimal presence in enterprise market. Steve Jobs in one of the AllThingsD conferences said, “(In the consumer market) every person votes for themselves”. “If enough of them say yes, we get to come to work in the morning.” In the enterprise, he said, not so much. The people that use the products aren’t the ones that choose which products are used, and the people that make those decisions, Jobs said, “are sometimes confused.” Apple is all about simplicity, elegance, user experience, which are all very vital for consumer market success. The famous WinTel era helped Microsoft the push Apple out of the big enterprise business. However, ever since iPad launch, Apple has dedicated fair bit of resources that can help iOS device deployment in business organisations.

iOS and Android devices have redefined the word productivity. The person who is a data driven decision maker need not deal with large chunk of data anymore. Analytics is taken care by data experts, they put that in cloud and decision are taken using interpretation that can happen on four-inch handheld device. This made PC usage for back end big data analytics and devices like iPad for front-end decision-making. Steve Jobs’ another famous quote about PCis worth mentioinig here, “…PCs are going to be like trucks. They’re still going to be around, they’re still going to have a lot of value, but they’re going to be used by one out of X people.” If I am a fund manager looking to analyse, I need not sit in front of a PC, put 100s of thousands of data into spreadsheet, create my own charts, make complicated pivot tables to arrive at a dashboard. Rather these all can be done over the cloud and an iOS app like IBM Cognos Mobileor Numericscan handle my meetings with external clients as well as my internal analysts. I have written about how Microsoft Excel is no longer the only way out for productivity. Everyone exulted for Microsoft Office suite on iPad but I was not. Every software has been written for solving a problem, Apple had sold 200+ millions of iPads without an option for Microsoft office.

Apple has been emphasising on productivity through iOS devices for a couple years already, and touted 98% usage of iOS devices in Fortune 500 companies. However, big enterprise businesses had already invested in technology and processes already. Apple definitely enjoys fan following in consumer market but enterprise IT wouldn’t bother for one. The deployment of iOS devices calls for change in process of workflow as well as investment of financial and human resources. Most important of all, enterprises need support from other channel partners too, and this is exactly where IBMcan come into picture. They have an established presence in large enterprise business in various segments such as big data analytics and software services. Looking at the IBM Annual Report 2013, couple of things caught my attention:

"Thanks to a proliferation of devices and the infusion of technology into all things and processes, the world is generating more than 2.5 billion gigabytes of data every day, and 80 percent of it is “unstructured”—everything from images, video and audio to social media and a blizzard of impulses from embedded sensors and distributed devices.
This is the driver of IBM’s first strategic imperative: To make markets by transforming industries and professions with data. The market for data and analytics is estimated at $187 billion by 2015. To capture this growth potential, we have built the world’s broadest and deepest capabilities in Big Data and analytics—both technology and expertise. We have invested more than $24 billion; including $17 billion of gross spend on more than 30 acquisitions. We have 15,000 consultants and 400 mathematicians. Two- thirds of IBM Research’s work is now devoted to data, analytics and cognitive computing. IBM has earned 4,000 analytics patents. We have an ecosystem of 6,000 industry partners and 1,000 university partnerships around the world developing new, analytics-related curricula.
An IT industry remade by cloud: At the same time that industries and professions are being remade by data, the information technology infrastructure of the world is being transformed by the emergence of cloud computing—that is, the delivery of IT and business processes as digital services. It is estimated that by 2016, more than one-fourth of the world’s applications will be available in the cloud, and 85 percent of new software is now being built for cloud.
Engagement in a world of empowered individuals: The phenomena of data and cloud are changing the arena of global business and society. At the same time, proliferating mobile technology and the spread of social business are empowering people with knowledge, enriching them through networks and changing their expectations. This leads to IBM’s third strategic imperative: To enable “systems of engagement” for enterprises…"

IBM has been touting EPS of $20 by end of 2015, and they are facing tough competition by many large (SAP, Intuit) and many small companies engaged in big data and SaaSbusiness. They need someone not only who has presence in the market but also very efficient at executing a plan. Apple has been the best vertically integrated companyby way of its product offerings. With iOS 8 they have done several things that could help deploying iPhones and iPads in enterprises. There are a few key points IT teams look at, while deploying new technology or devices: Security, OS Support, Collaboration and management.

Apple does take security very very seriously. In February this year, they showcased their commitment to security with a white paper,and for me the architecture looked awesome. On the contrary, Android continues to be targeted by sophisticated malwareattacks. Later on, in iOS 8 they doubled down on the security and I am fortunate to come across a fantastic researchby Luis Abreu, a UK based UX and UI designer. There is plenty of stuff and I felt this is what worth mentioning from his report:

"Account Privacy
CloudKit does not give Apps access to the real user’s Apple ID or data from other apps, instead, CloudKit creates a Random User ID on a Per-App basis, and there’s no access to private data outside of your app’s CloudKit Drive Container.”

 

Then comes OS support, and Apple has done a tremendous job by accounting for future software updates. Generally a new generation device gets three further software updates, and that software up-gradation is provided without additional charges to the user. But Apple needs to invest resources for development, deployment and maintenance, which is an outlay for the company. So Apple accounting system is quite fascinating and forward thinking, they announced subscription method of accounting way back in April 2007 Q2 earning call. iOSusers have always enjoyed the latest possible OS updates,thereby latest apps when compared to any other operating systems. In comparison, Android, the major player in consumer market still suffers from fragmentation and enterprise IT may not be interested-intaking such risks.

Not everything is safe, for work!

Not everything is safe, for work!

Software Update Status as of Nov 2013

Software Update Status as of Nov 2013

Even though most analysts, and tech press ignored 64-bitarchitecture as a marketing gimmick, biggest advantagecame in the form of encryptionand decryption efficiencyin iOS devices (iPhone 5s, iPad Air and iPad mini with Retina Display). Even though Apple has not been best known for helping enterprise ITadoption, they did a remarkable yet an unnoticed job.

iOS 8 and IBM partnership really showcases the workthat went on behind the scenes. Features like Find my iPhone are really understated ones, but Apple continues to advance the feature with some of the unique mechanisms.Even with so much of excitement there is a bit of scepticism from a few corners. Apple and IBM had a few less successful partnerships previously, recent one was Power PC.Unlike this time, all the time, they were competing in the market for some other businesses. IBM now needs someone with whom they can assure their clients about the quality of devices, software updates, etc. For Apple, it is a market in which company lacksdepth. Apple’s iPad business showed no positive growth for two successive quarters. Apple did not announce new product categories as of this writing but there seems to be lots of new strategic partnerships being worked out. Am I predicting the success of this partnership? No, time will tell. But ever since Tim Cook took over as CEO, the company is not a ‘rebellion, take on the world’ types. Instead they behave more matured, they open up to the public wherever possible, and Tim Cook is the guy showcasing the company values.