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Apple Dominating With iPad In Enterprise

Apple's iPad is confirming the consumerization of IT by moving into the office in a major way. This is a troubling development for Hewlett Packard and other competitors positioning their own tablets as more suitable for use in the enterprise.

In the competition's view, enterprises are looking for iPad alternatives with better security and management. However, figures from Apple's recent Q3 earnings tell a different story: 86 percent of Fortune 500 firms and 47 percent of Global 500 companies are deploying or testing iPad, Apple CFO Peter Oppenheimer said in last week's call.

A recent study by Dimensional Research illustrates the presence of iPad in enterprises. Released in May, the study showed that 78 percent of respondents plan to have tablets officially deployed in their businesses by the end of 2013, and 83 percent of those businesses plan to deploy Apple iPads.

Apple was the only serious player in the tablet space at this time last year, but since then a variety of competitors have entered the market including Samsung, Research in Motion, Cisco and HP. Many of them have sought to avoid direct competition with Apple by focusing on enterprise.

Cisco thinks its Cius will be an enterprise game-changer because it consolidates all of a business user's most important unified communications (UC) tools, and offers them in a mobile device with built-in enterprise security. Research in Motion boasts security certification from the U.S. government as a feature of its enterprise-focused BlackBerry PlayBook tablet.

While much of the competition seeks to differentiate based on a particular feature or service, HP and Apple are the only companies that currently offer a mobile device portfolio that encompasses hardware and software.

Partners for both companies consider this end-to-end ownership an advantage as they fight for market share in the crowded tablet PC space, but HP made a particularly big bet on the integration by spending 1.2 billion to acquire Palm's webOS platform in July 2010.

HP has sent mixed marketing messages around the TouchPad. In May, Eric Cador, senior vice president of HP's Personal Systems Group -- Europe, Middle East and Africa vowed to overtake the iPad for the top spot in the tablet market.

More recently, HP has been emphasizing an enterprise focus for the TouchPad. Richard Kerris, HP’s vice president of worldwide developer relations, in June told the Apple enthusiast blog The Loop that the TouchPad will not go head-to-head with the iPad.

’We think there’s a better opportunity for us to go after the enterprise space and those consumers that use PCs,’ Kerris told The Loop. ’This market is in its infancy and there is plenty of room for both of us to grow.’

HP partners feel that the company is well positioned to take on Apple in the enterprise tablet space because of the ease of integration with the existing HP product ecosystem and the reach of the channel. HP's plan to get WebOS running on Windows PCs, home appliances, printers and a range of other devices foretells future success for the TouchPad, according to John Convery, executive vice president of vendor relations for Redmond, Wash.-based Denali Advanced Integration.

"The fact that HP is delivering that operating system on all their products from their PC line through their printer line is huge," Convery said. "We take very seriously the integration piece. It is not about the SKU or the product, it is how the products integrate."

Gurpreet Kaur, a tablet analyst at Gap Intelligence thinks integration between a tablet and existing systems is particularly important in the enterprise space, much more so than for consumers.

"A new tablet that integrates or gels with the existing infrastructure is more likely to be successful in enterprise. In that way, HP and RIM are at an advantage," Kaur said.

HP partners also point to the strength of HP's partner programs as an advantage over Apple. Rick Chernick, CEO of Camera Corner Connecting Point, a Green Bay, Wis.-based HP partner thinks the channel is essential to facilitating integration and explaining the benefits of the tablet to enterprise customers.

"I think the channel is hugely important. Our influence factor is huge because people come to us to help them answers those questions about integration," he said. "There is still a lot of uncertainty in this space. We go to them and say 'look at what [the TouchPad] will do for your business' and teach them how it will make them more effective."

Next: iPad in the Enterprise Faces Down Challenges

Unlike HP, Apple doesn't have a robust channel, but Apple partners say this isn't a problem because consumer sales are driving the iPad into business, and Apple's ability to push its product to those consumers is strong.

"The distribution for iPad is extremely wide. It is much larger than the distribution for Mac. There are vendors who don't sell Mac who do sell iPad. They also have these retail stores that are a huge success, so I don't think the channel is a problem for Apple," said Kyle Bennet, Director of Technical Services at Simply Consulting, a Vancouver-based partner.

Michael Oh, president of Boston-based Apple reseller Tech Superpowers, thinks the iPad's success in enterprise to date can be attributed to the type of consumer that buys the tablet for personal use.

"Apple has realized that the people who walk into a store and walk out with an iPad are people who are in business. They are in Fortune 500. They are in SMB," said Oh. "They are really driving the demand, and maybe it's blind luck, but I think it comes down to Apple selling tablets to people who make business decisions."

The term, "consumerization of IT," has been used for years to describe the use of personal devices for business functions, but Oh thinks it has only started to make sense for companies in the last two to three years. According to a Trend Micro study published in July, almost two-thirds of organizations allow employees to use personal mobile smartphones and tablets for business functions.

According to Oh, this consumerization is the force behind the movement of tablets into enterprise. "The people buying these devices are not going to be IT managers," he said.

Consumers are driving tablets into enterprises, but IT managers do influence enterprise-wide decisions regarding technology and Apple faces challenges in courting them. Traditional PC deployments involve imaging machines with the enterprise's licensed software, a process that is not supported by the iPad. Business licensing for software purchased through the Apple App Store recently became available in the U.S., but is not yet available elsewhere. Competitors are touting enterprise-friendly features not found on iPad, from multiple input options, like a stylus combined with touch technology, to enhanced support services for enterprise customers.

In spite of the challenges, Apple maintains a healthy lead in the enterprise tablet race. Businesses are embracing the iPad in ways even Apple never imagined. According to Oppenheimer in last week's earnings call, Apple "continue[s] to be delighted by the diverse and sometimes unexpected use cases we see around iPad."

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