Apple and IBM are hooking up and on the surface this looks like the perfect combination of firms. IBM is solidly focused on the back of the enterprise and it has eliminated its consumer-facing efforts. Apple is all about consumer electronics and its one enterprise effort, servers, was killed several years ago. The combination of the two firms could be an incredibly powerful partnership if both companies learn from the past and focus on making the partnership work.
There have been three high-profile partnerships between Apple and IBM in the past and all failed. Now I covered all but the AIM partnership closely and most of the reasons these failed no longer apply. Kaleida Labs and Taligent were both development initiatives and AIM was a derivative alliance focused on Microsoft. At that time (in the 1990s), Apple leadership was in trouble, IBM was still competing with it across PCs, printers, and some services and both firms seemed to staff the efforts with people they didn’t want, yet didn’t want to fire. Looking back, it is actually kind of surprising these efforts lasted as long as they did.
Both IBM and Apple are in very different places this decade. Both are far more focused on areas that don’t overlap now and both recognize that to advance, they need what the other firm provides. In addition, this is more of an alliance than it is a joint venture and IBM does alliances relatively well. Also, Tim Cook should be better at it than Steve Jobs was. Jobs thought folks that came out of IBM were idiots (personally, I think it was because they tended to have the deep engineering qualifications he lacked, which he found intimidating), and Cook doesn’t seem to have any of those issues. Therefore, the two companies should be able to partner far more successfully now.
The enterprise is actually in critical need of a solution that both embraces what the consumer wants to use and what IT organizations need. So far, no single solution does both well. Google and Samsung don’t have the big business reputation and experience to make this work and Android has been a security nightmare of late. Apple, which once led the smartphone market, is now chasing Google and IBM lacks traction for a variety of cloud services because it doesn’t have a consumer-facing business anymore. Increasingly, the requests for such services are coming from line managers and employees—not executives or even IT. Separately, neither firm is in a good position to compete with Google, Amazon, or even a recovering Microsoft, but together they could build something that is really interesting.
…But partnerships between large companies are very difficult to pull off. This is why EMC created the VCE venture, because it forced the firms to work together under a shared economic model. Without a tight focus, allied firms have a tendency to split apart and focus on the things that are more tightly under their control. Apple has a particularly bad recent history with partnerships. As of late, its Google and Samsung partnerships ended up in lengthy litigation. Granted, much of this breakdown happened under Steve Jobs’ watch and was arguably the fault of Google and Samsung. However, Apple’s best and longest lasting partnership has been with Microsoft and it has been almost painful to watch at times—kind of like a marriage that only exists because of the kids even after the kids have moved out. IBM does a lot of partnerships but most have been more about the announcement than the substance of the result. As a big complex company, it is really hard for IBM to focus on any one partnership.
As a result, both IBM and Apple will have to really work to make this agreement pan out and produce tangible benefits, but both appear motivated to do exactly that.
Wrapping Up: Personally Motivated CEOs Could Be the Key
This partnership is potentially incredibly powerful for both companies and it should be successful. Of course, we could say the same thing about a marriage and it could still later fail. Not only do both firms have histories, they have troubled histories with each other. However, I think that these companies can and are motivated to overcome their past mistakes. Both CEOs are personally motivated to see this work because they both are under a ton of pressure to pull rabbits out of their collective hats. This partnership has the potential to be that magical rabbit and if it gets the attention it needs, it will stand as a huge win for both companies and their executive management teams. Just think of Siri backed by Watson, and you get a sense of just how amazing this hook-up could eventually be.