Apple, IBM Deal Is a Winner, No Matter How Cynical the Viewpoint

By Michelle Maisto  |  Posted 2014-07-16 Print this article Print
Apple-IBM Deal

NEWS ANALYSIS: Although some brand it as "all gravy" and clever marketing, analysts agree that Apple's deal with IBM will benefit both sides.

Apple CEO Tim Cook, in a television interview with CNBC about Apple's newest partnership with IBM, said, "It's profound. It's historic. It's landmark."

Announced July 15, the deal involves the pair creating more than 100 industry-specific enterprise applications; IBM getting to put the big-data know-how and enterprise-class solutions that it's known for on some of the most-liked hardware in the world, and with an enterprise-tailored version of Apple Care included; and Apple to increase its enterprise market share and sell more iPhones and iPads while leaving to IBM the enterprise nitty-gritty it has never been keen to deal with.

Sitting alongside IBM CEO Virginia Rometty during the interview, Cook said the companies fit together "like puzzle pieces."

What do the analysts think?

"It's all gravy for Apple," Ezra Gottheil, principal analyst with Technology Business Research (TBR), told eWEEK.

"This is about reinforcing and broadening the adoption of Apple hardware in the enterprise, and Apple helping IBM to get it right," said Gottheil, adding that it's a bit of "brilliant marketing" for IBM.

"Every major [business intelligence (BI)] app has iOS on the front end—they've all been doing that for years. All of a sudden, IBM gets a huge amount of press for doing pretty much the same thing. Meanwhile, Apple says, 'If you want to tell the world we're pretty enterprise friendly, go ahead. And if you'd like to sell our hardware, we'd be thrilled.'"

Where the deal could move past just reputation-boosting and sales, Gottheil continued, is if there's an opportunity to integrate Siri with IBM's backend.

"That kind of almost natural-language interface is really appropriate for large-scale enterprise apps," Gottheil said. "If you could ask questions like, did the hospital see more infections over the last quarter, or which color sandals sold best last month. If you can ask those questions with voice, you could expend the use of BI."

There was no mention of such a feature in the announcement, Gottheil added. "I've just been waiting for the shoe to drop with somebody [whether Siri or Google or Cortana] for a while."

Pund-IT Principal Analyst Charles King, in a July 16 report, called the deal "pretty impressive, overall," adding that it is structured to "leverage the established strengths of both in order to shore up their individual weaknesses."

King added that the value of IBM's deep relationships with every sort of global enterprise can't be overstated and that the promised 100 apps "smells as if it could be related to IBM's 'patterns' strategy, which has already helped spark the development of hundreds of applications and tools for industry-specific scenarios and business processes."

Jan Dawson, chief analyst with Jackdaw Research, points out that enterprise IT departments have favored Microsoft devices over Apple devices, since the latter are harder to provision and manage.

"This deal is about turning that part of the equation around, so that IT departments can embrace Apple devices just as end users have," Dawson told eWEEK. "It provides a level of support no other computing product has, with on-site help as well as AppleCare support from Apple over the phone. And it will give Apple a significant new direct sales force in the enterprise for selling all kinds of Apple products."


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