Big Blue-Apple: It’s All About The Apps

July 28, 2014 Alex Woodie

At first glance, the partnership between IBM and Apple is a bit of a head turner. The companies have little in common, either technologically or culturally. One makes electronic gadgets for consumers and the other sells IT solutions to enterprises. But when viewed through the lens of the world’s obsession with mobile apps and Apple’s unquestioned supremacy in creating app experiences that people love, the union starts to make sense.

The central component of the deal is the 100-plus new, industry-specific apps that IBM and Apple will jointly develop for the iPhone and iPad. The applications will be natively developed in Objective C and will target seven specific industries: banking, insurance, healthcare, travel and transportation, retail, government, and telecommunications. We can expect to start seeing the first of these new apps, which are called IBM MobileFirst for iOS Solutions, later this fall and more will come in 2015.

Under the deal, Big Blue is going to be selling iPhones and iPads to its huge base of enterprise customers and also providing implementation and customization services. (Who needs a PC business when mobile devices are the preferred client interface?) IBM will also provide cloud-based storage and device management for the Apple devices, and the companies will also work together on extending Apple’s maintenance program, called AppleCare, to IBM’s customers.

This is a big deal for both companies, and gets both of them credibility they desired. For Apple, it gets the enterprise and industry vertical know-how it needed to break into the business mobility space.

“By and large, I think we’ve transformed the life of consumers, but I wouldn’t say we’ve transformed the enterprise,” Apple CEO Tim Cook says in an interview with Re/Code. “We’ve transformed it some. But the truth is that in order to do that in a big way you need to have the industry expertise of each of the industry verticals, and IBM has that in spades.”

For its part, IBM gets the foremost experts in mobile UX (user experience) design working to build IBM-labeled apps. IBM knows how to do the tough work of building and integrating back-end systems that span servers and databases and applications and networks. But developing front-end user interfaces that people actually enjoy using hasn’t been a traditional IBM strength. Apple products still reflect the perfectionist attitude implemented years ago by founder Steve Jobs, and now IBM plans to harness it.

In an interview with IT Jungle, IBM’s vice president of enterprise mobility, Phil Buckellew, elaborated on the partnership. “Combining Apple’s great skill on the front-end plus IBM’s capability on the back-end we believe is a great match that’s really going to help us to help our clients take advantage of these opportunities.”

According to Buckellew, the mobile space is on the cusp of transforming the business world, and those who move quickly will have an advantage. “If you think about the opportunity that mobile provides . . . . the industries and leaders who embrace the mobile-first solution and get on that path we believe are going to have competitive advantage over others that do not,” he says. “And as a result of that, it really is a big opportunity for the IT industry to embrace mobile in this way and to . . . . re-do the way work is done.”

IBM CEO Ginni Rometty and Apple CEO Tim Cook have a new partnership.

This won’t be IBM’s first entry into the mobile rodeo. If you ask 10 IBM executives what Thomas Watson’s company does today, you will likely hear the same four phrases–mobile, cloud, social, and big data–come out of their mouths. IBM has been driving a “mobile-first” strategy for years now, but this Apple partnership takes it to a whole new level.

IBM gets the chance to leverage each of those four “pillars” with the 100-plus apps. It will lean heavily on IBM cloud-based services to provide storage, analytics, and device management capabilities to the IBM MobileFirst for iOS joint customers. It will also get the chance to tap into the “deep analytics” that leverage external data–such as geographic data harnessed from phones and possibly even social media feeds–to deliver new services.

“We know that by surfacing those [analytic capacities] through these mobile apps is where a lot of the productivity gains will get found,” Buckellew says. “By taking advantage and managing the data that organizations have today, serving it up to employee at the moment that they need to take action, will unlock huge potentials for revenue growth, for cost savings, for taking latency out of business processes. That’s all part of the value prop.”

It is tough to say which company needs the other more. Apple is the world’s most valuable company, with a market cap of $581 billion and 2013 revenues of $171 billion, and it could probably buy IBM, which has a market cap of $197 billion and 2013 revenues of $100 billion. One could make a good argument that IBM needs Apple more. IBM certainly doesn’t have the culture of user-centered design that has flourished at Apple, and is evident in every product since the iPod debuted back in 2001.

But when you consider that sales of Apple’s iPad have been trending downward, you begin to see why Cupertino may have done this partnership with Armonk. Apple is under huge pressure from Wall Street to maintain sky-high sales levels, but without Jobs at the helm, some of the magician fairy dust is starting to wear off. Competition from Samsung and other vendors making Google Android-powered devices is fierce, and the chances of developing another breakthrough, in wearables, TV, or any other consumer-focused tech genre is decreasing by the month.

For Cook, the decision to partner with the world’s most respected business technology firm probably wasn’t a hard one. As he said, Apple’s mobile products have not had as big an impact in the business world as they have in the consumer space. The chance to have a first-mover advantage is probably over, but there will likely be many enterprises interested in purchasing soup-to-nuts mobile solutions that have IBM managing the integration into the IBM i servers or mainframes on the backend, and have Apples’ flair for design on the frontend.