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

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.

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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

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22 comments
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  • RE: Apple's B2B App Store: Four reasons why it's a big enterprise deal

    Actually, Businesses don't have to have the App Store to offer their apps. Businesses can either a) post it on their website for employees to download b) email the app to employees c) via normal company download channels d) any of the above.

    While I've bought Apps from the App Store there's no reason a company couldn't make an app and then just have the end user import it into iTunes via the file>add file to library. I know because I've done this before.
    msdaniellec
    • RE: Apple's B2B App Store: Four reasons why it's a big enterprise deal

      @Rick_K it never fails. An Apple zealot like you (with multiple personality disorder) came immediately to defend the master
      nomorebs
      • RE: Apple's B2B App Store: Four reasons why it's a big enterprise deal

        @nomorebs
        I see you had to get you early morning Anti-Apple rant out of the way. Now how about spreading more lies, and other untruths, while you are at it? Everyone on ZDNet knows that there is only one company that produces perfect products, and that company is not Apple.
        Rick_K
      • RE: Apple's B2B App Store: Four reasons why it's a big enterprise deal

        @nomorebs
        So pointing out that you are issuing a falsehood is somehow defending Apple? My question is: why is a Windiws Zealot spreading falsehoods on an article relating to an OS they never even use?
        Rick_K
    • B2B provides something different.

      @msdaniellec

      It is not really designed for internal distribution but external distribution of your app to specific partners. It answers some issues I have had in my mind for some time on how to distribute apps I have conceptualizer. My issue was always distribution.
      Bruizer
    • RE: Apple's B2B App Store: Four reasons why it's a big enterprise deal

      @msdaniellec Sounds like a Windows Zealot spreading falsehoods to me <a href="http://www.getadj.net">Get a DJ</a> <a href="http://www.mp3freebee.com">MP3 Free Download</a>
      mrswilliamson
  • RE: Apple's B2B App Store: Four reasons why it's a big enterprise deal

    "Apple may be a consumer-first company but it?s glaringly obvious that it is serious about the enterprise prospects."

    Where does their decision to retire the Xserve fit into this statement? What about their constantly changing implementations of the AFP and SMB protocols, which give admins fits over file locking and compatibility? How hard does Apple really try with legacy application and hardware support?

    If you are talking about just the iPhone and iPad, maybe you're right. But you couldn't be more wrong if you are talking about Apple in general.
    scottwsx96
    • We're definitely talking about the iPhone and iPad.

      @scottwsx96 Apple has "given up" on "enterprise hardware" and is now focusing on leveraging the "consumer hardware" the enterprise is acquiring, originally indirectly but now directly. It's one more page from the "if you build it, they will come" playbook.
      matthew_maurice
      • RE: Apple's B2B App Store: Four reasons why it's a big enterprise deal

        @matthew_maurice ... or "if you can't beat 'em, join 'em." Apple may not have intended to sell a bunch of iDevices to enterprise customers, but it did ... which created a new market opportunity, and the company obviously isn't going to pass up that if it's easy enough to capitalize on.

        As for the Xserve line ... they were great machines, but they never really caught on. I bought and administrated dozens and they were terrific -- fast, stable, reliable. But few enterprises were willing to try them out when HP, Dell and Sun servers were already well established and trusted.

        But if Apple's new enterprise business strategy works well, who knows? We may see the return of the Xserve ... to serve as a locally-hosted iPad management device.
        jscott69
      • RE: Apple's B2B App Store: Four reasons why it's a big enterprise deal

        @matthew_maurice If rumors are correct, you will be seeing a new server form factor based on the new MacPro design which allows racking and/or stacking.
        I12BPhil
    • RE: Apple's B2B App Store: Four reasons why it's a big enterprise deal

      @scottwsx96 I agree pulling XSERVE was a bad decision. Enterprise Servers are needed, a Mac-Mani may run OSX server, but it not server class hardware. To call mac-mini a server is a joke, especially in a enterprise. Server Class Hardware needs redundant power supplies, Multiple Ethernet ports, the Ability to have a Hardware based raid system etc... Don't misunderstand, other than the fact that Apple products cost more than other vendors, i still prefer apple products and OSX. Do they expect to grow OSX/Macintosh into the enterprise with out enterprise class servers?
      freethinkerinfl
  • How about those in the middle?

    We are a private university with about 3,600 students.

    The requirement to buy 20 licenses for a particular piece of software is beyond our needs in many cases. Since an account can only buy an app once, we have no way to get multiple licenses for a product.

    For example, we have three or four people in an executive position who want to upgrade to Lion. They are outside the timeframe for the freebie. And normally, we wouldn't upgrade the OS of a computer that's already "out there." But...

    We would have to have a separate, distinctive App Store account on each computer to get the job done. We've discussed this with Apple, and right now, there is no other way to pay for multiple licenses under 20.

    This really sucks. We are not going to put a special App Store account on every Mac on campus (150+), let alone deal with the financial aspects with each different department.

    Not having a physical disc isn't the problem...not being able to buy multiple licenses from a master account is.
    rag@...
    • RE: Apple's B2B App Store: Four reasons why it's a big enterprise deal

      @rag@...
      Apple need a way to associate an business or organisation App Account with the one driving your device, so you get linked up pricing and anything else the group need like a messaging or data circle.
      neilpost
    • RE: Apple's B2B App Store: Four reasons why it's a big enterprise deal

      @rag@... I think you have a very unique case where you don't want enough licenses to qualify for volume pricing yet you want to be able to manage apps across a larger number of systems. I think the issue is far less about Apple and far more about your unique requirements.
      non-biased
  • How long till LulzSec is running your app ?

    How long till LulzSec is running your app ?
    john.medcalf@...
  • This might be new to Apple,But.

    This might be new to Apple, but its not new. Why it took Apple so long might be because they could care less until now about Enterprise business.
    jscott418-22447200638980614791982928182376
    • RE: Apple's B2B App Store: Four reasons why it's a big enterprise deal

      @jscott418
      And honestly, that's not a bad thing for a company to focus on consumer products and not for business. There are FAR more opportunities to sell to the average buyer than to sell to a company. Hey, if they want to do businesses now, cool. Hope they do it well, but don't try to make it sound bad.
      cartman00000001
  • RE: Apple's B2B App Store: Four reasons why it's a big enterprise deal

    I wonder how will Apples's B2B app effort will integrate with current identity management systems -specifically, AD which is the most common- but also with LDAP. Enterprises will want a centralized way to manage the devices and it would be nice to also have profile-based app distribution and permissions.
    fer.paredesb@...
    • RE: Apple's B2B App Store: Four reasons why it's a big enterprise deal

      @fer.paredesb@... Enterprise management for iPads is particularly pathetic.
      rag@...
  • RE: Apple's B2B App Store: Four reasons why it's a big enterprise deal

    ROFLMAO. Yea right that's why they got rid of the Xserve.
    vudutu@...