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The iPhone Factor

 
 
By Jessica Davis  |  Posted 2009-05-27
 
 
 

Apple has never been known for its strong reseller channel partner program or its efforts to woo the channel with discounts and back-end rebates. But over the years as Apple’s Mac platform has made inroads into small businesses and workgroups within larger enterprises, the channel has come along for the ride, with or without Apple’s support.

Now a new subculture has formed—solution providers and third-party vendors that create solutions for businesses on the Apple Mac platform. From servers to storage to virtualization to e-mail, if there’s a technology available for the PC, chances are there’s a comparable technology available for the Mac, often at a lower price.


That and a host of other factors have contributed to Apple’s recent success in the business market. While Apple doesn’t break out its sales by end markets, those who sell to business say that Apple sales have been increasing. Business is pursuing Apple solutions.

For example, SAAS (software-as-a-service) enterprise application provider Salesforce.com reports that its iPhone mobile client for Salesforce.com has been downloaded 80,000 times—that’s 80,000 different iPhones—since it was added to Apple’s App Store on July 11, 2008.

Apple reports that its iPhone has been implemented by enterprise IT at Kraft Foods. Nike and Walt Disney have said they will support the iPhone. And Genentech has said it will deploy 3,000 of the devices to employees.

Another proof in point: IT distributor Tech Data’s recent launch of an Apple Lab within its own solutions demonstration center, designed to allow resellers to demonstrate all kinds of Apple-based technology solutions to business customers. Tech Data declined to say whether Apple was providing any financial support for the effort, but did say that Apple representatives will be participating in Tech Data’s expanded Apple solutions summits this year. In previous years, Tech Data offered just one summit dedicated to Apple. This year it is offering three, with an option to add a fourth.

Tech Data Vice President Brian Davis says the distributor has seen an increase in sales of Apple computers, including the MacBook and iMac, both year over year and quarter over quarter, in spite of a deep recession and sharp declines in sales of other kinds of personal computers.

And while Davis acknowledges that Tech Data does sell to many a retail storefront that in turn sells Macs to consumers, there’s also been a sharp increase in business interest in Apple platforms, he says. Davis believes the popularity of the iPhone and business applications for the iPhone, coupled with a host of third-party solutions for business that work with Apple’s platforms, is contributing to the success story.

Angela O’Donnell, owner of W. O’Donnell Consulting, says she has also noticed a higher rate of adoption of Apple products in the general business community.

An Apple specialist, O’Donnell says now that Macs can run the Windows OS as well as the Mac OS, it’s easier for Macs to make inroads. That’s because the machines can now run the full range of software applications rather than just those that support the Mac OS. And the Mac platform has also shaken an old stigma, according to O’Donnell.

"Traditionally, IT departments were hesitant to allow Macs into the enterprise," she says. "They were looked at as a security risk. That’s not really the case anymore."  

These days Macs are often considered less of a security risk than their PC counterparts. Strong advertising campaigns by Apple have contributed to rehabilitating the platform’s image with enterprise IT, she says.



Another big driver comes from the consumer side. While Apple’s iPhone made up only 1 percent of 28.5 million "corporate-liable" smartphone shipments in 2008, according to IDC’s May 2008 market forecast, that number is growing at a rapid pace as more C-level executives bring their iPhones to work and more business applications become available for the iPhone.

"We do expect iPhone to grow quickly in corporate-liable enterprise shipments, and even more quickly and to a larger degree in individual-liable shipments—those purchased by individuals and used in the enterprise or SMB," says Sean Ryan, research analyst for mobile enterprise software at IDC.  IDC plans to release updated enterprise numbers for iPhones next month.

Apple hasn’t made it easy for corporate IT departments to standardize on the iPhone. Apple and carrier AT&T are the only entities that can carry out patches and upgrades on the iPhone, so enterprises that keep a tight hold on management of their fleets of devices may find the lack of control to be a deal breaker.

Because of that, the enterprise applications that have found the most success on the iPhone platform are so-called cloud-based applications, where all the work is done on some distant server and not on the client device, says Ryan. Salesforce.com and Sybase both have strong plays there.

The iPhone’s success in enterprises has largely been in spite of Apple's policies, Ryan agrees.

He notes that market leader Research In Motion’s BlackBerry was built for the enterprise, while Apple’s iPhone was built for individuals. However, if Apple and its partners can make the advances that corporate IT wants in device management and security support, corporate-liable adoption of iPhones will grow even faster, he says.

"Smartphones are such personal devices," says Ryan. "People want to use them for both work and play."