& 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   >   >>
Educational Resources
sponsor supplied content
Educational Resources Archive
More Blogs from Column
Edge computing is a compelling option for telcos looking to balance tightening finances with increasing demands for bandwidth and processing speed. 
The conclusions of a new survey, commissioned by OpenCloud and conducted by Heavy Reading, suggests that the move towards converged service layers is now well underway.
WiFi is offering a challenge to the network-centric cellular status quo and that's something that mobile network operator CEOs recognize, believes Devicescape CEO Dave Fraser.
NFV can bring operational headaches as well as operational gains, argues Andy Huckridge.
5G is about so much more than just very high bandwidth and low latency – and SDN is going to play a key role in enabling 5G full potential, argues ONF Executive Director Dan Pitt.
From The Founder
The independent evaluation of Nokia's key virtual network functions (VNFs) was a defining moment for the Finnish giant.
Flash Poll
Live Streaming Video
Prepping for the Future: Upskill U Explained
During this short kick-off video, Doug Webster, Vice President of Service Provider Marketing, Cisco, and Light Reading’s CEO & Founder Steve Saunders give an overview of Upskill U.
LRTV Documentaries
Light Reading Hall of Fame 2016

5|23|16   |   05:43   |   (1) comment


Find out who has been welcomed into Light Reading's Hall of Fame this year.
LRTV Custom TV
ZTE TM Forum Highlights

5|23|16   |     |   (0) comments


ZTE showcased its new ICT solutions at TM Forum in Nice.
LRTV Interviews
Gamma's MD on the Emergence of UC2

5|20|16   |     |   (0) comments


Gamma Communications Managing Director David Macfarlane believes the unified communications (UC) market has reached a tipping point.
LRTV Custom TV
The Ultimate 5-Minute Guide to Digital Customer Engagement

5|20|16   |     |   (0) comments


In this short video, you will hear all about how Digital Customer Engagement is the key to meeting customer expectations, keeping them happy, and maximizing revenue. VP Product & Marketing at Pontis, Ofer Razon, breaks down for us the five essential capabilities for successful Digital Customer Engagement. Don’t miss!
LRTV Custom TV
NFV in 2016: Part 1 – NFV Use Cases Get Real

5|19|16   |   05:57   |   (0) comments


Consensus is building around the key use cases for NFV, including managed IP services at the network edge and on customer premises, which can generate new revenues from enterprises/SMBs and consumers; Evolved Packet Core to support LTE migration; and adjacent technologies, such as TAS and IMS, to support VoLTE and next-generation charging and policy control ...
LRTV Custom TV
Nokia's Steve Vogelsang on NFV – Part 3

5|19|16   |     |   (0) comments


Steve Vogelsang discusses the challenges of operational transformation and how Nokia helps its customers. Join Steve at the Big Communications Event in Austin the morning of May 24, on his keynote and optical networking panel.
LRTV Interviews
Level 3: Why UC Is In Demand

5|17|16   |   04:12   |   (1) comment


Andrew Edison, Level 3's senior VP of sales, EMEA region, talks about the drivers of growth in the unified communications services market.
LRTV Custom TV
ARM's OPNFV Action

5|17|16   |     |   (0) comments


At the ARM booth at MWC 2016, Joe Kidder and Bob Monkman speak to Light Reading about OPNFV and their upcoming action.
LRTV Custom TV
Nokia's Steve Vogelsang on NFV – Part 2

5|16|16   |     |   (0) comments


Steve Vogelsang gives advice to service providers on how to move to NFV. Join Steve at the Big Communications Event in Austin the morning of May 24, on his keynote and optical networking panel.
LRTV Interviews
Interoute CTO on NFV's Maturity

5|13|16   |   06:46   |   (1) comment


Matt Finnie, CTO at international operator Interoute, explains how NFV has made life easier in terms of logistics and how Interoute can now enable a 'software-defined moment' for its customers.
LRTV Huawei Video Resource Center
UBBS 2016 Highlights

5|12|16   |     |   (0) comments


Highlights of Huawei's UBBS event in Hong Kong.
LRTV Huawei Video Resource Center
European 2020 Digital Agenda

5|12|16   |     |   (0) comments


Anacom's Fatima Barros discusses the plan to bring ultrafast broadband to Portugal by 2020.
Upcoming Live Events
May 24-25, 2016, Austin Convention Center, Austin, TX
September 13-14, 2016, The Curtis Hotel, Denver, CO
December 6-8, 2016,
June 16-18, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
A new survey conducted by Heavy Reading and TM Forum shows that CSPs around the world see the move to digital operations as a necessary part of their overall virtualization strategies.
Hot Topics
WiCipedia: Short Skirts & Back-Up Plans
Eryn Leavens, Special Features & Copy Editor, 5/20/2016
Nokia Plays It Smart With Major Mobile Devices Brand Deal
Iain Morris, News Editor, 5/18/2016
Ingenu Revs Up IoT Rhetoric
Iain Morris, News Editor, 5/18/2016
Intel Wants to Be a 5G Player
Dan Jones, Mobile Editor, 5/17/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
In this latest installment of the CEO Chat series, Craig Labovitz, co-founder and CEO of Deepfield, sits down with Light Reading's Steve Saunders in Light Reading's New York City office to discuss how Deepfield fits in with the big data trend and more.
Grant van Rooyen, president and CEO of Cologix, sits down with Steve Saunders, founder and CEO of Light Reading, in the vendor's New Jersey facility to offer an inside look at the company's success story and discuss the importance of security in the telecom industry.
Animals with Phones
The Takeover Begins Click Here
It all started when Mittens taught himself how to use the Internet.
Live Digital Audio

Our world has evolved through innovation from the Industrial Revolution of the 1740s to the information age, and it is now entering the Fourth Industrial Revolution, driven by technology. Technology is driving a paradigm shift in the way digital solutions deliver a connected world, changing the way we live, communicate and provide solutions. It can have a powerful impact on how we tackle some of the world’s most pressing problems. In this radio show, Caroline Dowling, President of Communications Infrastructure & Enterprise Computing at Flex, will join Women in Comms Director Sarah Thomas to discuss the impact technology has on society and how it can be a game-changer across the globe; improving lives and creating a smarter world. Dowling, a Cork, Ireland, native and graduate of Harvard Business School's Advanced Management Program, will also discuss her experience managing an international team focused on innovation in an age of high-speed change.