Wednesday, April 16, 2008

Can iPhone cater to Enterprise Market ?

Since Apple's iPhone launched last June, one of its biggest weaknesses has been its lousy/non-existent support for corporate email. That should change soon: Apple is planning to lay out the iPhone "software roadmap," including "exciting new enterprise features."

Apple might do to make the iPhone a solid business-email gadget by improving its ability to work with Microsoft's (MSFT) Exchange email server and IBM's (IBM) Lotus Notes, the top enterprise email platforms.

How will Apple make it happen? Most likely, the company has developed its own hooks into those platforms. Or Apple could have licensed email software from a third party, like Microsoft's ActiveSync technology -- less likely. Possible but least likely: licensing Research In Motion's (RIMM) BlackBerry Connect software.

I don't think they are going to replicate the robustness of BlackBerry push e-mail, but nonetheless, it seems improvements as positive.

Not just positive, but mandatory: If Apple (AAPL) wants to sell 10 million iPhones this year, cracking the enterprise market is key.

First they would have to worry about security stuff, complying with the Federal Information Security Management Act. Some features they would be looking for:

Does the system encrypt the data coming in and out of the iPhone?

Does it support encrypted email?

Can you wipe the device remotely?

To satisfy the group's disaster recovery plan, is there a backup messaging feature in case the Exchange server goes down?

Assuming all of that passed, they will have to set up the Microsoft (MSFT) ActiveSync software that the iPhone uses to connect to Exchange for email, contacts, and calendars. Then they would have to figure out a deal with AT&T (T), Apple's exclusive U.S. carrier partner. (Their organization's BlackBerry account is currently with T-Mobile.) Then they would have to test iPhones on the system, buy a bunch, and set them up.

To be sure, this is a branch of the Federal govenment we're talking about, so we wouldn't expect them to turn on a dime. But we think many large companies won't be much nimbler. Which means the iPhone's first corporate customers are going to be small shops with dozens of people, not hundreds or more.

And given that a lot of the growth in the smartphone market -- even for RIM -- is coming from consumers who just want to connect to their corporate email as a convenience, Apple (AAPL) will focus on them first. They can tackle RIM's biggest business customers down the road.

There are applications you can think of–field technicians in areas with poor connectivity who need access to large amounts of data–but those are probably the exception, not the rule. Most road warriors could use Web-based tools with little loss in productivity. I have been amazed at the richness of some of the iPhone applications that I’ve seen and it’s only been a few months.

Creating Web-based applications and data might not work for every enterprise, but if it works for you, then the iPhone, and it’s future copycats, might prove to be a superior platform. Don’t make the mistake of thinking that just because the iPhone doesn’t work like the last generation of mobile devices that it’s not right for your organization. Regardless, the iPhone portends changes for the mobile market and it’s worth paying attention to what that means for your enterprise.