E-Commerce

Apple's B2B App Store: Why it's a big enterprise deal

Larry Dignan lists four reasons why it's a big deal that Apple's B2B App Store went live last week and that the company is taking the enterprise seriously.

This is a guest post from Larry Dignan of TechRepublic sister site ZDNet. You can follow Larry on the ZDNet blog Between the Lines, or subscribe to the RSS feed.

Apple’s B2B App Store went live last week and it is the latest signal that the company is taking the enterprise seriously. The larger questions revolve around whether Apple had to launch the B2B App Store to get ahead of more traditionally enterprise-friendly rivals on deck or simply sees a big opportunity to cement its current momentum in corporations.

The B2B App Store is designed to accommodate volume licensing so companies can buy multiple copies of an application and distribute them to employees. If you wanted to outfit a unit, say a sales team, a company would need each employee to download an app and then expense it. That’s not how businesses operate. Volume purchases are usually the rule.

Tim Cook, acting CEO of Apple, touted enterprise momentum on the company’s fiscal third quarter earnings call. Apple has noted pilots and implementations for iPhones and iPads and has a nice chunk of Fortune 500 companies interested. With its B2B App Store, Apple is backing up its talk with some action.

“The B2B App Store is recognizing that Apple came into the enterprise through the back door because employees brought iPhones and iPads to work,” said Carl Howe, an analyst at Yankee Group. “Why not make it easier for the enterprise as opposed to making them jump through consumer hoops that aren’t well suited to the way businesses buy.”

Here’s a look at four messages delivered through Apple’s B2B App Store launch.

Apple is courting the enterprise. Apple may be a consumer-first company but it’s glaringly obvious that it is serious about the enterprise prospects. It’s likely that Apple accidentally got enterprise traction, but now it’s running with the ball.

The company also likely realizes that up-and-coming rivals, notably HP and Research in Motion, already have multiple stakes in the business technology space that may be an advantage in the tablet market. HP and RIM can both bundle their tablets in broader deals. HP and RIM are also much more likely to play the volume discount game, according to Forrester Research.

In other words, Apple has to court the enterprise at least a bit and be obvious about it. Contrary to popular perception, Apple has always had business in mind—not that it had an enterprise developer license the day the App Store launched.

Apple needed a B2B App Store. In many respects, Apple had no choice but to launch a B2B App Store. Apple announced the B2B App Store along with international App Store price changes July 13 and pushed it live a week later. The move makes sense on many fronts.
  • First, the B2B App Store solves the volume purchasing problem.
  • Second, the B2B App Store allows for custom apps to be delivered between individual companies.
  • And by easing distribution, Apple may garner more of those custom applications.

James Buchanan, a senior director at SAP’s Sybase, said the B2B App Store is “a great step forward.” After all, Sybase and SAP plan to deliver anywhere from 40 to 50 customizable mobile apps by the end of the year. “We now have more flexibility to meet customer needs,” said Buchanan. “A lot of enterprise customers have custom data and process needs. The B2B App Store allows us to tailor apps for those needs.”

Strategically, the B2B App Store solves a few conundrums. First, Howe argued that RIM’s app marketplace is essentially a B2B store already just based on the selection of apps. Android allows for multiple app stores and enterprises can distribute mobile software via side loading. Apple has one app distribution point and if it wants enterprise customers it had to create a B2B neighborhood.

Now Apple can be seen in a leadership position in the B2B app space.

Related: SAP, Sybase roll out mobile apps for business (screenshots)

The opportunity for Apple resides in custom apps. As far as business goes, the custom apps that will be available in the B2B App Store are critical. Why? Lock-in.

Let’s face it: Corporate IT buyers are a slow moving bunch. Companies developed applications on IE 6 and many are still keeping that browser even though Microsoft is begging them to decommission it over security risks.

If an enterprise bets on the iOS for a custom app, it’s not likely to move off the platform any time soon.

Say Boeing wanted to build a custom iOS app for Continental United. Distributing that app would require a posting on an intranet and then some hurdles installing it. At scale, that process is painful to say the least. The B2B App Store can ease a lot of pain.

Boeing’s Jeppesen unit, which provides charting, flight plans and crew management software to the aviation industry, reckons that the B2B App Store will make distribution easier. Chris Kiley, Jeppesen senior manager of Web and mobile solutions, said that most of his company’s apps would fall in the custom category.

Jeppesen so far is working solely on the iOS platform, but is planning Android apps at some point. To date, Jeppesen has found that its apps work best on a tablet so its focus thus far has been on the iPad. “This environment will enable us to build better and more powerful apps supporting our industries specific needs,” said Kiley. “B2B will allow us to better manage specific app versions among a large customer base.”

There’s an enterprise learning curve with Apple. Perhaps more importantly, the B2B App Store represents a bit of an enterprise learning curve for Apple.

As noted by Sybase’s Eric Lai last week, the B2B App Store builds off of a similar effort for the education market. That effort worked, but was also a bit clunky. Jim Siegl, a technology architect with the Fairfax County (VA) school district, has documented how the education volume purchase program worked.

The upshot is that Apple cut a bunch of steps from the education volume purchase process to the enterprise one. Granted, some of the hassle with the education version revolved around sales tax and credit card use. Educational institutions generally don’t use credit cards to buy and don’t need sales taxes.

Combine the volume purchase pricing with some Apple-specific negotiation tactics that are emerging and it looks like the company is willing to meet corporations part way.

Add it up and enterprises are likely to respond to Apple’s B2B App Store. However, there are some wild cards that may derail mass enterprise adoption.

Siegl noted a few potential deal breakers, but the largest one may be Apple’s approval process. According to Siegl, Apple will need to log in and operate an application. This requirement isn’t all that shocking—it’s Apple’s app quality control—but companies will need to set up a generic app with dummy data to protect sensitive business data.

In its guide on the volume purchasing program, Apple said:

Each app, as well as each version (update) of the app, submitted for custom B2B distribution goes through an app review process with Apple. The same app review guidelines for App Store apps apply to custom B2B apps.

If your app contains sensitive business data, you may want to include an authentication mechanism within the app. Custom B2B apps by themselves are not secured by Apple, and the security of data within the app is the responsibility of the developer. Apple highly recommends using iOS best practices for in-app authentication and encryption.

To verify that custom B2B apps meet the review guidelines, Apple will need to log in and operate the application. Work with your developer or business partner to determine how to meet this requirement with appropriate handling of proprietary or sensitive business data. You may want to provide generic test accounts or sanitized sample data to protect confidentiality for the purposes of app review.

Nevertheless, the review process may not be a deal breaker. Many companies are likely to give the program a spin by providing contact information, a corporate credit card and Dun & Bradstreet number.

Related: Deep Dive into Apple’s New Volume Purchase Program for Businesses

11 comments
Darwin 62
Darwin 62

If the server apps are all going to cloud to be accessed by the best browser or an app that is merely a taylored browser, then Apple is heading down the path to own the client side! The server side can continue to be big box intel who cares who makes it, just us IT pros. Or the server side can go back to the mainframe where it is best server! ;-)

jwilly71
jwilly71

Yeah Enterprise is all about iPads and iPhones. Come on people pull your head out of the sand. They proved with the release of Lion Server that they have given up on Enterprise. They went from Snow Leopard which was a half baked attempt at a small business server (not enterprise) and is now a $49 product that is clearly geared towards iOS devices and they stopped making server hardware. Don't even get me started on trying to get their laptops/desktops to be compliant with Enterprise level security standards. They need to stick with making gadgets and sleek laptops that are designed to be used for personal use and stop looking idiots in the enterprise space.

wizard57m-cnet
wizard57m-cnet

Larry, Please explain HOW Apple introducing a B2B app store on July 13th, then going "live" with it one week later gives it this high accolade? Leadership position? More likely a "we have one now too" position. Time will tell if Apple's venture into B2B apps deserves to be called one of leadership. No, I do not count Angry Birds or iFart apps as B2B.

tomeedu
tomeedu

Why dont speak about really business apps? Like "Balanced Scorecard for iPad" , "Roambi", "Business Model Toolbox",... business intelligence apps that helps our companies to control indicators, business plan, strategy,....

biffobabs
biffobabs

If Apple were that serious about the enterprise market, they should have continued development of the XServe instead of leaving us with half baked Mac Pro Servers. You don't fool us Apple....

adornoe
adornoe

by businesses. Apple has not been actively recruiting businesses for use of their iProducts, and is just trying to take advantage of the luck that some people have brought to Apple by bringing their iGadgets to their place of work. It's just an attempt to take advantage of something they hadn't planned on, but, it's too transparent and most businesses won't buy into tactic. Besides, businesses aren't about to buy into the lock-in that Apple needs with their every product and/or service.

JonGauntt
JonGauntt

Just curious about what is available after enrolling. Since I work at a University a primary consideration is going to be whether or not this can be delegated to individuals or departments from our main purchasing office. The PCard option is very nice and looks like it would work well with our system, but I cannot see a single common login as being given out to everyone that would need it. Is there a way to customize or create sub-logins under the main account and designate payment options?

kutzcd
kutzcd

I work for an international firm and we have already begun rolling out iPads, iPhones, and Macs - totally PC until the iPhone was released. This is not just a fluke or a happy accident for Apple. Businesses are seeing this as an opportunity to reach out to more Clients. And Apple is carefully building on their growing business reputation. They are increasingly working with enterprise teams so their "closed system" is understood and performs properly. It's working - period.

adornoe
adornoe

Apple just lucked-in to the iGadget usage in the enterprise, but, most enterprises won't go beyond the acceptance, or the allowance, of the usage of those gadgets by their employees to become "more productive". Apple gadgets in businesses is mostly by accident and not by design.

adornoe
adornoe

Apple is not a real partner to the business environment, and what happened with iPad and iPHones is that, employees started bringing in their toys to work and Apple saw an opportunity to use that luck, and so, the B2B app store was "born". Apple's game has always been to take a mouse trap and make it better, because, when it comes to computers and tablets and smartphones, they didn't really "invent" anything; they just "reinvented" things with shinier exteriors and improved features. They're not a realistic player in the enterprise, and what they do get in that sector, is by luck. Their overall success is created by owning the whole computing experience when it comes to their devices and software, and that, in a way, is something that enterprise is not going to buy into, because, it's a way to get locked-in to ONE company for hardware and software. Apple does have a game, and they play it successfully, but it's a game being played on a very limited field where nobody else gets to join in the game. Eventually, that's going to hurt Apple, and their dependence on the few products they do have is bound to bring them down. iPods will be the first to go, since they're very redundant with smartphones. iPhones won't be as much of a novelty as they once were, and with the competition creating their own smartphones which are as capable or better, that sector won't be seen as much of a "winner" for Apple. iPads are getting more and more competition, and once the market matures and other manufacturers get the form-factor and the prices and features down pat, iPads will be relegated to just "also rans". Then, there is the Macs, which are being relegated to just big iOS devices, with Lion. They're supposed to become "servers" for support of a customer's set of Apple devices. The way I see it, by relegating those very powerful computers to just being slaves to Apple's iCloud, those Macs will become less and less desirable; they'll just become shiny ornaments in living room center tables. ;) Apple is nothing more than a stock bubble, and Apple's cash-on-hand will come in handy when that bubble finally bursts .

kutzcd
kutzcd

It's not luck when they've stayed one step ahead of the entire industry at every turn. Jobs and Apple have had a plan every since his return. It's like any game where one team plays their game to perfection and the other team is made to alter their game plan the whole time - playing catch up. Apple has taken a holistic approach to the industry while everyone else has focused on one industry or population over the other. Or worse, taken a shotgun to the general population hoping it hits the target audience. I know it seems like luck, but just look at the last ten years. And not just the enterprise side of it. They have a plan and I think now that entertainment is mostly covered, enterprise is next.