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Should Apple worry about Microsoft-IBM deal?

Matt Kapko | July 22, 2016
IBM’s new partnership with Microsoft nearly mirrors a deal the enterprise giant struck with Apple in 2014. But that’s where the similarities end.

ibm microsoft

When Microsoft inked a deal with IBM last week to develop new business applications for Surface tablets, it felt like a case of deja vu. Details of the partnership closely resemble those agreed to almost exactly two years earlier by Apple and IBM. The difference, experts say, is how Apple and Microsoft are tackling the ‘next phase in enterprise productivity.’

IBM and Microsoft have been closely aligned on many business deals for decades, making it somewhat surprising that it took so long to bring this particular partnership to fruition. Apple’s deal with IBM, by comparison, was considered a watershed moment because it heralded a new era of cooperation between the longtime competitors

“Apple scored a big win with their agreement with IBM but also came a bit as a surprise,” says Raul Castanon-Martinez, senior analyst at 451 Research. “IBM followed up with a similar agreement with Microsoft because partnering with Apple meant leaving out a significant chunk of the market.” Nowadays it’s common for companies to have a mix of Apple and Microsoft devices that IT must support, he says.

“The delay does seem a bit strange but I do not think this means Apple has gained a significant advantage in the enterprise,” Castanon-Martinez says. Microsoft’s enterprise play goes beyond positioning Surface tablets for work; it is also putting pieces together for the next phase in enterprise productivity, according to Castanon-Martinez. Microsoft is aggressively pushing its productivity tools, cloud infrastructure, Surface tablets, Cortana and artificial intelligence to enhance its presence in the enterprise, he says.

Brace for minor impact

Apple’s efforts in the enterprise aren’t as expansive as Microsoft’s, but they also don’t begin and end with IBM, says Van Baker, research vice president at Gartner. The iPhone maker is broadening its enterprise reach beyond IBM with its SAP and Cisco partnerships as well, he says.

“The Microsoft deal is hardware centric as I see it and is focused on Surface tablets running Windows 10 so basically they are PC apps,” Baker says. Apple’s deal with IBM includes hardware but the greater focus is on mobile software and support, so the impact of Microsoft’s partnership with IBM will be minimal to Apple’s momentum in the enterprise, according to Baker.

“I still see Apple dominating the smartphone and tablet use in the enterprise but this will enhance Microsoft's position in the PC segment,” Baker says. “The Surface is used primarily as a notebook while the iPad is used primarily as a tablet. There is some overlap and they will compete in some segments but this will not fundamentally change the mobile landscape in the enterprise.”

 

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