APPLE OVERTAKES OLD RIVAL IBM

The 'bring-your-own' boom has put Apple in the corporate driving seat

In a bizarre change of fortunes, it looks like Apple is getting ready to swallow IBM. “You won’t get fired for buying Apple,” is the new mantra of corporate IT.

Devices plus cloud plus analytics equals success in the ‘enterprise’ technology space; Apple had cool devices and IBM had powerful cloud and analytics solutions. When they partnered in 2014 to bring this combination to the corporate market, many eyebrows were raised, but both companies have benefited from this alliance.

Together they have built enterprise applications that use the most modern mobile devices, and are powered by the most sophisticated data algorithms. Despite their contradictory corporate cultures, their collaborative business model has proved complementary.

The penny dropped for IBM with the launch of the iPhone 6. IBM’s business is mainly consulting, and an internal survey discovered that 97% of IBM’s own consultants were using iPad and iPhone 6. It was time to back the winning horse in enterprise devices.

Behind the scenes there’s another reason Apple was so eager to hook up with IBM: Watson. IBM was leading the field in cognitive systems, super-intelligent machines, and Apple needed that technology for Siri, smart apps and the internet of things – and to compete with Google’s Brain and Microsoft’s Adam. Now every Apple device is powered by IBM in the cloud, and it’s super secure.

Apple has gone from little upstart to the most valuable tech company. Now it’s about to eclipse IBM in its own backyard; because the brand in your hand is the one everyone talks about, not the unseen systems and software driving it.

In this clash of the tech titans, the biggest loser is Microsoft.


ANALYSIS >> SYNTHESIS: How this scenario came to be

Ultimately, Apple had a choice. Remain a very successful consumer focused technology company, or get into bed permanently with their favourite corporate partner, IBM. In the end, the only way to continue to compete with a resurgent Microsoft was to become the new IBM.
But wait, wasn’t IBM the original business computer company, and didn’t Apple see it as ‘Big Brother’, trying to control the world? Yes, and yes, and that’s why it’s so ironic, that Apple has, in a way, turned to IBM to ensure its future survival.
Let’s unpack that idea. When Apple started with computers for people, rather than mainframes for business, IBM was quick to hijack that idea with the ‘personal computer’, the IBM PC. With Microsoft’s operating system, the IBM PC became the ‘industry standard’ for personal computers and was adopted by big and small business alike. It was a revolution, make no mistake.
Then things became too personal for IBM, who after all made most of their profits from big companies. They sold the PC business to Lenovo, and soon were mainly involved in big iron, analytics and cloud services. And artificial intelligence.
Apple, on the other hand, became the biggest company on the success of the iPad and iPhone, and the platforms for selling music, books and apps online. And they still made great personal computers. As more business people were using Apple devices in big companies, it made sense for Apple to partner with their old rival, IBM, who knew how to make servicing those accounts a profitable business.
But even more important was Watson and its AI successors. Apple needed them for Siri, and to compete with Google’s Brain and Microsoft’s Adam. Cloud services that aren’t super intelligent or adaptable are no use at all. The ‘Sputnik moment’ came for Apple when hackers exposed nude celebrity photos stored in iCloud. Apple had been using consumer products to do a global job, and they wouldn’t meet corporate enterprise standards. IBM could provide CIA-level security.
IBM had an ‘Aha moment’ of its own with the launch of the iPhone 6. An internal survey revealed that the majority of IBM employees preferred Apple devices over Lenovo – at the office. It was time to back a winning brand, and build services around the dominant platform.
Now Apple is on the verge of eclipsing the IBM business in corporate America. IBM, on the other hand, has found a new lease of life as Apple’s preferred reseller and support partner. How the tables have turned!

Warning: Hazardous thinking at work

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