iOS and Android Aren't Competitors, According to Enterprise Customers
Large enterprises are buying up Apple (AAPL) iPads in droves, but not because it's a tablet. It's because it's an excellent platform for trying out new enterprise cloud services.
As I wrote this summer, the iPad's popularity in the workplace has very little to do with its form-factor. Tablet's aren't new. (Remember the Windows-based tablet PCs that Bill Gates was so sure would reach ubiquity?) Instead, the iPad seems to be competing with older enterprise equipment -- not with other tablets like those running Google (GOOG) Android.
The iPad's advantage is its accessibility to new productivity and business apps, many of which are sold on a "freemium" basis, meaning that employees can pilot an app in their group for free, and lobby their company to pay up once they want to deploy the software at scale. In short, companies love the iPad for the App Store. Instead of blowing thousands of dollars on a new, un-tested piece of software, they can now try out several different solutions from the comfort of the App Store, and pay up once they've found a winner.
There have been two significant beneficiaries of this trend, which I wrote about this month in the MIT Technology Review. One has been Box.net, which has been rolling out excellent cloud-based solutions for enterprise customers that replace much of the Microsoft's (MSFT) Sharepoint solutions. Another is Good Technology, a mobile platform company that has just released a survey of its 4,000 enterprise customers about iPad use.
Good says that of its 4,000 customers, 708 (or about 18%) are using the iPad in one way or another. The financial services industry represent 36% of the iPad use among their customers, followed by high tech companies (with 11%), health care (with 10%) and legal services (with 8%). What's interesting isn't so much the nature of these companies as the gravity of their work. If you thought that the iPad was going to be some fluffy accessory used by students, marketers and sales people, you'd be wrong. (But at least you'd be in good company -- Bill Gates went on record earlier this year saying the iPad's touch interface wouldn't end up being mainstream enough for businesses.)
Good Technology's survey results are not indicative of all enterprises, of course: these are only Good customers that were queried. However, it's salient that Good -- a company that makes its money providing an admin layer over various iOS and Android devices -- has any financial services, legal, or health care customers at all. Several years ago, those enterprises might have been 100% locked into an on-premise Microsoft suite running only RIM (RIMM) Blackberry devices or Windows Phones. Now, these companies are letting their employees choose which iOS or Android devices they use, and they're looking to Good and Box.net to help administer them.
This is a crucial distinction, because it alters the way we can perceive competition in the handheld device market. Android tablets (like the new Samsung Galaxy Tab) aren't up against the iPad; in fact, both Android and iOS have reached tentative acceptance as the new de-facto mobile enterprise platforms. Rather, they're rivaling RIM, which has a slipping legacy footprint.
Which will win? Perhaps none of the above. If companies begin allowing Android and iOS devices to live alongside Blackberrys in the office, then the biggest advantage might go to carriers like AT&T (ATT), who can unify the mess. The nation's second-largest network is now pushing its "middleware" platform to enterprise customers, who might want to build proprietary software on AT&T's platform and have it work on any handheld its employees choose.
One company that is notably absent from all this talk of enterprise mobile apps: Microsoft, which has been slow to roll out its cloud-based Sharepoint app for Windows 7 Phone, and has not announced plans to make Sharepoint apps for iOS, Android or RIM phones.
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