Apple's B2B App Store: Four reasons why it's a big enterprise deal

Summary:Apple's B2B App Store went live last week and it is the latest signal that the company is taking the enterprise seriously. Here's why it matters.

Apple's B2B App Store went live last week and it is the latest signal that the company is taking the enterprise seriously. The larger questions revolve around whether Apple had to launch the B2B App Store to get ahead of more traditionally enterprise-friendly rivals on deck or simply sees a big opportunity to cement its current momentum in corporations.

The B2B App Store is designed to accommodate volume licensing so companies can buy multiple copies of an application and distribute them to employees. If you wanted to outfit a unit, say a sales team, a company would need each employee to download an app and then expense it. That's not how businesses operate. Volume purchases are usually the rule.

Tim Cook, acting CEO of Apple, touted enterprise momentum on the company's fiscal third quarter earnings call. Apple has noted pilots and implementations for iPhones and iPads and has a nice chunk of Fortune 500 companies interested. With its B2B App Store, Apple is backing up its talk with some action.

"The B2B App Store is recognizing that Apple came into the enterprise through the back door because employees brought iPhones and iPads to work," said Carl Howe, an analyst at Yankee Group. "Why not make it easier for the enterprise as opposed to making them jump through consumer hoops that aren't well suited to the way businesses buy."

Here's a look at four messages delivered through Apple's B2B App Store launch. Apple is courting the enterprise. Apple may be a consumer-first company but it's glaringly obvious that it is serious about the enterprise prospects. It's likely that Apple accidentally got enterprise traction, but now it's running with the ball.

The company also likely realizes that up-and-coming rivals, notably HP and Research in Motion, already have multiple stakes in the business technology space that may be an advantage in the tablet market. HP and RIM can both bundle their tablets in broader deals. HP and RIM are also much more likely to play the volume discount game, according to Forrester Research.

In other words, Apple has to court the enterprise at least a bit and be obvious about it. Contrary to popular perception, Apple has always had business in mind---not that it had an enterprise developer license the day the App Store launched.

Apple needed a B2B App Store. In many respects, Apple had no choice but to launch a B2B App Store. Apple announced the B2B App Store along with international App Store price changes July 13 and pushed it live a week later. The move makes sense on many fronts.

  • First, the B2B App Store solves the volume purchasing problem.
  • Second, the B2B App Store allows for custom apps to be delivered between individual companies.
  • And by easing distribution, Apple may garner more of those custom applications.

James Buchanan, a senior director at SAP's Sybase, said the B2B App Store is "a great step forward." After all, Sybase and SAP plan to deliver anywhere from 40 to 50 customizable mobile apps by the end of the year. "We now have more flexibility to meet customer needs," said Buchanan. "A lot of enterprise customers have custom data and process needs. The B2B App Store allows us to tailor apps for those needs."

Strategically, the B2B App Store solves a few conundrums. First, Howe argued that RIM's app marketplace is essentially a B2B store already just based on the selection of apps. Android allows for multiple app stores and enterprises can distribute mobile software via side loading. Apple has one app distribution point and if it wants enterprise customers it had to create a B2B neighborhood.

Now Apple can be seen in a leadership position in the B2B app space.

Related:

SAP, Sybase roll out mobile apps for business (screenshots)

The opportunity for Apple resides in custom apps. As far as business goes, the custom apps that will be available in the B2B App Store are critical. Why? Lock-in.

Let's face it: Corporate IT buyers are a slow moving bunch. Companies developed applications on IE 6 and many are still keeping that browser even though Microsoft is begging them to decommission it over security risks.

If an enterprise bets on the iOS for a custom app, it's not likely to move off the platform any time soon.

Say Boeing wanted to build a custom iOS app for Continental United. Distributing that app would require a posting on an intranet and then some hurdles installing it. At scale, that process is painful to say the least. The B2B App Store can ease a lot of pain.

Boeing's Jeppesen unit, which provides charting, flight plans and crew management software to the aviation industry, reckons that the B2B App Store will make distribution easier. Chris Kiley, Jeppesen senior manager of Web and mobile solutions, said that most of his company's apps would fall in the custom category.

Jeppesen so far is working solely on the iOS platform, but is planning Android apps at some point. To date, Jeppesen has found that its apps work best on a tablet so its focus thus far has been on the iPad. "This environment will enable us to build better and more powerful apps supporting our industries specific needs," said Kiley. "B2B will allow us to better manage specific app versions among a large customer base."

There's an enterprise learning curve with Apple. Perhaps more importantly, the B2B App Store represents a bit of an enterprise learning curve for Apple.

As noted by Sybase's Eric Lai last week, the B2B App Store builds off of a similar effort for the education market. That effort worked, but was also a bit clunky. Jim Siegl, a technology architect with the Fairfax County (VA) school district, has documented how the education volume purchase program worked.

The upshot is that Apple cut a bunch of steps from the education volume purchase process to the enterprise one. Granted, some of the hassle with the education version revolved around sales tax and credit card use. Educational institutions generally don't use credit cards to buy and don't need sales taxes.

Combine the volume purchase pricing with some Apple-specific negotiation tactics that are emerging and it looks like the company is willing to meet corporations part way.

Add it up and enterprises are likely to respond to Apple's B2B App Store. However, there are some wild cards that may derail mass enterprise adoption.

Siegl noted a few potential deal breakers, but the largest one may be Apple's approval process. According to Siegl, Apple will need to log in and operate an application. This requirement isn't all that shocking---it's Apple's app quality control---but companies will need to set up a generic app with dummy data to protect sensitive business data.

In its guide on the volume purchasing program, Apple said:

Each app, as well as each version (update) of the app, submitted for custom B2B distribution goes through an app review process with Apple. The same app review guidelines for App Store apps apply to custom B2B apps.

If your app contains sensitive business data, you may want to include an authentication mechanism within the app. Custom B2B apps by themselves are not secured by Apple, and the security of data within the app is the responsibility of the developer. Apple highly recommends using iOS best practices for in-app authentication and encryption.

To verify that custom B2B apps meet the review guidelines, Apple will need to log in and operate the application. Work with your developer or business partner to determine how to meet this requirement with appropriate handling of proprietary or sensitive business data. You may want to provide generic test accounts or sanitized sample data to protect confidentiality for the purposes of app review.

Nevertheless, the review process may not be a deal breaker. Many companies are likely to give the program a spin by providing contact information, a corporate credit card and Dun & Bradstreet number.

Related: Deep Dive into Apple's New Volume Purchase Program for Businesses

Topics: Apple, Browser, E-Commerce

About

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CN... Full Bio

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