Virginia M Rometty, IBM CEO
Cupertino (California), July 15: Apple is moving up to business class. And its seatmate will be IBM.
In a deal that could deepen Apple’s sales to corporations and strengthen IBM’s position in business software, the two companies announced a wide-ranging partnership intended to spread advanced mobile and data analysis technology in the corporate world.
IBM and Apple have been working together on the venture for several months, and they are jointly working on more than 100 business software programs developed exclusively for Apple’s iOS operating system and for use on iPhones and iPads. The applications will be tailored for use in industries including retail, health care, transportation, banking, insurance and telecommunications.
“We’ve already seen some unbelievable work,” Timothy D. Cook, Apple’s chief executive, said in an interview conducted along with Virginia M. Rometty, IBM’s chief executive. Cook described the venture with IBM as “a landmark partnership” for both companies.
Neither Apple nor IBM would disclose the financial terms of the deal.
Rometty said the companies planned to combine data analysis, cloud and mobile technology with Apple’s smartphones and tablets, turning the devices into decision-making tools rather than ones used mainly for email, text-messaging and contacts.
The long-term goal, Rometty said, is to use the technology to “reimagine how work is done” and to “unlock value, remake professions and transform companies”. The two executives mentioned an airline pilot tapping a calculation of updated fuel use and flight paths as weather conditions change, or an insurance agent calibrating risk assessments of a potential client.
But this week was a time for the announcement, not product demonstrations, they said. The 100 or so applications will be introduced later this year.
The applications, Cook said, will bring “big data analytics down to the fingertips” of Apple iPhone and iPad users in corporations. “IBM can do that,” he said, in a way that Apple cannot. Analytics is the discovery and communication of meaningful patterns in data.
Under the partnership, IBM will serve as a sales force in corporate accounts for Apple products and provide on-site service, which have been gaps in Apple’s capabilities.
| Timothy D Cook, Apple CEO
The Apple-IBM alliance in the corporate marketplace, analysts said, looks promising. “This partnership is complementary for the two companies, both in terms of their respective strengths and weaknesses,” said Frank Gens, chief analyst for IDC, a research firm.
Even without a direct sales force and service, Apple’s iPhones and iPads are used by over 92 per cent of the Fortune Global 500 companies, Cook said. But there is still a vast untapped market for Apple, he said, for selling more of its products to large companies and reaching the wider corporate market.
“The penetration is low, and the ceiling is so far above us, it’s unbelievable,” Cook said.
The partnership, analysts said, also should help both companies woo software developers, who are increasingly focusing their efforts on mobile and cloud applications.
Apple’s iOS operating system, they say, is the development environment preferred by many developers, but Google’s Android operating system is used on more mobile devices. The emphatic IBM endorsement of iOS in the corporate market, however, could give Apple an edge there, analysts say.
“It makes it much harder to get serious consideration for Android in corporations,” said Tim Bajarin, president of Creative Strategies, a technology research firm.
And Apple’s embrace of IBM, analysts say, will help attract developers to IBM’s cloud software development platform, called Bluemix.
IBM has been making a big push into mobile computing as one of its three crucial strategic initiatives, along with data analytics and cloud. The partnership with Apple, Rometty said, is “at the intersection of those three things coming together”.
IBM has made several acquisitions in mobile technology, employs 5,000 mobile experts worldwide and holds hundreds of patents in the field. Its mobile software and services business is growing sharply, with revenue rising nearly 70 per cent last year.
For Apple, IBM brings a deep global reach in international markets. Both companies do most of their business overseas, about 65 per cent or so. But Apple’s surge in international sales, Cook noted, has come only in the last four or five years.
Cook, who worked for IBM for 12 years, leaving in 1994, referred to IBM’s “deep roots” worldwide, with operations and offices in many countries. “IBM brings a lot there,” he said.
Industry surveys show that corporate technology managers are reluctant to put applications that can pull sensitive corporate data on mobile devices, because of security concerns. IBM has a corps of 6,000 security researchers and developers in 25 security labs worldwide — another asset IBM brings to the partnership.
“It’s clear that IBM and security go hand in hand,” Cook said.
Rometty added that the partnership would seek to “remove all the inhibitors” corporations have to adopting smart mobile applications that mine crucial business data.
New York Times News Service