By Robert McMillan
International Business Machines Corp. and Apple Inc. used to be
bitter rivals, but lately they have been spending quality time
together.
More than 100 IBM employees occupy Apple's Cupertino, Calif.,
campus helping build iPhone and iPad apps for IBM customers such as
Citigroup Inc., Sprint Corp. and Japan Post Holdings Co.
Things are looking different inside IBM, too. Once a company of
blue suits, Wintel PCs and BlackBerrys, Big Blue is on track to
become the world's largest corporate user of MacBooks. On
Wednesday, the company will apply lessons it has learned to
introduce a new service intended to help other companies adopt
Macs.
Employing 380,000 workers, IBM has a unique challenge in
competing with nimble Silicon Valley startups in the market for
information-technology services, which research firm Gartner Inc.
estimates at $981 billion globally. According to Chief Information
Officer Jeff Smith, the question facing the company is: "Can we
have the innovation of the best, smallest companies and the scale
of IBM, and figure out a way to turn culture into a competitive
advantage?"
The rapprochement with Apple may be part of the answer, one
facet of a program intended to refashion the 104-year-old company
for changing times. Revenue is down in all of IBM's major product
lines--in fact, revenue overall has declined for the past 13
quarters--and the company is scrambling to maintain its relevance
in the era of smartphones and cloud computing. To that end, it has
boosted its investment in key areas such as data analytics,
security, mobile computing and the cloud. It also has joined with
companies that have a bit of tech sizzle including Apple, Box Inc.,
Facebook Inc. and Twitter Inc.
"We're trying to pick these companies that have an aspiration to
do something quite special, but leverage what we're strong at," Mr.
Smith said.
It is too early to say whether IBM is taking on the sheen of
such associations. But it is furnishing IBM staff, for the first
time, with Silicon Valley's standard-issue computing tools.
"When you look at the Apple-IBM partnership, I think that's
going to be bigger and even more important over time," said Daniel
Ives, an analyst with FBR Capital Markets. "But what's really
happening now is there are these major shifts going on across it
landscape, and these traditional stalwarts like IBM and Oracle,
they have to adjust."
Three years ago, IBM banned Apple's Siri for internal use over
worries about data security. Apparently, there were Apple fans in
the company; when IBM first offered Macs to its workers in May,
185,000 employees read the internal announcement, Mr. Smith said.
"It really hit a nerve with IBMers," he added.
IBM announced its app collaboration with Apple in July 2014.
Within six months, it began shipping 43,000 iPads to its sales
force. It now supports more than 110,000 Apple devices including
these iPads, MacBooks and iPhones. By year's end, Mr. Smith expects
to manage 50,000 MacBooks alone, a number he has told Apple
eventually may grow to 200,000.
The new services unveiled Wednesday, designed to help corporate
clients deploy Macs by the thousands, are a direct outgrowth of
that experience. Much of what IBM knows about getting workers up
and running on Macs, it learned from Apple. IBM sent Fletcher
Previn, its Workplace as a Service vice president, to Apple
headquarters last fall for a weeklong immersion in Apple's approach
to delivering Macs to its own employees. Mr. Previn said he was
amazed by the smooth experience Apple had built for its own
people.
Apple declined to comment on its relationship with IBM. An Apple
spokesman pointed out that "the Mac has grown faster than the PC
industry for more than a decade. We're always excited to hear about
people switching to the Mac, and enterprise customers like IBM are
certainly no exception."
"It was certainly eye-opening to see how they are able to manage
large numbers of people with far fewer resources than you would see
in a traditional PC environment," said Mr. Previn, who sounded
slightly star-struck as he talked of his visits to Apple
headquarters. Thirty years ago, his mother, actress Mia Farrow,
gave him a birthday cake painstakingly modeled after an Apple II
computer, and he remains a fanboy to this day.
"We each have our strengths," he said. "Apple is great at the
experience and making some of the best devices in the world, but we
know what a lot of large enterprises need."
Write to Robert McMillan at Robert.Mcmillan@wsj.com
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