Apple Partners Call IBM-Apple Deal A Mixed Bag

Watch out Apple partners. IBM may soon become one of Apple's biggest and most influential enterprise resellers of not only iPhones and iPads, but also Mac desktops, laptops and servers.

According to Phillip Buckellew, vice president enterprise mobile, IBM Software Group, the Apple-IBM deal announced last week also empowers IBM's direct sales force to resell all Apple hardware, which had previously been off-limits to IBM direct sales reps.

Apple partners are mostly taking the news on the chin, saying the Apple-IBM partnership has pros and cons, and they are eager to get more details on how the partner community will be impacted. Those details are still being worked out, IBM's Buckellew said.

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For the most part, Apple resellers say this is good news, upping Apple credibility in the enterprise and expanding commercial opportunities for them as well. On the flip side, the Apple-IBM partnership will create more competition for Apple partners, giving 100,000 IBM consultants and software developers access to an exclusive list of 100 IBM-developed iOS apps as part of the deal.

"I think it is a situation where IBM becomes another competitor. But to be honest, the pricing structure for Apple hardware leaves us insignificant revenue in the first place," said Andy Nunez, director of services at Liberty Tech, an Apple solutions provider based in Griffin, Ga.

Michael Oh, CEO of Tech Superpowers, an Apple partner based in Boston, said, "This gives Apple legitimacy in the enterprise. If they are providing enterprise-class solutions with IBM at the top level, then SMBs will view Apple as 'good enough to play with the big boys, so good enough for us.' That's the greatest effect that I think smaller channel partners will see."

But Nunez and other Apple partners say they are concerned that IBM gets a leg up on partners when it comes to supply-chain issues, and incremental-related Apple services and infrastructure sales.

"I think that could be a risk and a problem," Nunez said. "The iPad 4 comes to mind. It took us a little longer to get it, and the larger partners got a bigger percentage."

Other partners are miffed should IBM create an exclusive hands-off list of apps services.

"If IBM is creating joint account scenarios where existing Apple or IBM partners are forced to take a back seat to IBM so it can develop apps, cloud and big data components, that's not OK by me," said a partner, speaking on condition of anonymity to protect his relationship with the vendor.

IBM has long sold Hewlett-Packard, Dell, or whatever brands customers wanted, except for Apple. Now for the first time, IBM expands its client PC portfolio to include all Apple hardware. But the wide-ranging iOS-focused deal also gives IBM packaged iOS services such as sales, deployment and device activation, and will deliver AppleCare for Enterprise, an on-site service for enterprise customers, as well.

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Apple has been steadily losing PC and tablet market share in the enterprise for almost two years. According to IDC, Apple's U.S. PC market share in the enterprise is 8 percent for the first quarter of 2014, down from 9.4 percent in 2013. Apple's iPad share in U.S. enterprises is falling even faster -- from 86 percent in 2012 to 76 percent in the first quarter of 2014, according to IDC.

"Android continues to be Apple's biggest threat in the enterprise with market share gains every consecutive quarter for two years," said Rajani Singh, IDC senior research analyst. "It's too early to comment on whether or not we will see an appreciable boost. Traditionally, THE Apple market has been driven by consumer, not commercial."

Stephen Monteros, vice president of business development and strategic initiatives at SIGMAnet, an Ontario, Calif.-based Apple solution provider, said he sees the IBM deal as driving new Apple business for him.

"When a market expands, it generally creates other opportunities for us," Monteros said. "When Apple has a better offering, it helps us evolve. I see this expanding the brand in new areas, which is good for us."

PUBLISHED JULY 21, 2014