apple Analysis: Why Apple is using IBM as a Trojan Horse to crack the enterprise market

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Apple and IBM have announced that they will team up in what they call an "exclusive partnership" that marries the best of Apple's hardware with IBM's software and services expertise.

The move was welcomed by the stock markets with IBM's shares up by nearly 2% and Apple's gaining 1.72%. It also bears some similarities with a deal struck 33 years ago that saw Microsoft piggyback on IBM's PC platform to become the giant it is today.

Clearly, though, the two companies complement rather than compete with each other with very little, if any overlap. Broadly simplifying, Apple will use IBM as a medium to crack the elusive enterprise market while Big Blue will get privileged (but not exclusive) access to the iOS ecosystem.

Apple, for all its consumer clout, is still a minor player in the enterprise market where BlackBerry's domination is already ebbing away. With slowing growth, growing pressures on margins and increasing competition, it was only a matter of time before it looked elsewhere.

Add the slew of announcements by Google and Samsung for the enterprise stack and it is clear that something had to be done to prevent Android from owning that lucrative segment.

http://mos.futurenet.com/techradar/art/people/IBM%20and%20Apple%20CEO-460-100.jpglike its entry-level server range sold to Lenovo), it has embarked on a number of bold moves, with a clear focus on big data, business analytics, cloud computing and mobility.

Its current CEO, Virginia Rometty, is tied to the financial roadmap set out by her predecessor, Sam Palmisano. He said that by 2015, IBM would deliver at least $20 a share with $70 billion returned to shareholders - and not reaching these expectations could have dire consequences.

Human touch

The company will commit human and financial resources to deliver iOS-specific cloud services as well as create more than 100 industry-specific enterprise solutions exclusively for Apple's iOS devices (Big Blue usually supports Nokia Symbian, BlackBerry, Android and Windows Phone as well).

This will be done via its MobileFirst platform, one of what IBM calls one of a quarter of building bricks of enterprise mobile solutions, the other three being the apps themselves. They're made up of mobile service and support and are handled jointly by IBM and Apple as part of a packaged service offerings offered by IBM.

That said, Apple is unlikely to prevent IBM rivals, such as Oracle, Microsoft or SAP from developing similar solutions on iOS for the enterprise market.

In fact, it is likely to encourage them to come up with their own versions of MobileFirst as soon as possible to profit from the rise in interest in mobile enterprise solution generated by the announcement.

The winner? Apple.

Apple, it seems, will be the one benefitting the most from the partnership as it doesn't have to do much with IBM having most of the weight-lifting to do.

The deal gives it access to an enterprise expertise that's second to none, and 100,000 IBM-backed industry and domain consultants and software developers will act as salespersons for its iPhones and iPads.

Setting something similar would have cost Apple billions in terms of investment and taken years, not to mention the risks involved and a potential shareholder revolt.

A partnership with IBM is therefore safer, cheaper, faster and will allow Apple to learn more about businesses. Who knows, both may even merge to create the world's first trillion dollar company.

We wouldn't be surprised if, despite recently published comments, BlackBerry decided to side with the lesser of two evils and embrace Android, something it has already been doing by supporting native Android apps (or Oracle could buy it).

Apple and IBM will be holding their respective earnings calls over the next few days and it is likely that they will elaborate more on yesteday's announcement.

Rometty also said that the alliance wants to bring the same level of transformation to the way people work as Apple did in the consumer market.

For all the excitement that the partnership has generated, one would dread to fathom the disappointment it would cause if both do not deliver on their promises.

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