Chicago (IL) – Enterprise features alone may not be enough for the iPhone to get itself established as a serious business phone. Analyst Jack Gold said that the upcoming iPhone 2.0 update delivers only a minimum set of enterprise requirements that define a useful enterprise smartphone. Down the road, the iPhone will need many more features and a complete ecosystem, if Apple wants the device to become an enterprise device.
Apple is throwing a lot of force behind the message that the iPhone is the ultimate business communication tool. But Jack Gold of J.Gold Associates believes that the handset is not yet ready for big business. According to the analyst, "most enterprises should wait before broadly deploying and supporting the iPhone," echoing similar thoughts published previously by from Gartner. Gold recommends a gradual deployment of the iPhone to those executives “who demand it”. Other enterprise employees should wait until Apple addresses some security concerns with future software upgrades.
Gold concluded that Apple may have a problem with the way it approaches the corporate world. The company is unknown to many enterprises and it cannot deliver a complete solution - besides the product itself. Its exclusive partnership with AT&T is limiting choice and support options. There are just basic security features in the iPhone 2.0 software and more advanced features are needed for wide-scale handset adoption, according to Gold. The ability to remotely clean the data stored on the handset isn't enough in terms of data security, as the data on the handset isn't encrypted.
Big businesses also aren't exactly happy with a limited application distribution system through the App Store or iTunes. On a more practical side, the fact that a user cannot replace the battery can become deal breaker for those who depend on their handset all day.
These are some of the top concerns that need to be addressed in a proper way, Gold believes. And only if that is the case the iPhone could be positioned as an alternative to the Blackberry. Here is an overview of Gold’s primary concerns.
Non-replaceable battery
Power business users aren't happy with the lack of a removable battery in the iPhone and iPhone 3G. Battery life is more important for business users than the average consumer. Some business users may need a second iPhone 3G just to get through an 8-hour day, Gold stated.
AT&T ties
Businesses want choice, especially U.S. enterprises, but the iPhone offers no choice of carrier. Gold believes that Apple’s decision to lock itself into a contract with AT&T may pose a problem, especially since companies tend to be tied to other carriers and bulk contracts. "Enterprises generally have long term company-wide contracts with carriers and if the enterprise is not an AT&T customer, this means acquiring individual contacts for users. Enterprises generally do not talk to a carrier to get a specific device (e.g., Blackberry has signed up virtually every carrier)," the analyst wrote. Answering concerns about the cost of AT&T's global roaming service and support abroad, an AT&T spokesman confirmed that Apple will be responsible for technical problems related to the handset, while carriers abroad will handle service on the device outside the U.S.
Lack of device management and end user policy settings
The iPhone 3G lacks device management tools and end user policy settings to enable IT personnel to manage the device, deliver applications and set policies, such as the ability to turn off the camera if required by company policy.
No full security compliance required in regulated industries
Some industries are regulated, meaning they are required to meet higher security standards than Fortune 500 enterprises. Although some developers at this year's WWDC have shown interesting applications for the medical sector and Internet banking, Gold thinks that the iPhone currently has no opportunities in regulated industries. "It is highly unlikely [that the] iPhone can meet compliance standards for [a] full security and audit trail in regulated industries such as financial services, health care, government, retailing and legal services."
No IM/UC applications and integration
Once reserved for teenagers to keep in contact with their friends, instant messaging (IM) has become an important business tool. Most Microsoft-based businesses rely on the software giant's unified communication (UC) solution that, among other features, delivers IM capabilities through Messenger services. Other vendors, including Cisco, also offer integrated UC solutions. Apple did not include support for IM/UC technologies in the iPhone 2.0 software. It is likely that third-party vendors will deliver IM solutions for the iPhone, but until they do, enterprises will not be able to completely integrate the handset into their own UC network. And even then it is unlikely that business will agree to rely on a rather new application.
No data encryption on the device
The lack of data encryption is considered a serious deal breaker. Apple integrated the capability to remotely wipe data from the handset, but it is hardly enough. In the case of a lost or stolen handset, the iPhone allows access to data such as contact information, calendars, email messages, important notes, passwords and other sensitive information until the information is removed remotely. A major downfall is the fact that data stored on the iPhone is not encrypted. BlackBerry smartphones encrypt the data on the handset itself.
This omission is somewhat surprising since the iPhone runs a variant of OS X, which supports the encryption of user data out of the box. Real-time data encryption requires significant processor horsepower, which could significantly reduce the battery life. Gold said that an enterprise beta tester, who wanted to remain anonymous, singled out the lack of native encryption as the biggest concern that renders "any other concerns about functionality secondary."
Limited enterprise application distribution
Gold and some IT managers are also concerned about lack of over-the-air means to directly deploy enterprise applications. The fact that enterprises are required to distribute their applications through Apple servers is "generally unacceptable for mission critical and/or proprietary applications," he said. Big businesses typically want complete control over their application deployment and are reluctant to distribute their proprietary software through public networks. Apple allows enterprise applications to be integrated on the company's intranet so that their employees can download a software package and side-load it manually onto their iPhones using iTunes. Gold thinks that many companies won’t agree to such an infrastructure.
Lack of enterprise connections
Apple is going to great lengths to please enterprises, but the company still feels the effects of its dramatic failure with the business world in the 1980s. Since Windows took over the corporate businesses, Apple opted to become a consumer-oriented manufacturer. This transformation was complete when Steve Jobs announced that Apple would become just "Apple, Inc.", instead of "Apple Computers" during the iPhone introduction at MacWorld Expo in January 2007. Gold believes that the absence of an Apple development environment within businesses is a serious limitation. As a result, the integration of Apple technologies requires companies to add staff and increase training. He also mentioned that there is no information about the iPhone's durability.
Ecosystem
Apple does not have enough employees and support personnel catering exclusively to enterprises who are used to having a complete ecosystem of partners, training and support solutions available 24/7. Apparently, Apple is aware of this situation and delivered WWDC sessions this year that, for the first time, cater to the enterprise world. But Apple needs to do much more to become a viable, acceptable player. It is generally believed that Apple needs to build a much more efficient ecosystem capable of delivering complete business solutions - including resellers, third-party developers, support, service and training.
That means … no iPhone in businesses?
Gold’s remarks are echoed by several other analysts. For example, Gartner analyst Ken Dulaney said earlier this week that businesses should provide iPhone access only to a limited set of applications, such as Exchange and iPhone's email client. Of course, it is entirely possible that Apple addresses some of these limitations with the final version of iPhone 2.0 software update scheduled to be released on July 11. Analysts agree that subsequent software updates are more likely to deliver solutions to eliminate concerns down the road.
"The iPhone in its current incarnation is not ready for large scale, full workforce deployment. Third party add-ons will become available for the device in the next year, aligning it more closely with enterprise-class devices and making its innovative features a possible choice for certain applications," Gold wrote.
"The iPhone remains a consumer-centric device, and although many enterprise users may lobby for, or even acquire an iPhone, it is not yet ready for use as a primary enterprise application device," he said.
However, doesn't mean that enterprise doors are completely shut for the iPhone at the moment. According to Gold, enterprises that are looking for ways to deploy the iPhone now should deploy the handset as the exception, for example for executives and for certain IT staff
Apple is throwing a lot of force behind the message that the iPhone is the ultimate business communication tool. But Jack Gold of J.Gold Associates believes that the handset is not yet ready for big business. According to the analyst, "most enterprises should wait before broadly deploying and supporting the iPhone," echoing similar thoughts published previously by from Gartner. Gold recommends a gradual deployment of the iPhone to those executives “who demand it”. Other enterprise employees should wait until Apple addresses some security concerns with future software upgrades.
Gold concluded that Apple may have a problem with the way it approaches the corporate world. The company is unknown to many enterprises and it cannot deliver a complete solution - besides the product itself. Its exclusive partnership with AT&T is limiting choice and support options. There are just basic security features in the iPhone 2.0 software and more advanced features are needed for wide-scale handset adoption, according to Gold. The ability to remotely clean the data stored on the handset isn't enough in terms of data security, as the data on the handset isn't encrypted.
Big businesses also aren't exactly happy with a limited application distribution system through the App Store or iTunes. On a more practical side, the fact that a user cannot replace the battery can become deal breaker for those who depend on their handset all day.
These are some of the top concerns that need to be addressed in a proper way, Gold believes. And only if that is the case the iPhone could be positioned as an alternative to the Blackberry. Here is an overview of Gold’s primary concerns.
Non-replaceable battery
Power business users aren't happy with the lack of a removable battery in the iPhone and iPhone 3G. Battery life is more important for business users than the average consumer. Some business users may need a second iPhone 3G just to get through an 8-hour day, Gold stated.
AT&T ties
Businesses want choice, especially U.S. enterprises, but the iPhone offers no choice of carrier. Gold believes that Apple’s decision to lock itself into a contract with AT&T may pose a problem, especially since companies tend to be tied to other carriers and bulk contracts. "Enterprises generally have long term company-wide contracts with carriers and if the enterprise is not an AT&T customer, this means acquiring individual contacts for users. Enterprises generally do not talk to a carrier to get a specific device (e.g., Blackberry has signed up virtually every carrier)," the analyst wrote. Answering concerns about the cost of AT&T's global roaming service and support abroad, an AT&T spokesman confirmed that Apple will be responsible for technical problems related to the handset, while carriers abroad will handle service on the device outside the U.S.
Lack of device management and end user policy settings
The iPhone 3G lacks device management tools and end user policy settings to enable IT personnel to manage the device, deliver applications and set policies, such as the ability to turn off the camera if required by company policy.
No full security compliance required in regulated industries
Some industries are regulated, meaning they are required to meet higher security standards than Fortune 500 enterprises. Although some developers at this year's WWDC have shown interesting applications for the medical sector and Internet banking, Gold thinks that the iPhone currently has no opportunities in regulated industries. "It is highly unlikely [that the] iPhone can meet compliance standards for [a] full security and audit trail in regulated industries such as financial services, health care, government, retailing and legal services."
No IM/UC applications and integration
Once reserved for teenagers to keep in contact with their friends, instant messaging (IM) has become an important business tool. Most Microsoft-based businesses rely on the software giant's unified communication (UC) solution that, among other features, delivers IM capabilities through Messenger services. Other vendors, including Cisco, also offer integrated UC solutions. Apple did not include support for IM/UC technologies in the iPhone 2.0 software. It is likely that third-party vendors will deliver IM solutions for the iPhone, but until they do, enterprises will not be able to completely integrate the handset into their own UC network. And even then it is unlikely that business will agree to rely on a rather new application.
No data encryption on the device
The lack of data encryption is considered a serious deal breaker. Apple integrated the capability to remotely wipe data from the handset, but it is hardly enough. In the case of a lost or stolen handset, the iPhone allows access to data such as contact information, calendars, email messages, important notes, passwords and other sensitive information until the information is removed remotely. A major downfall is the fact that data stored on the iPhone is not encrypted. BlackBerry smartphones encrypt the data on the handset itself.
This omission is somewhat surprising since the iPhone runs a variant of OS X, which supports the encryption of user data out of the box. Real-time data encryption requires significant processor horsepower, which could significantly reduce the battery life. Gold said that an enterprise beta tester, who wanted to remain anonymous, singled out the lack of native encryption as the biggest concern that renders "any other concerns about functionality secondary."
Limited enterprise application distribution
Gold and some IT managers are also concerned about lack of over-the-air means to directly deploy enterprise applications. The fact that enterprises are required to distribute their applications through Apple servers is "generally unacceptable for mission critical and/or proprietary applications," he said. Big businesses typically want complete control over their application deployment and are reluctant to distribute their proprietary software through public networks. Apple allows enterprise applications to be integrated on the company's intranet so that their employees can download a software package and side-load it manually onto their iPhones using iTunes. Gold thinks that many companies won’t agree to such an infrastructure.
Lack of enterprise connections
Apple is going to great lengths to please enterprises, but the company still feels the effects of its dramatic failure with the business world in the 1980s. Since Windows took over the corporate businesses, Apple opted to become a consumer-oriented manufacturer. This transformation was complete when Steve Jobs announced that Apple would become just "Apple, Inc.", instead of "Apple Computers" during the iPhone introduction at MacWorld Expo in January 2007. Gold believes that the absence of an Apple development environment within businesses is a serious limitation. As a result, the integration of Apple technologies requires companies to add staff and increase training. He also mentioned that there is no information about the iPhone's durability.
Ecosystem
Apple does not have enough employees and support personnel catering exclusively to enterprises who are used to having a complete ecosystem of partners, training and support solutions available 24/7. Apparently, Apple is aware of this situation and delivered WWDC sessions this year that, for the first time, cater to the enterprise world. But Apple needs to do much more to become a viable, acceptable player. It is generally believed that Apple needs to build a much more efficient ecosystem capable of delivering complete business solutions - including resellers, third-party developers, support, service and training.
That means … no iPhone in businesses?
Gold’s remarks are echoed by several other analysts. For example, Gartner analyst Ken Dulaney said earlier this week that businesses should provide iPhone access only to a limited set of applications, such as Exchange and iPhone's email client. Of course, it is entirely possible that Apple addresses some of these limitations with the final version of iPhone 2.0 software update scheduled to be released on July 11. Analysts agree that subsequent software updates are more likely to deliver solutions to eliminate concerns down the road.
"The iPhone in its current incarnation is not ready for large scale, full workforce deployment. Third party add-ons will become available for the device in the next year, aligning it more closely with enterprise-class devices and making its innovative features a possible choice for certain applications," Gold wrote.
"The iPhone remains a consumer-centric device, and although many enterprise users may lobby for, or even acquire an iPhone, it is not yet ready for use as a primary enterprise application device," he said.
However, doesn't mean that enterprise doors are completely shut for the iPhone at the moment. According to Gold, enterprises that are looking for ways to deploy the iPhone now should deploy the handset as the exception, for example for executives and for certain IT staff