Apple in the Enterprise: Microsoft Partners Help Apple Get Down to Business

Use of iPads, iPhones and Macs by businesses is going through the roof. Despite a history of courting consumers, Apple has a growing need for partners who can integrate the company's hardware with Microsoft software and networks.

The old adage, "If you can't beat them, join them," is resonating across the Microsoft channel these days as the proliferation of Apple iPhones, iPads and Macs shows no sign of slowing down.

Partners can't even attend events at Microsoft headquarters in Redmond without seeing half of their peers taking notes on iPads or checking e-mail on iPhones. The result: more channel partners that have historically sold and supported Windows-based client solutions are for the first time getting up to speed on -- if not certified in -- iOS, the platform that powers iPhones and iPads.

It was once unthinkable that Apple Inc. would become a major presence in businesses outside of media and graphics arts departments that touted a few Macs. Yet that's exactly what is happening, and much of it is being fueled by the rapid growth of iPads, which weren't even available two years ago. Now they're omnipresent.

Sales of iPhones and iPads more than doubled in the quarter ended Dec. 31, Apple disclosed in its recent quarterly earnings report. During the three-month period, the company sold more than 37 million iPhones and 15.4 million iPads -- and the overall installed base of iPads topped 55 million (devices based on iOS altogether total more than 315 million units). For the first time, the number of iPads shipped outsold all of the major PC vendors -- Hewlett-Packard Co. came closest with 15.1 million units, according to IDC's latest PC Tracker report.

IDC is predicting Apple will sell 52.6 million iPads this year, up nearly 37 percent from 38.3 million in 2011. Of those sales last year, IDC estimates 6.4 percent, or 2.4 million units, were sold into commercial accounts. IDC is forecasting 8 percent of iPad sales will come from commercial customers this year, amounting to 4.2 million devices, and 10 percent by 2014, when sales of iPad sales are projected to total 65 million units. But given the recent reports of increased sales to businesses, Tom Mainelli, an IDC research director for mobile-connected devices, says he might increase the forecast percentage of commercial shipments this month.

Further validating Apple's inroads into businesses, more than one in five workers, or 21 percent, use at least one Apple product for work, according to a survey of 10,000 workers worldwide by Forrester Research Inc. published in late January. Much of that is being driven by growth of iPads and iPhones, though the use of Macs is increasing as well.

[Click on image for larger view.]
Figure 1. 1 in 5 Use Apple Products for Business
("Apple Infiltrates the Enterprise and Reshapes the Markets for Personal Devices at Work," Forrester Research Inc., January 2011)

Currently 27 percent of enterprises now support the iPad, and another 31 percent say they're interested in doing so, according to a separate survey of 3,350 IT hardware decision makers in North America and Western Europe by Forrester Research.

This year 55 percent of IT decision makers will support the iPhone, up from 37 percent last year. And 46 percent of enterprises issued Macs to employees last year, up more than 50 percent in two years.

This is an unlikely turn of events. The late Steve Jobs, Apple founder and CEO, is known to have eschewed taking great pains to boost enterprise sales of the company's products, saying IT wanted too much control. While Jobs didn't go out of his way to start targeting small to midsize business (SMB) and enterprise customers, shortly after the release of the iPhone the company supported Exchange integration through Microsoft ActiveSync, and has more recently talked up IT's embrace of the iPhone and iPad.

"The thing that's very different about the iPad is you can see it beginning to appear virtually everywhere," said new Apple CEO Tim Cook, speaking on the company's earnings call in late January. "The enterprise has adopted it in a very large percentage of the Fortune 500."

Company officials pointed to customers such as real estate broker Coldwell Banker Real Estate LLC and retailer Bed Bath & Beyond Inc., as well as broad interest in sectors such as pharmaceuticals, health care, financial services and manufacturing.

Apple Targets Microsoft Partners
Over the past year, prior to Jobs' resignation as CEO in August and subsequent passing in October, Apple has turned to the channel to step up its effort to help businesses support these devices within their enterprise systems.

Last year Apple hired longtime Microsoft channel executive Francois Daumard to assume the newly created role of iPhone and iPad channel development manager, to help bring on Microsoft partners to deploy these devices in accounts that require integration with Exchange and Windows Server environments. Apple has quietly built up a mobility practice looking to recruit partners in the Apple Consultants Network, or ACN. Daumard declined to comment, but those that have embarked on the ACN Mobility Technical Competency (MTC) say they like what he has done so far.

"Francois is a very strategic guy; he understands the channel well and is committed to help partners succeed," says Arlin Sorensen, founder and CEO of Harlan, Iowa-based Heartland Technology Solutions. "He has been someone we've worked with over the years [at Microsoft], and we continue to work with him in his role with Apple."

Marco Nielsen, director of services for Enterprise Mobile -- which last year was acquired by IT services firm Intermec Inc. -- was approached by Daumard shortly after Daumard arrived at Apple. Nielsen says Enterprise Mobile became one of the first to sign onto the Apple MTC, which he sees as the company's most significant move yet to recruit partners with experience in Microsoft environments.

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"They still don't have a partner program per se -- this is all part of the Apple Consultants Network," Nielsen says. "I see this as a move into the enterprise space. They're engaging with us and other [systems integrators] on how to get involved to make sure we're in the loop of information coming out. It will be interesting to see his roadmap and where he's going with it."

Not Your Typical Channel Program
For prospective ACN members, partners shouldn't look to it as a typical channel program, due to Apple's tight control over the distribution of its product, coupled with that fact that it doesn't offer discounts with the exception of the largest of deals. And even in those cases, the discounts are said to be modest. Some solution providers wish Apple would let them sell iPads even without the expectation of margins, just so they can offer them as a convenience to customers.

"As a reseller, we'd love to be able to resell the products," Sorensen says. "That's the biggest frustration we come across. Our customers come to us wanting iPads or iPhones and we can't sell them to them. Our model has been to sell all the solutions and ongoing support, and Apple has held the keys to that kingdom very tightly, so we have to send them elsewhere to source the product and then we can do our deal."

Sorensen says he's mystified as to why Apple doesn't let partners resell its products. "Why not let us sell them? We don't expect to make margin. We just would like to have the devices and source them," he says. "There's certainly a lot of mystery in the Apple side of the product line. We don't have any insight into their roadmap, and that gets frustrating at times, too. It's always a challenge to figure out who to talk to or how to get information or how to get support on tough issues. It would be nice to have the more-established partner program in place that we've experienced on the PC side for a long time."

Lacking such a program, Sorensen and other partners explain that they typically refer customers to a local Apple retail store or the company's own Web site, or through distribution. Leading distributors -- such as Ingram Micro Inc. and Tech Data Corp., among others -- handle iPad orders.

"Apple runs a pretty tight authorization process," says Kirk Robinson, Ingram Micro vice president of commercial markets. Ingram Micro has been holding events to enable channel partners to learn how to integrate iOS-based devices with enterprise systems. Apple has supported those events, according to Robinson.

ISV Support in the Works
Like services typically offered by distributors, Ingram Micro offers technical support, financing, forecasting and warehouse capabilities around large rollouts. The company is also looking to bring ISVs to the iOS environment not just from an application-distribution standpoint, but to provide integrated solutions.

"Right now we haven't come out with a final product or program; we're in the midst of working with the ISVs and looking at how that landscape can work with a win-win situation, [with] everyone making money, and what are the specific markets we want to start with," Robinson says. "It's definitely on our plate for 2012."

"We're seeing a lot more integration with tools that enterprises are starting to adopt deeper, such as the MobileIrons and AirWatches of the world."

David Uhler, National Director, Research and Development, Slalom Consulting

Another area on Ingram Micro's plate for 2012 is mobile device management, or MDM. A number of MDM vendors offer the ability to manage multidevice platforms, including Sybase Inc., Good Technology Inc., AirWatch LLC, MobileIron Inc., Zenprise Inc., SOTI Inc. and BoxTone, and security vendors McAfee Inc. and Symantec Corp. The new Microsoft System Center 2012 also includes support for iOS devices. Demand for these tools is only likely to increase as the number of different devices increases and customers look to employ policy management to mobile devices.

"We're seeing a lot more integration with tools that enterprises are starting to adopt deeper, such as the MobileIrons and AirWatches of the world," says David Uhler, national director of research and development at Seattle-based Slalom Consulting, an ACN member. "They're not just trying to lock down one or two apps, but they want to make sure the right people have the right applications in their suite and make sure people have the right data access."

Slalom and Avanade Inc. are among a growing number of large systems integration firms with large Microsoft-centric consulting practices that are working with blue-chip customers to integrate iOS devices with enterprise systems and applications. Uhler says he has spent many years working with the Apple platform and its Objective-C programming language. Over the past two-plus years, there has been increased demand by customers to provide Microsoft Exchange integration with iPhones, and more recently with iPads. Now there's growing demand to provide SQL Server Integration Services (SSIS) and SharePoint Server access on iPads as well.

"Now we're seeing penetration to real line-of-business apps and computing work on that device," Uhler says. "No longer is it checking and reviewing information -- it's approving expense reports, doing time entry, or completing orders and shipment status for companies doing distribution. It's really getting to the point that these are first-class business machines."

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There are still some limitations. A key one, many partners point out, is lack of direct integration with Microsoft Active Directory, which would enable iPads and iPhones to use Active Directory authentication and single sign-on. But that support is said to be imminent, though Apple hasn't officially announced that. Yet as iPads access enterprise networks in other ways, such as with the Citrix Systems Receiver app for terminal sessions, some IT shops are taking a harder look at taking more control of these devices.

While it started with many clients bringing their own iPads to work, now many clients are purchasing them for their employees, according to solution providers. Even some solution providers are equipping their employees with iPads, such as Little Rock, Ark.-based Innovative Systems Inc. (ISI).

"We've got iPads for the entire staff," says Robert Lindley, ISI president. "Now they don't need their laptop when they travel; the iPad seems to be the device going out." Most of ISI's clients are small businesses such as law firms and health-care providers, but there's always an interest in iPads, according to Lindley. That's why he decided to get one of his techs certified in the Apple MTC. "We see more and more of our customers buying Apple products and this is a point of differentiation for us," Lindley says.

Partnering with the Apple Store
Because the Apple ACN doesn't provide leads (though it has a searchable online database), Lindley relies on the new Apple retail store that recently opened in Little Rock. While Apple has a relationship with OnForce Inc., a Lexington, Mass., company that provides referrals to local contractors, Lindley has been able to show that he has a team of technicians and seven Microsoft Partner Network competencies to provide integration with Windows-based networks.

"iPads are popping up everywhere, and the one commonality with all these networks that the iPad is getting brought into is they're all Microsoft networks, and people are really starting to manage them like they manage other devices."

Cohen Barnes, CEO, TBC Net

"We made a point of driving deep in our relationship with the store, attending some of the in-store seminars that they've had and also developing a one-to-one relationship with the business development manager," Lindley says. So far, he has received 10 referrals from the local Apple store.

Cohen Barnes, CEO of TBC Net, a Microsoft partner based in Sycamore, Ill., also has established a relationship with an Apple store that's about 45 minutes away from his shop. Barnes says he decided to have a member of his team join the ACN in order to pick up new business that may have otherwise been out of the solution provider's reach. Seeing the growth of iPads in business and in many of the school districts he services, he felt the new Apple MTC would allow him to integrate those devices with their existing systems.

As of early February, Barnes says there were only 140 solution providers with MTC certification. "If we can get in at the beginning of this, it's going to be that differentiator that's going to put us in front of new people that we never would have been able to get in front of before," Barnes says.

"iPads are popping up everywhere, and the one commonality with all these networks that the iPad is getting brought into is they're all Microsoft networks, and people are really starting to manage them like they manage other devices," Barnes says. "They know they can't stop them from coming in, so network administrators out there and companies out there are wondering how they're going to be able to manage and maintain what could be relatively decent-sized Apple implementations."

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