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Reality Check | Ephraim Schwartz » Will the iPhone force Apple to change course?

March 18, 2008 | Comments: (0)

Will the iPhone force Apple to change course?

If you say your product is "enterprise-ready" within earshot of anybody who works for InfoWorld, you'd better be able to prove it. So when Apple claims "IT professionals" will be able to seamlessly integrate the iPhone into their enterprise environments, a great many questions need to be answered.

[ For more on the iPhone in business, see "IT's guide to the iPhone." ]

The fact is, Apple, at least up until now, has focused on delivering well-designed products that are basically self-service. Let's start with that premise.

The problem as I see it is this: Apple has been, in essence, a "unified experience" company (controlling the hardware and user experience with its own UI, operating system and support software) pushing out products that are basically plug-and-play within the Apple environment.

The enterprise is about applications; Apple is not
I don't think anyone can claim that Apple is an applications company.

But the iPhone presents a new challenge for Apple, in that it will require the company to provide mobile applications support. When that happens, a whole new set of services will be required of Apple.

For example, as much as those in IT complain about the high cost of maintenance and support from the likes of Oracle, SAP, Microsoft, and IBM -- and I've heard those complaints firsthand -- the truth is, IT couldn't live without those companies' supports services.

These companies could probably give away their software and still maintain a healthy profit thanks to maintenance contracts rather than acquiring new licenses. Oracle's acquisitions of PeopleSoft, JD Edwards, Siebel and so on had a lot to do with that calculation of revenue from maintenance and support contracts.

So now we come to Apple. It delivers products that usually deliver a great user experience and set a high design bar for integrated technology systems.

What it is not is an applications software company with a huge network of system integrators, consultants, and VARs, nor does it have a homegrown network able to support a huge enterprise-level customer base.

And let's face it, if enterprise companies buy computers in the hundreds at a time, given the right product, these companies may buy handsets by the thousands.

Making it even more difficult is the fact that even hardware-only companies are now also required to beef up their services. Witness Dell. A few years ago, Dell survived on sending boxes out to the enterprise. But over the past few years, as PCs and servers have become commodities, Dell was forced to look to services to keep investors happy.

My guess is this is the reason why Hewlett-Packard finally surpassed Dell in sales. Once PCs became a commodity, it was HP that had a very long history of support services.

Application software is even more demanding. The major software companies typically have anywhere from three to four support people for every salesperson at the company.

Backing the iPhone's business claims
Yes, the next iPhone OS revision is promised to include a great many enterprise features such as built-in Cisco IPsec VPN and Microsoft Exchange support, as well as remote data wipe and push e-mail, calendar and contacts.

But is the iPhone a consumer product that adds a few enterprise features, or is it a truly enterprise product that can be supported by an ecosystem of service providers? Because that is what it will need to survive in the enterprise.

Is Apple prepared on a huge scale to help its new enterprise customers integrate the iPhone with their existing infrastructure? Will the device be able to extract and process data from the back end? That's certainly not an application you should expect to see sold through the iTunes store, Apple's current venue.

Or does Apple intend to leave that type of support to AT&T, a telecommunications giant that is not exactly comfortable in dealing with the high-tech needs of the enterprise, either?

And then there's the nitty-gritty:

Can Apple build a consumer product that satisfies the needs of companies that want to prohibit their employees from downloading YouTube videos on the phone?

Can users multitask on the iPhone? Will programs run in the background or retain state when the iPhone rings?

Can IT do more than remotely wipe all data from an iPhone? What about blocking use of Bluetooth radio?

At the moment, the answers to these questions are no, the iPhone cannot control these components, it does not multitask, nor does it retain state.

Of course, these are issues that can probably be resolved over time, perhaps with the next SDK.

The bigger issue, however, is whether Apple will develop the necessary business model to back up its new business claims. Is it prepared to invest the time and money in becoming an enterprise-level company that understands the needs of large companies and meets those needs head on?

Related articles:

Posted by Ephraim Schwartz on March 18, 2008 03:00 AM


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Is it prepared to invest the time and money in becoming an enterprise-level company that understands the needs of large companies and meets those needs head on?

They are already doing so. Open your eyes and ears.

You have blinders on.

nay nay nay nay nay sayers....

ITS UNIX and ITS CERTIFED UNIX YOU DOPE!
Its NOT a PHONE!!!! Its NOT a PDA!!!

"IT" the iPhone is a hand held computer... Its a PLATFORM!!!! GOOD LORD!!

The closed door deals AAPL will make in healthcare will be HUGE. Special edition iPhones for the Enterprise..

AAPL can and will customize a data center just for you.

Apple does not BUY their computers from DELL!
AAPL does not have to LICENSE Windows...

OH forget it..... I'm done here

Posted by: iJah420 at March 18, 2008 06:39 AM

Gee, the game has just started. The SDK is just getting ready to spark. Development for this new platform will force IT to bend with the flow.

The problem is that IT doesn't want this change...BECAUSE THEY WILL HAVE TO LEARN NEW THINGS THAT REQUIRE TIME.

Those that go with the flow will survive, the rest will go by the wayside. Time marches on with or without you.

Posted by: ChampagneBob at March 18, 2008 07:51 AM

When you say Apple is not an application company do you mean the same company that created - amongst others - iTunes, iPhoto, iMovie, iDVD, iWeb, Pages, Numbers, Mail, Address Book, Final Cut Pro, DVD Studio Pro, Soundtrack Pro, Quicktime Player, Safari and Aperture? Or the same company that created the Server version of OSX? Or the same company that makes some of the most popular cross platform software?

Being someone that has to daily endure the dreadful stuff that Microsoft foists on to the enterprise sector all I can say is Please Apple Hurry Up!

Posted by: Tony Swash at March 18, 2008 08:43 AM

A few more applications that Tony could have mentioned as a response to " I don't think anyone can claim that Apple is an applications company":

Filemaker, Bento, Garage Band, iChat, Logic Studio, WebObjects, Hypercard (okay I'm going back a bit..)

Posted by: Wodster at March 18, 2008 09:32 AM

Tony Swash: Apple is a hardware company that also happens to sell software to encourage purchase of their hardware. Hardware is where they make money.

ChampaignBob, you're right that IT departments tend to resist change. MS crap is all they know and they're terrified of anything else. Of course, when they find out that working with Apple products is easier and requires far less work that MS products required, many will be in terror of something else--losing their now-unneeded jobs.

Ephraim Schwartz: HP didn't surpass Dell in sales because of service. They did it because they bought Compaq and the combined sales--as well as better sales options rather than being limited to internet only--is what made them the sale leader.

iJah420: I share your frustration with ignorant know-it-alls.

Posted by: Don at March 18, 2008 09:36 AM

Here are some things to think about:
1. At one time, all PCs used keyboards for input, but Apple's new Macs used a mouse.
2. At one time, all mp3 players played mp3 files, which were mostly downloaded illegally. Apple's iPod plays aac files which are typically purchased and downloaded legally.
3. At one time, all cell phones had tiny little screens and used tiny keyboards to access menu-based software, but Apple's iPhone used a large screen, with a multi-touch interface.

Is Apple ready for the enterprise? That's not the real question. Is the enterprise ready for Apple?

Apple's technology is disruptive, and requires the world to change to suit it, not the other way around. Will IT be able to stop people from downloading YouTube videos. No. That's why people will bug IT until they get their iPhone.

IT should stop a minute and listen to what Steve Jobs is saying. You want to deliver applications? Then create Web 2.0 apps, and deliver them to thousands of little iPhones connected to your network VPN. If you want to do it some other way, then it won't be with iPhones.

Posted by: Mike van Lammeren at March 18, 2008 09:38 AM

Apple stated in their iPhone 2.0 announcement that corporations will be able to have individual contracts for their iPhones and software development. This means that the general restrictions in the public software development contract don't necessarily apply. Apple will likely have a road show for such clients and general developers. Then, should corporations request IT training, Apple could supply it. Software support for purchased applications can be made by the developing company. Apple will ensure such public software works properly and isn't a security risk. Apple's developer conference this June has a separate track of training just for IT.

They'll likely try and keep support services manageably small rather than a profit center. They will try and make this a selling point: the savings corporations can achieve by training IT and not paying high support fees. If it works for the iPhone, further inroads are possible.

If corporations train their staff programmers for the iPhone they'll be familiar with Macs and Mac programming as so much of what they learn applies to Mac application development using the same tools and APIs. This development platform should show them how to save 3/4ths of the time normally spent to develop the same software. Unix developers will also find new income sources in such efforts.

It's early days and corporations and IT departments may have to "think different" to get the full benefit.

Posted by: Robert at March 18, 2008 10:46 AM

Is Apple ready for the enterprise? That's not the real question. Is the enterprise ready for Apple?

Mike L.

What a great question..... A question that IT dept(s). large and small need to ponder.

Posted by: iJah420 at March 18, 2008 11:19 AM

Good grief! The defensive Apple groupies are out in force again.

iPhoto? Garage Band? QuickTime? iChat?? What on earth do these applications have to do with business software?

These are all stand-alone consumer applications. Maybe they work, and maybe they don't require a lot of services and support. I'll take your word on that, but only because my business does not depend upon them in any way, shape or form!

Apple has NO EXPERIENCE with large scale business applications. Where are the ERP systems, the CRM systems, the POS systems, the HCIS's, the payroll systems, the financial/materials/asset tracking systems? Where are the vertical applications? Where are the Small/Medium/Large business-targetted systems? Apple has none of that.

If you're a trucking company, what load tracking & scheduling software can Apple provide? If you're an educational institution, what student registration & tracking system can Apple supply? If you're a steel mini-mill, what foundry software can Apple sell you?

Hear that sound? It's the sound of one hand clapping. Steve Jobs would understand, but I'm not sure the above posters would.

Posted by: Brian at March 18, 2008 11:30 AM

I read this and wonder if REM and the blackberry device has the same issue. We are getting blackberrys like hot cakes in my company and I dont see an army of REM folks or verizon folks here, so how and why does the iphone seem to differ from a support stand point? Maybe the REM team is here and I just dont see them?

Posted by: norb at March 18, 2008 11:56 AM

Mike van Lammeren said ************
Here are some things to think about:
1. At one time, all PCs used keyboards for input, but Apple's new Macs used a mouse.
2. At one time, all mp3 players played mp3 files, which were mostly downloaded illegally. Apple's iPod plays aac files which are typically purchased and downloaded legally.
3. At one time, all cell phones had tiny little screens and used tiny keyboards to access menu-based software, but Apple's iPhone used a large screen, with a multi-touch interface.
***********************

Oh, please, you Apple fanboys really need learn how to do some research on your own and not accept everything that the lord Steve Jobs tells you.

Mice were patented in the 1960's and existed on commercial system before the Mac. In fact they existed on Apple's own Lisa PC before the Mac. Apple certainly popularized the use of the mouse, but didn't invented it.

MP3 players mostly had illegally download music? Hardly, with the speed and breadth of the internet in the later 1990's, I hardly think that was the case. Most people were ripping their CD's for use on their MP3 player, which has been ruled as "Fair Use".

All phones had tiny screens? Windows Mobile-based phones had been around long before the iPhone.

How about Lord Jobs insistence to a one-button mouse when the rest of the world agreed that things like multiple buttons and scroll wheel were incredible useful and productive?

And to the various comments about Apple being a software company, most of their software was developed by other companies and purchased or licensed by Apple . For instance Filemaker, started out as a (OMG) DOS program called Nutshell written by Nashoba Systems. It was sold by Leading Edge. Nashoba later took advantage of the GUI interface on Macs, rewrote the program, and changed the name to Filemaker; it was sold by Forethought, Inc. which was owned by (OMG again) Microsoft!!!

Or perhaps Final Cut? Created at Macromedia by the former Adobe Premier developers

Who is the biggest Mac software developer (outside of Apple)? Microsoft. Other than Quicktime and iTunes, not much Apple software running on Windows.

Posted by: James at March 18, 2008 11:56 AM

Brian... You are not looking @ the bigger picture.

It's NOT about the pc anymore.

Stephen Ellis | March 11, 2008

APPLE'S renaissance in the past decade has been built on consumers: on elegant, easy-to-use computers, music players, software, and now mobile phones that are all largely used outside the workplace.

The company has always had a modest footprint in a few industries, but its financial performance and reputation have long depended on wowing home users rather than persuading corporate IT departments to open their cheque books.

If there is one key message from Thursday's unveiling of the long-awaited software development kit for Apple's iPhone, it is that this is about to change.

The kit allows third-party companies to develop new applications and tools for the iPhone platform, such as enterprise-class mobile email and messaging, or programs to look up medical records or supply chain databases.

This will allow the iPhone to tap the fast-growing markets for smart computer-like mobile devices in industries such as healthcare, logistics and retail. Of course, the kit and Apple's associated partner program will also accelerate the creation of more consumer oriented software in areas such as games, messaging and multimedia.

The iPhone has so far largely been marketed as a consumer' device, although its instant success in grabbing a quarter of the US market for high-end mobiles has included a growing presence among corporate users.

This, inevitably, has dragged Apple into increasingly direct competition with business-oriented smartphones.

Apple's move to licence Microsoft's ActiveSync technology for mobile delivery of Exchange messaging and calendering, and upgraded security and remote management capabilities for the iPhone, will help to fill that gap, but Apple will not catch up straight away. Of course, there is no guarantee that Apple will win: success in enterprise IT markets requires a different set of competencies than success in consumer markets.

Both rest on delivering the right features at the right time and price, but in the former adaptability and interoperability with corporate systems are critical, while in the latter simplicity and ease of use are vital.

For iPhone to emerge as the dominant platform for smart mobile devices, Apple will need to relax its total control over the elements that feed into the way a product is experienced by the end user.

The kit (and the associated business model, which involves Apple taking 30 per cent of revenue from iPhone apps in return for distributing them and ensuring they play nicely together) is a first step down this path, and shows that Apple remembers the costly lessons of its 1980s reluctance to open up to partners.

http://counternotions.com/2008/03/10/iphone2-competitors/

Posted by: iJah420 at March 18, 2008 11:59 AM

Apple can support large businesses and the software is there, as well as the savings…

http://www.macnewsworld.com/rsstory/62151.html

I love this quote…

""There's a lot of talk about the cult of Macs, but there's just as strongly a cult of Microsoft. It's just not as widely publicized."

Posted by: Synthmeister at March 18, 2008 11:59 AM

You guys sound like the IT guys of the 90s. If I were you, I'd start thinking beyond Y2k and think 2008. If not, hi-tech is going to mean "consumer market" and low tech "the enterprise." I think we can all agree that the enterprise market is becoming pretty stale and alot of that has to do with being locked into one operating system. Apple on the other hand is ready and willing to innovate that a such rapid pace that "enterprise" will mean low tech before the end of this year.

Posted by: lrd at March 18, 2008 02:18 PM

You guys sound like the IT guys of the 90s. If I were you, I'd start thinking beyond Y2k and think 2008. If not, hi-tech is going to mean "consumer market" and low tech "the enterprise." I think we can all agree that the enterprise market is becoming pretty stale and alot of that has to do with being locked into one operating system. Apple on the other hand is ready and willing to innovate that a such rapid pace that "enterprise" will mean low tech before the end of this year.

Posted by: lrd at March 18, 2008 02:18 PM

Well, some people here are interpreting your pointed questions as an attack. I'm not. June and the finished iSDK are not yet among us.

I thought Apple was already addressing Enterprise-level needs. Haven't they been selling servers all this time? That doesn't seem to be a consumer business to me at all.

As for applications, it seems to me that's what the iSDK is addressing. Enterprises will be able to create their custom apps that can then tie in to their systems *precisely the way they wish*. Instead of, for example, seeing an existing Windows Mobile app and asking for customization, enterprises can control how that app is made and deployed. It seems to me more fulfilling to have an app customized to one's needs from the ground up than to tweak something someone else developed (and whose bugs might still be unsquashed).

I'm certain background tasks will be allowed for enterprise niche apps. Since the iPhones will be basically corporate property, end users cannot squawk about battery life reduced by background processing (whereas consumers would).

http://mikecane2008.wordpress.com/2008/03/14/apple-will-permit-iphone-background-processes/

You have very good questions. Keep them up.

Posted by: Mike Cane at March 18, 2008 06:20 PM

The biggest problem with this article is the false premise that this large network of support structures for IT is actually needed to integrate Apple Technologies. The largest cost savings in investment in Apple Technologies is not needing most of those service contracts anymore. This because you wont need system integrators. The systems come already integrated, Hardware + Software from the same company and it works. No one else is able to deliver that value and businesses ignore at the peril of losing competitive advantage.

Posted by: Byron at March 18, 2008 09:07 PM

The environment for the iPhone need not be supported by Apple, it is supported and created by the IT department of the company with its own apps created by using the SDK.
The freedom is there for them (corporate users) to create apps specially tailored to their own needs.
Thus Apple is freed from having to support the corporate environment with softwares and can devote more resources to developing the iPhone.
A win-win situation for all.

Posted by: AdamC at March 19, 2008 04:25 AM


HMMMMMM

iPhone Not Ready for Enterprise?

Brian you are so ignorant ...& I mean that in the most loving IT way. Let me again say for the record "THE iPhone IS NOT A PHONE NOR IS IT A PDA!!!! IT IS A MOBILE PLATFORM THAT HAS ROBUST DEVELOPMENT TOOLS. YOU CAN BUILD ANY APPLICATION THAT YOU CAN DREAM UP!!!! ITS UNIX YOU DOPE!!! ITS A HANDHELD COMPUTER!!! GOOD GRIEF!!


Sybase Offers Secure Enterprise E-mail Support For Apple’s iPhone
By Dee Chisamera
16:06, March 19th 2008 0 votes
Recommend

Sybase Offers Secure Enterprise E-mail Support For Apple’s iPhone

Sybase iAnywhere, which is specialized in mobile computing and has incorporated its technologies in tens of millions of mobile devices around the world, announced on Tuesday its availability to offer support for e-mail on Apple’s iPhone, as part of its Information Anywhere Suite, reducing potential security concerns and at the same time providing a rich user experience for iPhone enterprise users. In the beginning the service will only offer e-mail possibilities, but other features are said to be included in the future.

“We’ve had significant demand from our customer base for iPhone support, as companies want to allow the iPhone as an approved device choice for wireless email, along with their other Windows Mobile, Symbian or Palm devices,” said Mark Willnerd, vice president of Sybase iAnywhere in a statement.

“In addition, we are excited by the recent release of the Apple iPhone SDK. We are currently exploring new possibilities for future product enhancements and additional iPhone support across our entire Information Anywhere Suite mobility platform,” Willnerd also said in his statement.

The company highlighted some of the key advantages to the new service, which is said to be released by the end of the month. Among them, the security issue, offline e-mail access, secured access to contact data, multi-device support (over 250 Windows Mobile, Symbian and Palm-based devices, in addition to the iPhone) and the broad enterprise e-mail support for both Lotus Domino R6/7/8 and Microsoft Exchange 2000/2003/2007.

“We were glad to be selected as an iPhone beta participant with Sybase iAnywhere. The solution was easy to set up without any adjustment to our backend infrastructure and we were ready to go with our iPhone devices in less than a day,” said Melkon Torosyan, project manager, Comdirect AG. “We are looking forward to deploying the solution because it addresses the needs of the users and the security concerns of our enterprise customers.”

Posted by: iJah420 at March 19, 2008 08:26 AM

I think your initial analysis of whether Apple can claim the iPhone to be enterprise-ready is decent, and it seems to be well-summarized by the question whether organizations will be able to order a thousand at a time and roll them out -- and get Apple to help integrate it into their environment.

But then you throw up some arbitrary tests that aren't relevant to being enterprise-ready. "Can you block bluetooth radio?" I have to reject that as part of the definition of enterprise-ready. As an example, otherwise, neither Windows, Mac, or Linux PCs qualify as enterprise-ready because they don't have the ability to block the display of any pornographic web-based or file-based image.

Yes, that's a crazy comparison, but if there are policies to prohibit employees from accessing these images and policies to prohibit them from bluetooth radio, then where's it written, besides in this article, that the definition of one enterprise-ready device is to enforce corporate policies while the definition of a different type of enterprise-ready device doesn't have to?

No, it's kind of like English grammar. By definition, native English speakers are speaking correctly. And by definition, if corporations decide that the tools in the iPhone let it safely distribute it to thousands of employees, and it can do so successfully, then it's enterprise-ready.

Posted by: chuckbo at March 19, 2008 11:22 AM

Well, a couple of people replied to my post, and not one "got" it.

The iPhone is not a complete business solution. The upcoming SDK is not a complete business solution. The Sybase support is not a complete business solution. At best these could be components of a business solution. Whether you run on PC's, Mac's, Sun hardware, IBM mainframe/mini, SAAS, it makes no difference at all.

Business software companies cut their teeth on getting to know a market segment, then doing everything in their power to make something so valuable, their customers can't live without it. Like contact management for sales personnel. Like underwriting for insurance companies. Like scheduling for airlines. And so forth.

Apple's only real, specific vertical market strength is in graphics and publishing. And that is second hand, via Adobe and other software partners.

Posted by: Brian at March 19, 2008 12:13 PM

I myself am looking forward to buying an iPhone (but not until it is 3G :). However, I am also trying to integrate the iPhones currently owned into our our systems, and I groan every time. There is no way (yet, the SDK is new after all) to do any kind of security policy push, nor can it be intreated into our e-mail system. We can get them e-mail ability, but there is no corporate address book integration, no anti-virus or firewall, no storage encryption, and no remote access lock-out ability other than changing a password.
My company is in an industry that truly needs to have these tools to manage risk appropriately, and that means having real control over where our data goes and what happens in the event of loss or theft. We have that with RIM, and there are tools for Windows Mobile and Palm. I am hoping that they will be available for iPhone soon, but I believe that while somewhat off the mark as what determines "Enterprise-Ready" he makes a good point that Apple has not been a company that produces that level of support for an essentially consumer level platform. They certainly have the ability, I look forward to seeing them execute. The iPhone rocks, and I want to be able to use it without worry.

Posted by: Mark at March 21, 2008 10:03 AM

For as long as I can remember IT professionals have bullied companies by speaking gobeldy-goop and self-serving "expert knowledge to maintain elevated status within corporate structures. Beginning with the iPod which eventually found favor with luxury car owners who began finding them increasingly on there option lists, Apple began to find favor with the "ruling classes who up to that point, had accepted that computers were something mystical that only one small part of the corporation could decipher through constant contact with "God". They the executives, noticed that using a Mac provided that same trouble-free and simplicity of operation. The executives instead of the underlings began asking IT departments "why not let me use my Mac indeed of those dreaded PC's.

The IT departments, true to form began this "gobeldy-gook" technospeak to surface again as the real guy who ran the company.

Enter the iPhone, and all he'll broke loose! These executives again wanted the IT folks to integrate this dreaded (easy to use) contraption into the system. The gobeldy-goop speak surfaced again. By this time the executives saw that they were unnecessarily restricted to arcane, entrenched, overly complicated rituals.

Alas, they began to see through the IT folks as a bottle-neck to progress and holding the corporations hostage to their whims.

What is the moral of this story? Write your own.

Posted by: watash at March 21, 2008 07:30 PM

The world has expectations of totally mobile computing. If the iPhone can meet that need and be secure, then it will succeed. And Apple *IS* an applications company, or it is at least open enough to work with 3rd party partners to create great applications. How did the Apple computer become the platform of choice for graphic artists? Great apps like Adobe PageMaker, PhotoShop, Acrobat, etc.

If a developer community rallies around the iPhone, it will flourish. If users demand iPhone-based solutions someone will most surely come forward to please his fellow man (and make some $$$ in the process).

Posted by: Debra M at March 23, 2008 01:23 PM

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