Strained Bedfellows? Apple and IBM Team to Create Business Transformation Mobile Apps

By Peter Bernstein July 16, 2014

Okay, so the news that Apple and IBM have formed what is called “The MobileFirst partnership” really took the entire ICT world by storm. As has been widely covered, the revelation that the two historic arch rivals have been working together on a venture, designed to produce “made for business” apps for exclusive use on iPhones and iPads, that leverage Apple’s hardware and software knowhow with IBM’s big data and analytics expertise, is really big news.

While no financial terms of the new venture were disclosed, we do know from Apple CEO, Tim Cook, and IBM CEO, Virginia M. Rometty, that:

  • IBM will also sell iPhones and iPads pre-loaded with the apps.
  • Over 100 apps will be created to “transform business” targeting industries, including retail, healthcare, banking, travel, transportations, telecoms and insurance.
  • They will be made available from this autumn and into 2015.

What we also know is that the partners feel extremely comfortable with each other in this endeavor, with both CEOs saying their skills complement each other with no overlap, and that they share the goals of re-inventing the enterprise, enabling business transformations and an ‘e-vironment’ that is both user-friendly, and provides the type of experiences for enterprise app usage that we have come to expect as consumers.

In fact, as Rometty stated that the companies share the same three top priorities:

  1. Growth of their businesses
  2. Unlocking mobility in the enterprise and creating new value
  3. Making all of this secure

Rather than paraphrase the words of the CEO’s, a roughly eight minute video they did with CNBC’s Josh Lipton explains it all.

Expanding the ecosystems

There are several sayings that come to mind in reviewing the partnership. The first is an old Chinese proverb relating to joint ventures of all types, which goes something to the effect, “Same bed different dreams.”  The second is, to paraphrase a popular saying here in the U.S. regarding politics, “business imperatives make strange bedfellows.” 

In regards to both sayings, the partnership has a good chance of being the exception to the rules. As I have written about numerous times over the past few years, it has become clear that the information and communications technology (ICT) world has become a battle of ecosystems.  Apple, Google and Microsoft are the big ecosystem anchors; however, there are lots of other players out there looking to create their own. Amazon, and Facebook spring to mind as well-heeled combatants, along with those in adjacent markets, like the big financial services companies and communications providers.

In addition, what also seems to be the case, as none other than Cisco CEO John Chambers recently told the audience at Brainstorm Tech 2014, “Of the top 5 or 6 [top IT] players today, only 1 will exist in 5 years.” In short, there is an imperative, and more than a sense of urgency, for getting positioned in the right ecosystem. Chambers, I think, is correct in saying that whatever happens in the next 12- 18 months will have profound impact on industry structure and fortunes for years to come, and this new partnership is a major shot across everyone’s bow. 

Indeed, the reasons the Apple/IBM partnership makes sense are for precisely those cited above. Apple gets enterprise street credibility for its personal devices where there is vast opportunity for growth, and IBM gets the partner it so desperately needs to have a major role in the rapidly evolving mobile enterprise space, so it can have a viable and holistic go-to-market story. 

The Apple/IBM partnership, if nothing else, has created a disturbance in the force, whose ripple effects could be a small wave for some in the industry, or a tsunami for others. How, who, and when various players respond in terms of next moves will be fascinating.  It seems a safe bet that such moves will be sooner, rather than later.

Edited by Adam Brandt
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