IBM and Apple -- Just not that big a deal
Given that I used to work for Apple and have lately been quite critical of IBM, readers are wondering what I think of Tuesday’s announcement of an iOS partnership of sorts between Apple and IBM. I think it makes good sense for both companies but isn’t a slam dunk for either.
There are three aspects to this deal -- hardware, apps, and cloud services. For Apple the deal presents primarily a new distribution channel for iPhones and iPads. Apple can always use new channels, especially if they hold inventory and support customers who aren’t price-sensitive. Apple’s primary goal is to simply get more devices inside Big Business and this is a good way to do that.
The apps will all be developed by IBM but will still sell through the App Store and will have to meet Apple’s quality standards. I guarantee you meeting those standards will be a problem for IBM, but that’s not Apple’s problem. In fact as far as I can tell Apple has few if any resources deployed on the app side so for them it’s almost pure profit. Who can argue with that?
Cloud services for iOS are more complex and problematic. I’m doing a whole column shortly on IBM’s cloud strategy so I won’t go too deeply into it here, but let me point out a couple things. Apple has more data center space than does IBM, so it’s not like Cupertino needs IBM’s cloud capabilities. Apple is also a customer of Amazon Web Services, the largest cloud vendor of all. These facts suggest to me that this aspect of the deal is where fantasy hits reality. IBM wants iOS cloud services, not Apple. Big Blue dreams of iOS cloud dominance and they expect it will be fairly easy to accomplish, too. After all, they have a contract!
But to Apple the cloud services are just a necessary expense associated with getting device distribution to IBM’s customers. If no cloud services actually appear or if they do appear but are useless, Apple won’t care. Same, frankly, for the IBM apps.
This isn’t the first time Apple and IBM have worked together. In the dark days of John Sculley Apple created with IBM two software partnerships -- Taligent and Kaleida. Taligent was supposed to do an object-oriented and very portable operating system but ended up doing some useful development tools before being absorbed completely into IBM. Kaleida Labs did a CD-oriented media player that was superseded by the Internet and died within three years. I had friends who worked at both concerns and told me of the culture clashes between Apple and IBM.
This new partnership will turn out differently from those. Apple will sell a ton of iPads and iPhones and IBM will make some money from that. IBM business apps will be less successful but there may be a few that appear. iOS cloud services from IBM won’t happen. More on that tomorrow.
The result will be that Apple wins and IBM doesn’t lose, but neither company will be seriously affected by the other. It’s just not that big a deal.