Businesses warming up to the iPhone
Businesses are gradually getting used to the idea of using iPhones in the enterprise, but Apple has a long way to go.
(Credit: Apple)Apple has captivated the general public with the iPhone, but has it convinced the business world to take the plunge?
Even after the March preview of the "business-friendly" iPhone 2.0 software for the iPhone released in July, it seems that most iPhones are being purchased by individuals rather than corporations, who still look first at Research In Motion's BlackBerry when it comes to equipping their workers with mobile computers.
But the iPhone is making a guerrilla attack on the business world, brought into the corporate world by influential executives, CIOs rethinking their approach to deploying technology, and younger workers who move seamlessly between their personal and business lives.
There are several high-profile businesses, such as Genentech and Disney (both with strong ties to Apple CEO Steve Jobs, of course), that have declared their intentions to work with Apple on deploying iPhones inside their corporations. That seems to be having the effect of increasing the overall number of business smartphone users, however, rather than turning the iPhone into any kind of "BlackBerry killer."
At Apple's Worldwide Developers Conference in June, Jobs said 33 percent of the Fortune 500 had participated in Apple's beta program for the iPhone 2.0 software. But RIM still dominates the market for mobile devices used for business purposes.
According to data from J. Gold Associates released in September, 65.5 percent of North American businesses that deploy mobile computers say they actively support the BlackBerry, compared with 22 percent that support Windows Mobile devices and just over 10 percent that support the iPhone.
There is some overlap in those numbers, represented by companies such as Chicago law firm Sonnenschein Nath & Rosenthal, a participant in Apple's beta program.
About half of CIO Andy Jurcyzk's 1,800 employees worldwide use some kind of mobile device, and at the moment, 200 of those people are using the iPhone 3G. Sonnenschein's employees who are deemed worthy of mobile computers can get the company to buy them a new mobile device every 24 months--provided that AT&T carries that device.
"My philosophy is that devices are personal, and it's difficult for organizations to standardize on a single device" given the wide range of preferences people have with mobile computers, Jurczyk said.
Not all organizations feel the same way, and have built up years of expertise managing the BlackBerry inside their walls. Frank Gillman, the CTO for Los Angeles law firm Allen Matkins, says there has been some interest in the iPhone among his constituents but he finds it more cost-effective to stay a BlackBerry shop.
"Our reasons for not doing so have more to do with the age-old issue of having a finite number of internal resources to support our firm's technology. Given our already significant investment in BlackBerry, we cannot make a strong business case for adopting yet another platform."
The BlackBerry is still by far the preferred choice of the enterprise, but the iPhone is gaining ground, according to J. Gold Associates.
(Credit: J. Gold Associates)That's just part of the uphill battle the iPhone faces in the enterprise. For one thing, Apple's dependence on a single carrier is a nonstarter for some companies that have long existing relationships with a different carrier, and enjoy the discounts that come along with that partnership.
And while Apple's 2.0 software update brought along several business-friendly features that improved the security and manageability of the device, some analyst firms that advise CIOs on how to spend their technology dollars still feel the iPhone's security isn't quite where it should be compared with other options in the market. Gartner, the 800-pound gorilla of IT consulting, gave the iPhone a thumbs-up in July after the release of the 2.0 software but noted that iPhone security isn't strong enough yet when it comes to custom applications on the device.
Jurcyzk is following the recommendations of J. Gold Associates by having his employees access secure corporate data through the iPhone's Safari browser backed by the firm's own security certificate. That way, no sensitive data actually resides on the device, but users can still open documents and view them with "full fidelity," which is a huge plus for traveling lawyers who need to review documents with clients anywhere and everywhere, he said.
There's also the issue that corporations will have to install iTunes on every iPhone user's computer, which might not be part of the standard application list employed by big conservative corporations that grudgingly allow their employees to check baseball scores on ESPN.com from their PCs. And some IT managers also like to lock down a specific collection of software on the mobile device itself, but have no real way of preventing an employee from going home and adding Asphalt 4: Elite Racing to their iPhone.
But small businesses don't have the same strict security and manageability requirements as larger enterprises, allowing them to move forward with iPhones more quickly than the big guys. Independent observers of that market are seeing more and more demand for iPhones among those types of customers, who fly under the radar individually but could add up to serious revenue for Apple.
While the iPhone may not be the ideal device from a manageability and security standpoint, it does come with high customer satisfaction ratings among business users.
(Credit: CC Cristiano Betta)And there's a sense inside some corporations that times are changing as mobile phones become computers that aren't just for business, and aren't just for fun. Executives and salespeople--the primary users of mobile computers in the enterprise--are constantly on the go, and an executive waiting for an airplane who pauses an episode of Mad Men to answer an e-mail from a client is a productive, accessible, and satisfied employee.
"Other devices are just hardcore e-mail devices, and even at that they don't render the messages well," Sonnenschein's Jurcyzk said. "I travel a lot and it's nice to have a personal aspect to my life, to look at photos of the family, to listen to music, or watch a movie. It's nice to have that other stuff."
Apple's not the only company adapting to that shift in how we use mobile computers. "The new BlackBerry Storm that is coming out this month from RIM/Verizon brings a lot of the iPhone design and features to the BlackBerry platform. Assuming the device works as advertised, we'll likely offer that as an option for our folks who want those types of features," Gillman said. Microsoft CEO Steve Ballmer has also said similar things about the need for future versions of Windows Mobile to cater to both personal and business tasks.
Before too long, businesses might decide that certain trade-offs regarding the manageability of their smartphones are worth making, so long as their concerns over security are met. Analysts expect Apple to improve the native security of the iPhone over the next several years, and it's also possible that a major third-party enterprise software vendor such as SAP will step forward with a product that does it for them.
Well over 200 business-related applications are available on the App Store that help make the iPhone easier to use in a corporate setting. If Apple finds a way to improve the security profile of the iPhone to allow organizations to develop custom applications that store sensitive data on the device, it will have another feather in its cap.
Still, J. Gold Associates predicts just 16 percent of U.S. corporations to have an active interest in the iPhone in three years. The iPhone isn't going to put RIM out of business just yet. But it is challenging the other company in its backyard, just as RIM doubles down with its efforts to make the BlackBerry more consumer-friendly with models like the Storm and the Bold. And it's making everyone more aware of the trade-offs and needs of mobile computer users in the enterprise, which will make everyone's product better in the long run.
And if Apple proves itself as an enterprise-friendly company with the iPhone, those famously stodgy CIOs might be tempted to take a second look at the Mac.
Tom Krazit writes about the ever-expanding world of Internet search, including Google, Yahoo, online advertising, and portals, as well as the evolution of mobile computing. He has written about traditional PC companies, chip manufacturers, and mobile computers, spending the last three years covering Apple. E-mail Tom. 
Three months ago we got a eMail from IT; Absolutely no iPhones on the network.
Two months ago we got a eMail from IT; iPhones are allowed, but you are on your own for support.
-- Turns out the assistant head to IT got a iPhone.
This month we got another eMail from IT; iPhones now have complete and total access to the entire network with full and complete support from IT.
-- Turns out the CEO got a iPhone.
IOW: Security-wise, they are about the same.
Also, the CEO has the perfect right to do as he or she wishes... it sucks sometimes, but in this particular case no harm done.
IOW: Security-wise, iPhone is worse.
Also, the "person" has the perfect right to comment as he or she wishes... It does sucks sometimes (as it probably does for this CEO's company - security-wise, at least), but in this case it's no problem, since most CEO's are smart enough to choose a BlackBerry or Windows Mobile smartphone over an iPhone.
Most business users need the ability to take contact details from the address book, emails and text messages and forward them on to other people. Until Apple address this huge flaw in the software it won't break into the business market.
No issue.
Since there is no security on the device, there's no way I can have company sensitive data on it. If lost, anyone can access all the information on the unit. :/
You can modify Exchange to not do that, y'know.
/P
He "wrote" our iPhone policy that day and several other managers have followed his lead.
BES is readily available, and most mid-to-large sized shops already have it. Not much different from needing a license for any other mobile push technology.
@aMUSICsite: you can shovel around vCards right now between iPhones, BBs, and WM handsets.
/P
1) In the US, AT&T won the right to exclusively market and sell the iPhone. You can unlock, but you're stuck with the mandatory contract to get a 3G. This is a marketing decision by Apple. They get kickbacks from the carrier. Exclusive deals mean higher kickbacks.
2) In the US, GSM isn't as all-conquering as in EMEA and other places. Carriers like Verizon are not GSM and those of us who live in places not well served by GSM can't use the iPhone.
Why is iPhone GSM only? Because that is the only way for Apple to make a world phone. Are they going to change that? Probably not real soon. iPhone is already the #1 handset in the US, why would they bother?
A
Heck, I can't even set an OOF on my Apple device. I would LOVE to have another mail client to use with Exchange.
Hear me, Apple? Either write a better mail client or let someone else do it. Right now that mail client is the biggest reason NOT to use it.
Goodbye. No sale. Thanks for coming.
"This somehow differs from the idea of having to support Blackberry's desktop sync utilities? "
Greatly. Quictime. iPodServices. iTunesHelper. Safari. MobileMe. These are all apps that get installed onto your system as part of your iTunes installation. Even if you uncheck the update options, they get auto-rechecked the next time updates are sent out. iTunes itself has become so bloated as to be compared to Microsoft. Find me someone who *likes* using iTunes and I'll show you hundreds more who are forced to use it because there isn't anything else out there so they are forced to use it. Look at the vulnerabilities it introduces. You decide to sync an iPhone and now you have to worry about Quicktime video vulnerabilities- a totally unrelated product other than iTunes uses it.
No sir, iTunes brings on its own 'world of hurt' as they say.
Safari is optional (or did you forget that part?). The rest are counted as subsystems of iTunes. They show up as different processes (in Windows, not OSX), but are part of the same package (and are updated all at the same time, making support far easier).
PS, Dan: Here's *one* who likes using iTunes. Now get to work on that list of "hundreds". ;)
/P
You have a choice of desktop or wireless sync, true - but circumstances differ.
Either way, you also get to support the existence of BES - either in your network, or give access to BES services from outside of your network, opening up a potential hole all by itself. This is something you don't have to do with the iPhone or WM.
The iPhone is an overpriced and under-featured consumer gadget. It is not for critical networks.
http://www.apple.com/webapps/productivity/bankofamericamobilebanking.html
Your point?
"I know several security managers for banks. Not one of them will even consider the notion of allowing an iPhone on their network."
In any network where security is important with sensitive data, you won't find the iPhone. Not at this time. In the future this may change, but unless the iPhone's OS is redone from scratch with security in mind, then it's not likely to be seen in use. RIM, Windows Mobile, Palm, etc. They have dealt with this enough to work with the enterprise market.
I expect the same market reaction to the Android platform.
rcrusoe wrote:
"Yep, most banks won't touch it."
Correct. And Bank of America is not available in many states (banking prohibitions vary per state). BoA is useless in those states for iPhone apps. A shame too.
Penguinisto wrote:
"Most banks won't touch Vista, either. "
Banks took until after 2002 before they even started migrating from OS2 to XP. Banks are typically very very slow adopters of any OS.
OTOH, rcrusoe blew apart most of the arguments right there concerning banks and what they will support for their external customers (w/ the BoA iPhone app). Furthermore, I can say with certainty that (most) banks are also among the earlier adopters of supporting customers on alternative OSes and browsers.
No cell phone is 100% secure. You have a more likely security breach from an unsecured workstation or loose lipped employees than you do from any properly set up phone, including the iPhone. What it comes down to is the wasted investment in the BES in hardware and software licenses, iTunes on a users' workstation (just block the Store's IP address with your internal firewall), and loosing "control" over your serfdom. It is an amazing piece of hardware which has allowed me to be more efficient in my organization, and I have yet to have yet to make a help desk call regarding my iPhone as opposed to the numerous phone calls about my Blackberry.
Once an iPhone is sync'ed with a PC, you cannont sync it with another without wiping the phone (unless it is jailbroken -- a whole other topic but impossible if your have proper IP filters in place). Whoa! Issue solved! Without access to the iTunes store, you cannot install Apps, even on the go.
The fact is that the iPhone is much more usable than my Blackberry, and I have more access to my files internally than I did with the Blackberry. Fewer calls to the help desk, more efficient, no BES server or licenses, and I didn't pay any more for the iPhone than the latest Blackberry. Isn't that the definition of a cost/benefit analysis?
The unit runs all apps as root and there is no security against that. Data on the phone is easily accessable by simply hooking up a sync cable and running backup which copies the entire unit to a local file. From that you can do whatever you want with the file.
The only security is the Exchange lock and that is easily broken- not as in cracked, but the phone crashes pretty easily if you use too many commands at once and it crashes. Often when it auto-restores from that crash, it does so at the normal menu and has bypassed the Exchange pin lock. I thought of this as an annoying bug, but I suppose it could be now counted as a vulnerability. Depends on how you look at it, I suppose.
Apple most likely isn't all that concerned as long as the iPhone sells to consumers. Apple probably doesn't even have enough internal developers to get the iPhone enterprise ready. Mobile OSX barely seems ready enough for consumer use since it's missing a number of standard Mobile OS capabilities. I'm certain the iPhone will get them, but no time soon.
- by Seaspray0 November 14, 2008 2:59 PM PST
- 1. Who went into the future and got the data for the "3 years from now"? Or is this just a projection?
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- by Tom Krazit November 15, 2008 11:15 AM PST
- 1. The three-years-on figures are projections made by J. Gold Associates.
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- by Seaspray0 November 16, 2008 7:17 AM PST
- It also says "He has covered traditional PC companies such as Dell and Hewlett-Packard, chip companies such as Intel and Advanced Micro Devices, and mobile computers ranging from Research In Motion's to Palm's". You forgot your roots, Tom. Today, the headline would be "apple headquarters gets flooded."
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- by Fil0403 November 17, 2008 2:48 AM PST
- Seaspray0, it's all actually very straightforward: CNET needs users (money) > most users like anti-Microsoft / pro-Apple/Google stories > CNET acts accordingly.
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Showing 1 of 2 pages (59 Comments)2. In the chart I also noticed that other brands rose just as significantly (percentage or volume wise, depending on the brand... i.e. windows mobile, linux, nokia) except for palm and blackberry (which trends down!) yet no mention or comparison. Blackberry usage is projected to decline while everyone else pretty much divides the spoils? Now that's news! And yet your title is "business warming up to the iphone". According to your chart, it is, but not just the iphone. Tom Krazit, if California had a major earthquake and sank into the ocean, would your headline read "apple headquarters gets flooded"?
2. I write about Apple, as it says in my bio. My job is to track what Apple is doing and how their products are faring, which is why the story is focused on Apple.
IOW: Who cares that RIM BlackBerry is still by far the business smartphones leader, or that Nokia is still by far the general smartphones leader, or that even Microsoft Windows Mobile phones have a far greater market-share than the Apple iPhone, and that most projections show that that will probably not change anytime soon? What matters is to follow the boat and praise the Apple iPhone! If history teach us anything, general media and users will continue bashing Microsoft and praising Apple, while reality (i.e. sales / market-share) will continue to contradict this.