Apple + IBM: Sugar and spice or oil and vinegar?

Yesterday's formal announcement of a partnership between two computing giants, Apple and IBM, came as a big surprise to most industry observers. We hadn't seen any leaks on the subject, and it wasn't something I can recall being the topic of any predictions articles or other "this makes sense" style of article. On the surface, however, there are numerous reasons why it definitely does make sense.

Apple makes the best mobile hardware and most user-friendly operating system, iOS, that runs on its iPhones and iPad. But aside from tons of enterprise employees using Apple devices for work purposes, Apple has been largely disconnected from the enterprise market. Other companies, like BlackBerry, Mobile Iron or Good, have build device management platforms, and application developers have created business apps to run on iOS.

IBM, on the other hand, is a software and services giant that used to have huge exposure to the Wintel ecosystem, but exited the PC market through by divesting the business unit to China's Lenovo.

Apple and IBM are enormous companies coming together to create what they feel is a much-needed set of enterprise solutions combining IBM's software and services expertise with Apple's devices. It's an exclusive deal, so it looks like both companies are committed, together, to clobbering everyone else in the space including Google and Microsoft.

If this works, Apple and IBM are going to convince a lot of companies to exclusively use Apple iOS devices when it comes to their mobile worker requirements. And if that happens, it wouldn't surprise me to see Apple's Macintosh computers start to work their way deeper into the enterprise. Why not? The enterprise apps can all be ported to MacOS, and those who want to keep using Microsoft apps (like Office) can do so via the cloud right from their browser. The mobile OS may start to drive desktop / laptop purchase decisions in time.

But is there a cultural fit between Big Blue and Team Cupertino? I doubt it somehow … but this isn't a merger so I'm not sure it really matters. IBM's sales force just needs to do what it already knows how to do .. that is to sell software and tie hardware to it. The engineers just need to code good software, but this time using Apple's tools to do it. And the Apple folks? They don't really need to do anything different. They will setup an AppleCare unit for enterprise, but all of the on-site support will be handled by IBM. It looks like both companies get to, in theory, play to their strengths, benefit from their partner's strengths, and largely side step any culture clash risks.

I'd say it seems to be more of a sugar and spice deal rather than oil and vinegar. But that's just my guess. We aren't going to see results from this for the better part of the next 12 months. And in that time it will be really interesting to see how the competition responds. Will Microsoft or Google buy BlackBerry? If Apple attempts to use the IBM exclusivity deal to lock up the enterprise market with iOS hardware, will one of them put together a highly credible long term combination of assets that goes after the multi-platform world?

It wouldn't surprise me if this news is enough to send Apple stock north of $100, setting a new all-time high.

Disclosure: I own Apple shares, lots of Apple products, and occasionally eat Apples.

Chris Umiastowski

Former sell side analyst, out-of-box thinker, consultant, entrepreneur. Interests: Wife & kids, tech, NLP, fitness, travel, investing, 4HWW.