Apple (NASDAQ:AAPL) and IBM (NYSE:IBM) have just partnered to deliver a slew of big data analytics crossed with iPad apps to the enterprise. In my earlier post, I described the features and enumerated benefits for both the companies. Here I will discuss some possible other benefits, although some may be a bit speculative.
First, to reiterate, the four basic services announced:
- Specific big data mobile applications, (100+ in the making)
- A new iOS tailored cloud service,
- New enterprise level AppleCare support services from Apple, and
- New package from IBM for mobile device management
The objective is with regard to big data analytics:
- To put big data at the user's fingertips
- To deliver the promise of mobility in a big way -- that takes Apple and IBM doing it.
Source: IBM website
Besides the more obvious benefits, we need to look deeper and perhaps we will see some other ones.
For example, Apple has always had this problem in the enterprise with legitimacy. Businesses flocked to Microsoft (NASDAQ:MSFT) based hardware for the low initial costs, and naturally the IT departments were filled with first DOS and then Windows specialists. While many of these rationally avoided the platform religion wars, some took on the Microsoft mantra that "Macs are just toys," etc. On top of that, Microsoft went to great pains to always build incompatibilities into their software in order to marginalize Apple and other competitors.
Thus, the antipathy of IT service people to Apple grew to a virtual frenzy. (The fact that Apple did almost nothing to court the business user, especially in terms of service, did nothing to help their cause.) Who did what to whom is not the issue here. What is, however, is the simple fact that a strong antipathy continues to exist, and while there is a rational basis for a certain degree for this, a large part is simply the fact that to manage Macs one has to learn how to do so, and IT personnel all have too much on their plates to begin with without any extra work.
This antipathy extends to iOS, since for many, the mantra "Apple is bad" extends to all things Cupertino.
This is my point. IBM is the epitome of the business world. They stand for all that is prized by the enterprise. No wishy-washy, artsy graphic design people here [tongue in cheek please!]. They mean serious business. So when they not just endorse iOS, but embrace it whole-heartedly and partner with Apple in a big way, this has to change the perception of Apple in the big enterprise.
So the first important benefit of this section is that this is going be a push not only for iOS devices, but for the Mac as well. Many people who use an iPad will want to switch to a Mac for their laptop when given the opportunity. They work together so well, it will be natural to do so.
Oddly, Microsoft itself got its leg up and into business precisely because of its partnering with IBM that initiated MS-DOS. Ironic that Apple may now do the same -- again due to IBM.
As noted in my previous post, IBM wants to build out their cloud services. This will be a boon to them as they will have the most complete and secure system for integrating iPads.
On a more subtle note, for the IBM programmers, I have to believe that for some, the interaction with their Apple counterparts will be an eye opener, to see how the attention to details of usability and design are raised in their importance. (Not that Apple developers will not be learning a lot as well.) Programmers are proud of their work. It is essentially a creative process. They are engineers building intricate, invisible structures and machines beneath the visible program behavior.
One has to wonder if perhaps there is more to this partnership that remains to be revealed.
The first thing that comes to mind is the Mac. I can imagine that if the current partnership works out well, particularly for the service portion of the project, this could be expanded to include the Mac line as well. Obviously, this would be an enormous push for Apple. It would solve a very long standing problem of service for them. But obviously, this needs to go slowly.
IBM some time ago bought flash storage manufacturer Texas Memory Systems. Now its FlashSystem Line has pushed it to be the number one supplier of Sold State Arrays (SSA) for 2013. [source]
Apple was a pioneer in the use of Solid State Drives (SSD), initially in their MacBook Air line. They have also been the first to move to the much faster PCIe based memory system, replacing the SATA based solid state drives. The two are similar in that they are solid state memory (i.e., integrated circuit chips) substituting for the older hard disks. Even though the SSD is many times faster than a spinning disk drive, the SSA is faster still as it uses wider and more direct read/write channels.
Apple uses PCIe based SSA drives in MacBooks and the new Mac Pro. Perhaps part of the overall deal is for Apple to use IBM parts. That would be a pretty big order.
IBM will pour US$3 billion into computing and chip materials research over the next five years, as it rethinks computer design and looks to a future that may not involve silicon chips.
Part of that research is to reach the 7 nm process level, and beyond.
Apple has two interests in this. First, they have continued to surprise the integrated chip world with their bold designs of their A-series processors. (See How a processor works.) They are always trying to squeeze the best processing power out of a given design system. They would love to get their hands on cutting-edge chip processes technology.
Now add that Apple would also like to shift its processor fabrication away from Samsung (OTC:SSNLF), due to other conflicts. With all this, one has to wonder if Apple is working with IBM in this field as well.
Tim Cook worked for 12 years in IBM's personal computer business, ultimately serving as the director of North American Fulfillment. So he knows IBM very well. If you watch the CNBC interview of him and Ginni Rometty, you can see that the connection between them is real. It is therefore logical to think that they may very well be planning more partnerships for the future.
Disclosure: The author is long AAPL. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.