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Apple's enterprise push will depend on more than just hardware

Apple is getting serious about selling to businesses, but there are still many hurdles to overcome.

Even the Apple Watch is being pressed into service as part of Apple's enterprise push.

Apple is getting serious about selling into business, but may find budget-focused executives harder to win over than consumers entranced by elegant gadgets.

Last month Tim Cook revealed that Apple's enterprise push had generated $25 billion in the 12 months to June 2015. That's a big number, but it's dwarfed by Apple's total revenue over that period: $224bn:

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And while Cook insisted that selling to businesses "is not a hobby," Apple's enterprise revenue accounts for only 11 percent of its total revenue, or less than the revenue it reported for iPhone sales in its last quarter. For comparison, over the same time period Microsoft reported around $52bn in enterprise revenue (and Microsoft's enterprise sales are likely to be higher as this number does not include some sales of smartphones and Surface hardware).

One reason for Apple's enterprise push is the need to seek new markets: the peak of iPad sales to consumers may have already passed, so Apple is looking to business as an obvious alternative market. And while most businesses have bought some iPads, many of these are used in the same way they are in the home -- for consuming content rather than creating it. Also there is often little deep integration between these devices and core enterprise systems.

So for Apple to really challenge the dominance of Windows in business it has to prove that its hardware is more than attractive gadgetry: it has to make it useful.

Apple has certainly been building up its enterprise presence: in the UK, for example, Network Rail has developed custom apps for maintenance operations and incident data across its 22,000 iPad and iPhones to fill out reports and take photos of hazards.

The Apple-IBM deal in action

Apple has also signed a deal with IBM to develop iOS apps for enterprise, building an iOS app at the front end plugged into enterprise systems like customer relationship management or work order mangement systems. This is a deal that would have been inconceivable in earlier decades.

For example, the Field Connect app for energy and utilities companies accesses corporate geographic information and outage management systems, and can push alerts on outages or hazards to engineers in the field "whether in the truck or at the top of a pole" via the Apple Watch.

IBM and Apple have pledged to create 100 such applications by the end of the year. "We're still on track," said Katharyn White, Apple sales and go-to-market global leader at IBM, who said the combination of Apple's focus on user experience and IBM's industry knowledge and analytics tools has created "as strong a partnership as I've ever been associated with."

Industries that have adopted the iOS apps include financial services, healthcare, utilities and retail, said White, adding that there has been interest in reusing apps aimed at one industry in another -- "retail apps into insurance for cross-sell and up-sell, for example."

"It is about what you get in an iOS experience in terms of that marriage of software and hardware and the stability of that. Over time these apps will continue to get better, to take advantage of new iOS features and all of the insight in all of the different organizations using these apps and what we're learning," she said.

The iPhone, iPad or Apple Watch at the front end may get all the attention, but it's the back-end integration where much of the hard work really happens.

"These apps don't exist if they don't integrate into the back end; they've got to integrate to use the corporate APIs," said White.

IBM puts together a blueprint for all the potential integration points -- 72 in all -- plus key elements such as files and data, analytics, notification, authentication and permissions, peripherals and accessibility. All of which means that apps can be implemented in just six weeks.

Several of the 32 existing apps also work with the Apple Watch: for example, a field worker might get a tap on the wrist via the watch to notify them of a change in wind conditions.

And IBM and Apple are already working on business apps for the iPad Pro, which is due to arrive next month. "Part of it is transitioning, extending our apps into the iPad Pro that already exist. Not all of them make sense in that environment -- the use case has to make sense to have it be an iPad Pro solution, but some really amazing ones are designed for that from the very beginning," said White.

Apple and IBM are also working with Japan Post to offer iPads to as many as five million Japanese senior citizens over the next five years as part of a home monitoring service.

IBM is not the only company Apple is working with: it has also signed a deal with Cisco to create what it describes as "a fast lane for iOS business users" by making Cisco networks work better with for iOS devices (plus tweaked versions of its WebEx and telepresence packages).

These are the biggest deals announced so far, but they aren't the only enterprise tech alliances Apple is working on. In April the company said it was working with "more than two dozen" business software companies, including Box, DocuSign and Microstrategy. By August that had grown to over 40 "business software and solution providers" working on iPad and iPhone offerings for business users.

Apple has been one of the big winners from the consumerisation of IT: first the iPhone and then the iPad have been forced onto the corporate agenda, mainly because staff would go out and buy these devices for themselves and then want to use them for work, too. The company has also benefited from the more general move away from the desktop to mobile computing -- a transition that some of its rivals, including Microsoft, have struggled with.

Playing the enterprise game

However, despite its alliance-building and new products, the way isn't completely clear for Apple in the enterprise world.

First, as analyst group Gartner points out in a recent research note, Apple's (not always successful) obsession with secrecy remains a problem for businesses wanting to understand how these products will develop: "Expecting product roadmaps is counter to Apple's culture," says Gartner; "The Apple model continues to frustrate enterprises wanting to plan product transitions."

Another problem for businesses, says Gartner, is Apple's rigid pricing. "Apple's pricing policies continue to support minimal discounting to enterprises...Enterprises expecting significant large-order discounts from Apple will continue to be disappointed."

The big question may be whether Apple is willing to change how it operates as a supplier -- and give CIOs the same experience they get from other tech suppliers in terms of things like product roadmaps -- or whether businesses will adjust to dealing with a different type of supplier.

As one CIO told ZDNet earlier this year: "If Apple want to be considered on equal terms in the enterprise space, they need to integrate. Beauty and branding alone will get you so far, but the next step has to be for the OSs and protocols to start playing nicely together."

Another issue for large-scale enterprise roll-outs is the price of Apple products. Apple has consistently focused on the premium market, but that doesn't work so well for businesses where not all users are equal, or need equally complex feature sets. It may well be that Apple will only focus on the top end of the market, just as it has done in the consumer space.

Equally, this may be less of an issue than it once might have been as the PC market continues to fragment. Rather than one-size-fits-all deployments, companies may be more willing to offer different devices to employees depending on their needs: smartphones for some, tablets for others, Chromebooks or standard PCs for the average office worker and then MacBooks or Surface Book devices for executives.

For Apple, retaining the much-vaunted simplicity and elegance of its products while dealing with the complexities of enterprise IT may prove to be the biggest challenge.

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