Apple, IBM Bury The Sledgehammer In 'Landmark' Deal

Apparently “we are one people” indeed, just as Big Brother harangued 30 years ago. After the stock market closed yesterday, Apple CEO Tim Cook and IBM CEO Virginia Rometty took to CNBC to announce an exclusive business enterprise partnership that would once have seemed dystopian at best. They also conducted interviews with leading digital and print tech journalists — presumably to smooth the feathers of ruffled Apple fanboys as much as to maximize the business impact of the new alliance.

“IBM said it would create a class of more than 100 business applications exclusively for iPhones and iPads to run on Apple's iOS platform,” writes CNBC.com’s Matt Hunter in a re-cap of the interview with Josh Lipton. “In return, IBM will sell Apple's products with 100 industry-specific apps to its clients worldwide.”

Video of the interview is embedded in Hunter’s story; a transcript can be read here.

“In ’84, we were competitors. In 2014, I don't think you can find two more complementary companies, Cook told the Wall Street Journal’s Daisuke Wakabayashi. “This is a really landmark deal.”

“‘This is just the beginning,’ said Rometty, citing a statistic that most smartphones inside companies are used only for email and calendar. She said the companies hope to create new, serious business applications,” Wakabayashi reports.

The two companies “have been working together on the venture for several months,” report the New York Times’ Brian X. Chen and Steve Lohr. “The applications will be tailored for use in industries including retail, health care, transportation, banking, insurance and telecommunications.”

“We’ve already seen some unbelievable work,” Cook tells the Times, while Rometty asserted “the long-term goal … is to use the technology to ‘reimagine how work is done’ and to ‘unlock value, remake professions and transform companies.’”

Some examples they offer are “an airline pilot tapping a calculation of updated fuel use and flight paths as weather conditions change, or an insurance agent calibrating risk assessments of a potential client.”

Sitting with Re/code’s Arik Hesseldahl, Cook and Rometty “described the tie-up as one that only the two companies could deliver.”

“‘If you were building a puzzle, they would fit nicely together with no overlap,’ Cook said of the relationship,” Hesseldahl continues. “We do not compete on anything. And when you do that you end up with something better than either of you could produce yourself.” 

(Don’t miss Benjamin Wallace’s profile of Re/code co-CEO and co-executive editor Kara Swisher in New York this week for well-sourced insight into the Silicon Valley media/PR game.)

“Analysts applauded the move, which will expand Apple's consumer base into business and burnish IBM's big-data analytics capabilities,” report USA Today’s Gary Strauss and Mike Snider. 

“This seems to be one of these rare win-win-win things,” said Richard Doherty, director of the Envisioneering Group. “I just see less indecision and more satisfaction and maybe people at work getting to enjoy an iPad on the company's dime instead of them having to go out and buy it.”

Forrester Research analyst Frank Gillett “hailed the deal as a ‘landmark agreement,’” report the Financial Times’ Tim Bradshaw and Richard Waters. “Apple has been dragged into the enterprise by individuals that want the same mobile convenience on the job that they use in their personal lives, but has resisted servicing enterprises for fear of losing its famed focus on top quality user experience,” Gillett said.

Microsoft and BlackBerry are expected to take a hit.

“Apple just took a sword and just stabbed it right in the heart of BlackBerry and said, ‘You're done,’” said Ross Gerber, CEO of wealth management firm Gerber Kawasaki, reports CNBC’s Hunter.

The deal, in retrospect, may seem more inevitable than it does on first blush. Cook, as many stories point out, worked in the personal computer division at IBM for 12 years though 1994 and held two other executive positions elsewhere before joining Apple. And the once fierce competition between the two companies “eased as IBM abandoned the PC business and instead focused on software and services geared for corporate clients,” as Bloomberg’s Adam Satariano and Alex Barinka report.

But does aligning with Big Blue indicate that Apple is losing its edge on making innovative products that will excite the digerati? No way.

“At the very end [of the CNBC interview], the journalist asks Cook about Eddy Cue’s recent comment that Apple’s 2014 product pipeline is the best he has seen in 25 years at the company,” writes Cult of Mac’s Alex Heath. “‘I’d agree with Eddy,’ said Cook with a laugh.”

Recommend (4)
1 comment about "Apple, IBM Bury The Sledgehammer In 'Landmark' Deal".
  1. Adam Hartung from spark partners , July 28, 2014 at 2:46 p.m.
    According to Forbes this represents a direct assault on the long-term stranglehold Microsoft has had on Value Added Resellers to enterprises. Spells a real risk for Microsoft shareholders http://onforb.es/1pmyGZa