Welcome To The Era Of Co-Opetition

The deal beetween Apple and IBM signals a change in how large technology businesses approach competition, says Anne Cave-Penney from Capgemini

The technology sector never stands, with exciting breakthroughs, mergers and acquisitions happening on an almost daily basis. Usually technology giants buy innovative start-ups in order to compete with rival technology giants. However, recent moves by the big players have brought in a transition era of a different kind – the era of co-opetition.

The recent news of the partnership between Apple and IBM to produce 100 enterprise-based apps for iPhones and iPads may have come as a surprise to the market but, when looking at the deal closer, it’s hard to see why it hasn’t happened sooner. The benefits for each of these one-time fierce rivals are numerous.

Better together

For Apple this is the breakthrough into the corporate world it has been looking for. Historically, the consumer tech giant has not always been the obvious choice for the enterprise, often living in Microsoft’s shadow and – in the mobile era – Blackberry’s, due to its consumer-driven design. However, it’s hard to think of a business with a stronger reputation in the enterprise market than IBM, well-known for its big data and analytics capabilities. With this credible backing Apple is sure to gain the confidence of CIOs and IT managers previously reluctant to trust and adopt a predominantly consumer brand.

alphaspiritFor IBM the benefits may not be as immediately clear but, with revenue streams stagnating over recent years, the company will benefit from its partner’s consumer appeal and gain new markets by selling iPads and iPhones pre-installed with the new software to business clients. This could also help benefit the iPad, which suffered a drop in sales in the first quarter of 2014 compared to last year, a reason CEO Tim Cook said Apple was looking to move further into the enterprise market with IBM.

There are some sections of the business world still apprehensive about the deal, lacking confidence in IBM’s ability in the mobility management market given its newcomer status in this area.

Others have questioned whether an iOS centred mobility management solution can do well in a Bring Your Own Device dominated market. With each app produced on the iOS operating system, workers with systems such as Android won’t be able to use the apps, therefore rendering them useless for work purposes. It was announced at Google I/O last month that Android now has more than one billion active users, so we are talking about a sizable market.

What is clear from this announcement is both Apple and IBM feel they will benefit more from working together than against each other. Apple can show IBM how to simplify the user experience while IBM can share its security credentials that have made it so trusted amongst the enterprise world. It’s a growing trend in the technology world, with big companies – from Adobe and SAP to Microsoft and Cisco – forming partnerships in order to benefit from the reach and knowledge that comes with a well-known and successful name.

The backdrop to this is ‘the consumerisation of IT’. It’s simple: CIOs and IT managers don’t want a one-size fits all solution. They want more choice. This is where these big-name partnerships come in. Each brand has different strengths they can bring to the table and, with the expansion of cloud based technology, it has never been easier for companies to integrate and manage best of breed services from several suppliers at once.

With more of these partnerships sure to hit the market over the next few years, we will be eager to see where the next breakthrough comes from. It’s hard not to see the Apple and IBM deal as anything short of exciting. With talk of the apps focusing on big data and analytics, maybe we could all soon have our own mini Watson on our smartphones… how exciting would that be? For now though the anticipation will grow as we wait to see how the first Apple/ IBM apps revolutionise the enterprise world and, more importantly, how their rivals will react. Over to you – Microsoft and Blackberry.

This opinion was contributed by Anne Cave-Penney, alliance director at Capgemini UK.

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