That’s “E” as in the Enterprise. Even though the iPhone didn’t look like
an enterprise device when it was first launched, some Apple fans are hoping
information technology (IT) departments will support it anyway.

After Forrester Research released a report in December titled, “The iPhone Is Not Meant for Enterprises,” the blogosphere went wild, with some respondents saying “duh” and others saying IT departments had better get used to the idea of the iPhone in the enterprise because it’s going to wind up there anyway – if it hasn’t already.

Speculation surrounded the iPhone’s role in the enterprise even before it hit store shelves last year. When it was launched in late June, customers at Apple stores were allowed to buy no more than two iPhones – clearly, not a ploy to attract enterprises.

GRABBING A SHARE
Fast forward just over six months to Macworld in January, and Apple CEO Steve Jobs is citing Gartner statistics showing the iPhone had a 19.5% U.S. smartphone market share by the end of September, second only to Research In Motion’s (RIM) 39%. (Ironically, where RIM excelled at going after enterprise users and later courted the consumer market, Apple came out with a seemingly pure consumer device that is getting a lot of attention for its role or non-role in the enterprise.)

Just last week, AT&T grabbed headlines after posting new rate plans for business customers, who need to sign a 2-year service agreement or a renewed 2-year agreement. New Corporate Responsibility Users (CRUs) and other corporate-liable users must activate an eligible voice plan and an enterprise data plan. The data plans range from $45 per month for unlimited Web and e-mail usage and 200 text messages to $65 per month for unlimited Web and e-mail and unlimited SMS. All plans include visual voice mail.

Presumably a music device first and foremost, users say there’s more than music to like, such as the user interface (UI) and Web browser. The Forrester report notes that a lot of IT professionals are being challenged by users to support the iPhone so employees can have their corporate e-mail on the same device that allows them to listen to tunes and watch YouTube clips.

Forrester gave 10 top reasons for IT to not support the current iteration of the iPhone. One of them states that the iPhone can sync with Microsoft’s Exchange and IBM’s Lotus Notes over IMAP and SMTP ports, but a company’s server and security admins have to configure their infrastructure to do so or buy a mobile gateway from Synchronica or Azaleos. Even then, the iPhone can only check for e-mail every 15 minutes compared with other enterprise-class devices that have the capability to check every minute or at preconfigured intervals. Other reasons Forrester cites relate to security, productivity and the fact AT&T will not sell the iPhone to business accounts, only consumers.

The report also notes that IT organizations have been stretched to support whatever mobile platforms their employees have brought into the company. With such a diverse set of platforms – including BlackBerry, Linux, Palm OS, Symbian, Windows CE, Windows Mobile and now Mac OS X – IT departments can’t be expected to support each and every operating system. Forrester recommends IT support two operating systems, and in the United States, that means Windows Mobile and RIM.

U.S. Smartphone Market Share

Apple CEO Steve Jobs told Macworld attendees that the iPhone captured nearly as much market share in its first few months as Palm, Motorola and Nokia combined.

NOT IF, BUT WHEN
You would be hard-pressed to find anyone arguing that Apple is intentionally going after the enterprise market. Apple’s products historically play well with the consumer and educational markets, but you don’t see that many large enterprises standardized around the Mac.

The enterprise is a tough market to sell into, requiring negotiations around pricing, among other things, and that’s not something Apple likely is interested in, says Dekkers Davidson, head of Oliver Wyman’s North America wireless practice. For industries such as financial services that require heightened levels of security, the BlackBerry is the de-facto standard. A lot of IT departments are reluctant to create new risks.

That doesn’t mean there isn’t a place for the iPhone in some enterprises. The BlackBerry is well-tailored for big businesses, but the iPhone could crack the small and mid-sized enterprise. “Over time, I’m pretty confident that Apple will figure out some ways in the enterprise market,” Davidson says.

“I don’t think Apple is ready to deal with the enterprise market,” says Andrew Seybold Inc. analyst Barney Dewey, whose wife is one of the many Apple employees using the iPhone. “That doesn’t mean they won’t get there. I don’t know when.”

IT Spends More Time on Mobile

According to a Web poll released last month by the Computing Technology Industry Association (CompTIA), IT departments are spending more time and resources supporting mobile communications and computing devices, with the BlackBerry being the device of preference for most organizations. Nearly two-thirds of the 816 individuals who participated in the poll said their IT departments are spending more time and resources supporting the BlackBerry than any other comparable device. Pagers placed a distant second in the Web poll, at 10.9%. Other mobile devices mentioned included digital music players (4.5%), handheld computers (4%), personal digital assistants (2.9%), cell phones (2.6%), iPhones (2.3%), laptop computers (2%), smartphones (0.5%) and tablet PCs (0.5%).

READY FOR THE CALL
Etelos is one company that isn’t waiting. The technology company has seen interest from mainly small businesses in its Etelos CRM for iPhone, which the company uses internally not only for connecting customers and partners but also for e-mail, chat, project and tasks, says Don Campbell, vice president of strategic development. The company says its CRM for the iPhone is a great application for the mobile business person.

Like most of the team at Etelos, Campbell uses his iPhone for a lot of personal things, as well as managing tasks and e-mail. “It’s a great blend of personal and work stuff,” he says. A frequent traveler, he also likes that he has access to podcasts and music while traveling. “I used to carry a Treo. This is light years better than that.” And, he adds, “it’s actually a good phone.” Initially, he wasn’t planning on buying one, but once Etelos adapted its platform for the device, “we found ourselves using them all the time.”

Handmark offers a free version of Pocket Express travel services built specifically for the iPhone and iTouch, Apple’s Wi-Fi device without the phone. With the service, customers get access to airline schedules and flight status, hotel information and bookings from Hotels.com, dozens of click-to-call travel numbers, a 24/7 travel reservations service and automatic conversions for 164 currencies worldwide.

That sounds like something custom-made for the business traveler, although the twice-a-year leisure traveler might find it attractive as well. There’s no simple demographic or classification for the service, other than people who can afford to spend $400 on the latest telephony device, notes Douglas Edwards, Handmark founder and CMO.

Handmark and others are eagerly awaiting the release of the iPhone SDK this month. Many onlookers agree the SDK will change the game. Then, all kinds of third parties will offer applications, including for the enterprise. Even Forrester doesn’t rule out supporting the iPhone in the future. Because of its intuitive UI and inevitable influx of third-party applications, it will be hard to prevent it from eventually becoming a business-class solution, the researchers say.

Perhaps Jobs said it best at Macworld: “The iPhone is not standing still. We keep making it better and better and better.”

10 Reasons Why IT Should Not Support the iPhone

1. Doesn’t natively support push business e-mail or over-the-air calendar sync. 2. Doesn’t accommodate third-party applications, including those internally developed. 3. Doesn’t support securing data on the device through encryption. 4. Can’t be remotely locked or wiped in the event of a lost or stolen device. 5. Lacks a hard keypad that provides feedback, which isn’t ideal for rapid and accurate input. 6. Has limited service provider support and its carrier lock-in inhibits flexibility. 7. Comes with a premium price tag. 8. Is only the first generation. 9. Lacks a removable battery, so when the battery kicks it, so does the device. 10. Lacks case studies of firms that have deployed it enteprisewide.

For the full report, go to http://www.forrester.com/go?docid=44375. It’s free for Forrester clients and available for purchase by non-clients.

Source: Forrester Research, December 2007