& cplSiteName &

Have IBM & Apple Partnered Their Way to Cloud Leadership?

Mitch Wagner
7/18/2014
50%
50%

IBM and Apple were the first big success stories for cloud computing, and they've had to stand by and watch other companies enjoy the fruits of the industry they invented.

Apple launched the iTunes Store in 2003, turning the music industry upside-down (it still hasn't recovered) and kicking off the modern cloud era. But sadly for Apple, the iTunes store was its only big cloud success: iCloud is a niche product, serving Apple apps only, while MobileMe and Ping were industry jokes. iTunes was the ultimate one-hit wonder -- like this:

As for IBM's history with cloud computing: What do you think Timeshare was?

Timesharing and mainframes were the first generation of cloud computing, and the foundation of IBM's monopoly over the computer industry through much of the 20th Century. IBM has has been less successful with the cloud in this century, although that's changed recently. The company is shifting its focus to the cloud, and its business is growing, despite an overall sales slump for IBM that's stretched nine dismal quarters.

Cloud Computing, 1969 style
Source: Wikipedia
Source: Wikipedia

Both IBM and Apple have had to watch gloomily as Google, Microsoft, and especially Amazon have pushed the two companies to the sidelines of the industry they created.

That could change with this week's groundbreaking IBM and Apple partnership. Apple will provide iPhones, iPads, and support for those devices, while IBM provides enterprise expertise -- 100 apps for vertical industries, as well as security and analytics and cloud support. (See Analytics, Security Key to Apple, IBM Tie-Up.)

Even separately, IBM and Apple have been getting their cloud acts together recently. IBM's cloud offerings as a service are now at an annual run rate of $2.8 billion, compared with $2.3 billion as of the first quarter. That's still just a fraction of IBM's $100 billion revenue last year, but it's brisk growth. Cloud sales grew 50% for the first half of 2014 year-over-year.

And Apple's new cloud offerings, announced last month, look very promising. The company is getting into the Internet of Things with interfaces for home automation and healthcare, broadening iCloud to be a Dropbox competitor for document storage, and launching CloudKit to allow developers to build applications using iCloud. (See Apple Launches Biggest Changes Since iPhone and Apple Launches Evil Plan to Steal Carriers' Customers.)

Taken together, IBM and Apple can offer a cloud one-two punch: IBM has the enterprise business and Apple the consumer side.

No, not that kind of punch.
Source: Wikipedia
Source: Wikipedia

Moreover, IBM offers the cloud infrastructure and Apple provides the client devices. In order to truly lead the cloud, companies need to control the user experience from end to end: That's why Google acquired and relaunched Android and, more recently, why Amazon introduced its own phone. You can't lead the cloud if someone else controls the point of contact with the user.

Apple and IBM are a powerful combination. In a few years, when we talk about cloud leaders, we may find ourselves listing Amazon, Google, Microsoft... and the IBM and Apple partnership. That depends on how well they execute. But both Apple and IBM are great at executing; these are two focused companies that do what they say they will do.

What does this mean to carriers? The same thing the cloud always means: It's a great opportunity for carriers to provide connectivity between data centers, and from the data center to the user. But it's also a threat: As carriers themselves look to get into cloud computing, they find powerful incumbents already there.

By the way, this article was inspired by a blog post by veteran industry analyst (and Light Reading friend) Tom Nolle: The Battle in, and for the Cloud. Tom is definitely on a roll this week. (See How NFV Gets a Foot in the Door for SDN.)

— Mitch Wagner, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profileFollow me on Facebook, West Coast Bureau Chief, Light Reading. Got a tip about SDN or NFV? Send it to wagner@lightreading.com.

(14)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Page 1 / 2   >   >>
bosco_pcs
50%
50%
bosco_pcs,
User Rank: Light Sabre
8/6/2014 | 5:43:15 AM
Re: Play well with others?
@nasimon,

I suppose time will tell but instead of lifting just a couple of my statements, I hope you will consider everything I have said. After all, we all agree the two companies have very different cultures and IBM has not been doing so well.

But my case is precisely because of these - and not in spite of - factors that IBM will try to make it work. Mind you, it is no longer the one calling the shot like the last two times when the two companies tried to partner together.

Additionally, while Apple may have very shape minds, in terms of technologies, design and marketing, have you heard of its consulting in the corporate environment?

So you are right that they have very different markets. But again it is precisely of that fact that turf war might be minimized!

Just a thought but I think it won't take long to find out. Perhaps in less than a year time
nasimson
50%
50%
nasimson,
User Rank: Light Sabre
8/5/2014 | 11:31:23 PM
Re: Play well with others?
> I think the real speculation is if this is the first step of integration
> relationship of the two companies.

Really? I dont think its going to happen. The two companies operate with very different cultures in very different markets. Partnershpip on cloud is OK - although I dont have very high hopes.

But integration on a broader level would be a good example of a situation where 1+1=less than two.
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
7/22/2014 | 8:37:15 PM
Re: Big change for Apple
Some corporate users are reportedly asking for their BlackBerrys back.
sam masud
50%
50%
sam masud,
User Rank: Light Sabre
7/21/2014 | 3:55:12 PM
Cui bono?
With nine straight quarters of declining sales, it's likely IBM needs such a partnership more than Apple. For the rest of the story on Big Blue, here's a very interesting article that was published last week:

http://davidstockmanscontracorner.com/1-5-million-per-scalp-at-microsoft-another-folly-of-monetary-central-planning/

PS: loved the music video...might consider launching a site called LightTube :-)
thebulk
50%
50%
thebulk,
User Rank: Light Sabre
7/21/2014 | 3:49:23 PM
Re: Play well with others?
Valid points indeed, Lets wait and see, If it works out I will be excited, if they break up early on, I wont be surprised either. 
bosco_pcs
50%
50%
bosco_pcs,
User Rank: Light Sabre
7/21/2014 | 3:43:35 PM
Re: Play well with others?
Perhaps it is a matter of opinion. However, I'd like to add another salient point. Mr Tim Cook was a IBMer. He is likely to be aware of IBM's culture. Incidentally, I knew he came from Campaq but I was quite surprised to learn of his IBM background because the late Jobs wasn't really nice to Ms Ellen Hancock upon his return from exile. Another plus is he is also an operational guy deep down.

I guess we need to define "mess it up." I mean, except for the 100 or so Apps and the servicing provided by IBM, there is little downside risk. Huge cost to Apple? No. Watson worse than Siri? I don't think so. Each ruins the other's reputation? Unlikely.
thebulk
50%
50%
thebulk,
User Rank: Light Sabre
7/21/2014 | 3:28:01 PM
Re: Play well with others?
@bosco_pcs, 

I agree it will be an amazing partnership, as well as with the strides both CEOs have made, but I do not think it will take a lot to mess it up, until its well established I think it will be touch and go. 
bosco_pcs
50%
50%
bosco_pcs,
User Rank: Light Sabre
7/21/2014 | 1:20:06 PM
Re: Play well with others?
They could certainly mess up because of turf war but the incentive is huge for both. Imagine using Apple as the gateway to Watson!

More important, it is not your father's Apple or IBM. CEO Cook has done a lot of silo busting since he took the reign at Apple. And CEO Rometty's fate has a lot to ride on this partnership. I suspect the progress of this partnership will be a topic at her senior staff meeting on a daily basis.

Technically, it is absolutely complementary and even synergistic. It will take a lot to mess it up!

I think the real speculation is if this is the first step of integration relationship of the two companies. Mind you, IBM doesn't really sell PC anymore. What's stopping it from paddling iMac and MacBook beyond this MobilityFirst partnership? And if IBM succeeds in unloading the server biz to Lenovo, AIX may be the way of the past too. And what about the rumor about fusing iOS and OSX? So Apple can save a ton from scaling up sales at the enterprise level while IBM can collect a nice cut without spending a ton of R&D down the road.

With that in mind, I am sure both CEOs will have the directives to their respective staffs to pull out all the stops or risk a call to the carpet

 

 
DHagar
50%
50%
DHagar,
User Rank: Light Sabre
7/21/2014 | 12:41:00 PM
Re: Big change for Apple
@danielcawrey, agreed.  It has created a perfect alignment of products and capabilities.  I believe this can overcome past limits, such as thebulk points out, where Apple wants to have the game to themselves.  These companies get credit for recognizing the shift and taking full advantage of what they can create together.

 
danielcawrey
50%
50%
danielcawrey,
User Rank: Light Sabre
7/20/2014 | 3:36:54 PM
Re: Big change for Apple
Over the past few years, I have seen a huge shift away from Blackberries to iOS in the enterprise. And Apple has been trying to get its enterprise act together by giving larger companies some direct access to be able to build big business solutions. 

It seems that the IBM deal was inevitable. Both companies need each other to compete against Google and Amazon. Those three are winning in the enterprise business -who would have thought that five years ago?
Page 1 / 2   >   >>
More Blogs from Column
Sometimes your day job has to come before championing the women in tech cause, but that can be equally as beneficial, inspirational and productive.
As a month-long, multi-city, 12-hour/day, multi-time zone, multi-device extravaganza, the NCAA basketball tournament poses unique streaming video challenges.
As the 3GPP agrees on plan to accelerate 5G NR -- the global 5G standard -- for 2019 deployments, a Qualcomm VP walks us through the reasons why.
There is no substitute for testing under the most realistic conditions if you want to minimize the chances of network downtime.
Stephen Cameron and Chris Pinnock examine the implications of the impending EU General Data Protection Regulation (GDPR) that is due to come into force in May 2018 and which will affect every organization that uses the data of European citizens.
From The Founder
Cisco's Conrad Clemson, recently promoted to head up the company's Service Provider Apps & Platforms developments, talks to Light Reading's Founder and CEO Steve Saunders about how he's bringing cloud video, mobile and virtualization together to empower network operators.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Custom TV
CommScope – Meeting the Demands of Tomorrow's Networks

3|24|17   |     |   (0) comments


Phil Sorksy, Vice President International at CommScope, discusses addressing the challenges faced by service providers today, and as future trends emerge.
LRTV Huawei Video Resource Center
AMS-IX & Huawei's OSN 902

3|24|17   |     |   (0) comments


Huawei shows how its OSN 902 platform helps the Amsterdam Internet exchange to connect the world using multiplexing.
LRTV Huawei Video Resource Center
Huawei's Smart Energy Innovation Center

3|24|17   |     |   (0) comments


In Nuremberg, Huawei showcases its latest capabilities in the digitalization of Internet resources, network infrastructure and intelligence at its Smart Energy Innovation Center.
Valley Wonk
OFC & Hyperscale: A Good Mix?

3|24|17   |   01:50   |   (0) comments


Cloud and telecom players want different types of equipment for their networks, as the chatter at OFC reveals.
LRTV Custom TV
Etisalat on NFV Journey

3|24|17   |   10:37   |   (0) comments


Etisalat is a service provider that prides itself on bringing innovative technologies to the markets it serves. It was one of the first operators to implement 3G and leads the pack in fiber penetration. Now, Esmaeel Al Hammadi, Etisalat's SVP of Network Development, explains the operator's journey to virtualization, beginning with the network core, as well as the ...
LRTV Huawei Video Resource Center
Huawei at CeBIT 2017: Day 3

3|22|17   |     |   (0) comments


Light Reading reports from CeBIT 2017 in Germany, where Huawei is exhibiting on the application of technologies and key business verticals such as transportation, smart city, manufacturing, media and finance.
LRTV Documentaries
No Regrets: Cox's Finkelstein on Fiber & More

3|22|17   |     |   (0) comments


At the Cable Next-Gen Technologies & Strategies event in Denver, Cox's Jeff Finkelstein examines the cable capex conundrum.
LRTV Documentaries
Cable Next-Gen: The 'Mile High' View From Denver

3|22|17   |   11:56   |   (0) comments


Alan Breznick kicks off the Cable Next-Gen Technologies & Strategies event in Denver, casting his thousand-yard stare over cable's current competitive landscape.
LRTV Huawei Video Resource Center
Huawei at CeBIT 2017: Day 2

3|21|17   |   2:27   |   (0) comments


Light Reading reports from CeBIT 2017 in Germany, where Huawei is exhibiting digital transformation solutions around IoT, smart data centers, OpenCloud ecosystem and its newly announced storage-as-a-service solution.
LRTV Custom TV
Driving Better Mobile Customer Experience While Transforming the Mobile Network

3|21|17   |   7:47   |   (0) comments


The Citrix NetScaler mobile gateway is an intelligent traffic management solution which can markedly improve the customer experience provided by mobile operators, even when traffic is encrypted. Critical network services can be consolidated and virtualized using NetScaler. Because of the unique architecture, NetScaler can be deployed on any hypervisor, on a ...
LRTV Custom TV
Mastercard: What's Next for Mobile Payments?

3|21|17   |   7:49   |   (0) comments


2017 marks the fifth consecutive year for Mastercard at Mobile World Congress and it was a great time to reflect on the amazing advances the payments industry has made as well as discuss "What's Next' in the digital commerce future. We spoke to James Anderson, executive vice president of digital payments at MasterCard, about digital wallets to tokenization to ...
LRTV Custom TV
Mastercard: 2 Billion Adults 'Trapped' in Cash Economy

3|21|17   |   03:51   |   (1) comment


Despite advances made in the last several years, two billion adults around the world are trapped in a cash economy and lack what we take for granted -- a safe way to receive, save and use money. Shamina Singh, executive vice president of sustainability and president of the Mastercard Center for Inclusive Growth, chats about how Mastercard is developing new ways to ...
Upcoming Live Events
May 15-17, 2017, Austin Convention Center, Austin, TX
May 15, 2017, Austin Convention Center - Austin, TX
June 6, 2017, The Joule Hotel, Dallas, TX
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
High-Band 5G: Let's Address the Range Question, Shall We?
Dan Jones, Mobile Editor, 3/21/2017
Eurobites: A1, Nokia Turn It Up to 11
Paul Rainford, Assistant Editor, Europe, 3/22/2017
FTTH No Slam Dunk for Cable
Carol Wilson, Editor-at-large, 3/23/2017
Top Priorities for B/OSS Transformation
James Crawshaw, Senior Analyst – OSS/BSS Transformation, Heavy Reading, 3/20/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
TEOCO Founder and CEO Atul Jain talks to Light Reading Founder and CEO Steve Saunders about the challenges around cost control and service monetization in the mobile and IoT sectors.
At MWC 2017, Qualcomm's CTO Matt Grob talks to Light Reading's CEO and Founder Steve Saunders about the progress being made in the development of the technologies and standards that will underpin 5G.
Animals with Phones
Neither Do We Click Here
Is that a prerequisite?
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.