During its recent earnings call, Apple CEO Tim Cook mentioned that the company is shifting its sights to the enterprise, where 94% of Fortune 500 have adopted iPads in some capacity, with relatively little effort expended by the company in this market. It's an enviable position to be in: launch a product targeted at one market and have an additional large market clamoring for the same product. Historically, Apple has had very limited success in the enterprise market, so what might this shift mean for companies considering the ubiquitous tablet?
Answers to the eternal question
While Apple likely won't answer that eternal question, one thing it can offer clarity on is how to leverage tablets in the enterprise space. I've admired Apple for "eating its own cooking" and using its products prominently to accomplish real tasks in its stores, where iPads serve as mobile cash registers. Apple handles a massive supply chain and maintains bread-and-butter enterprise applications like SAP. Presumably, Apple is using the iPad internally with these systems and processes, and it's pioneering ways tablets can be leveraged. A shift toward an enterprise focus might see Apple sharing everything from "best practices" to internal software that facilitates its own use of tablets in the enterprise.
Many CIOs have shared their complaints about Apple's fledgling enterprise sales division for having aloof attitudes and processes that are incapable of handling things, including trouble tickets and billing. While Apple certainly has some growing up to do in this area, one major asset it has over competitors is its ubiquitous retail stores.
Enterprise IT has long been stuck in the business of procuring, distributing, repairing, and tracking hardware, and one of the hurdles to large-scale tablet adoption is that it presents one more device for IT to manage. Apple could offer a distinct benefit to customers by leveraging its stores as a distribution and repair facility, where iPads could easily be issued and repaired.
Provisioning enterprise software could be accomplished via the existing App Store, and enterprise IT could perform a large-scale device rollout with little more than issuing a PO to the Cupertino company. Similarly, a user with a broken or defective device could drop into the local Apple store on their way home from the office or while traveling and get troubleshooting and repair assistance, all without using a minute of internal IT's time. That would be an enterprise benefit that few competitors could match.
The iPad as a gateway drug
Apple has a successful track record of using a lower-cost device as a "gateway drug" into more expensive products and services. The original iPod rejuvenated Macintosh sales and created a completely new revenue stream in digital music and video downloads from the iTunes store. There are obvious tie-ins at the enterprise level.
With widespread iPad adoption, Apple could offer anything from enterprise software to branded "iPad in the Enterprise" conferences and users groups. While a large-scale shift to Macintosh desktops is unlikely, that doesn't seem to be Apple's growth focus. Apple's iCloud offering presents an obvious enterprise spin-off, with tablet-related consulting and enterprise software certainly not out of the question.
Apple seems to be running on an unstoppable string of hits, but an entrée into the complex enterprise market will not necessarily be a foregone success. On the strength of its product alone, Apple has captured the attention of the enterprise with minimal effort. If it can bridge its current weaknesses in this market, there seems to be an exceptional opportunity. For CIOs and enterprise consumers, this move will hopefully elevate the iPad from a high-potential, experimental device to a fully integrated and supported enterprise tool. If nothing else, this move confirms more exciting times for tablets in the enterprise ahead.
Patrick Gray works for a global Fortune 500 consulting and IT services company and is the author of Breakthrough IT: Supercharging Organizational Value through Technology as well as the companion e-book The Breakthrough CIO's Companion. He has spent over a decade providing strategy consulting services to Fortune 500 and 1000 companies. Patrick can be reached at email@example.com, and you can follow his blog at www.itbswatch.com. All opinions are his and may not represent those of his employer.