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iPad in the enterprise: Once the head goes, the body follows

In my talks with about 100 senior-level people at as many companies over the past six months, the feeling is that the tablet is here to stay and it’s going to be bigger than everyone expected it to be. It’s an always-on, always-with-you data experience. The other thing is that we spend about $1,500 for a laptop and another $300 per year over five years for the Microsoft Office suite. That same capability on an iPad is $600 to $800, and the software is $10 per application forever. It’s about one-third or one-fourth the price. The cost of ownership is inexpensive–and that’s just the first generation before they drop prices.

via Rise Of The Tablet Computer Page 3 of 3 – Forbes.com.

How fast is it catching on?

In the C-suite and the executive suite there is mass adoption. In Bank of America it took 60 days to hit the corporate standards list, which is the fastest any technology has hit that list. We’ve already bought 1,000 of these and we hadn’t bought anything from Apple in more than a decade. Executives everywhere are carrying iPads. And like we saw with the BlackBerry, once the head goes the body follows. The top executives get them and then they order them for the next 10 or 20 people.

The iPad use in corporate settings is even more disruptive than the Blackberry. No contract to sign, no administration overhead for voice and data plans. Trivial setup and instant gratification.

The way iPad is knocking down IT barriers to entry makes one wonder if Apple did not engineer it for this. But when you look at the product and positioning corporate use is that last thing you think of. This is often the case with disruptive products.

Lost of other great quotes in the article. For example: the iPad can be passed around a table but a laptop can’t.

  • http://lowendmac.com Tim Nash

    In Business, it seems to be more that IT Departments want to show that they can be ahead of the curve, having been driven by users to support the iPhone. For IT, iPads are easier to support than Windows and nearly as cheap as netbooks and can replace fair amounts of printing, so if users like them everyone wins.

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  • macorange

    Microsoft is about to launch a huge campaign to combat the iPhone, but it's the iPad it should be worried about. Not only does the iPad represent a more serious threat in the enterprise, which is Microsoft's key market, but it also is the first serious threat to Office, the huge Microsoft moneymaker. As this article alludes to, for $30 you can buy a suite of office tools that are superior to Office.

    I never used Pages and Keynote until I got my iPad. I knew they'd be good products, but I had invested a lot of effort to master Word and Powerpoint. But when these weren't available on the iPad, I dove in. Now, I'm not going back.

    If Office becomes threatened, then for the first time in our lives it would be a good move to short MSFT.

    • FalKirk

      Great insights, Macorange. People simply do not understand that Apple's iOS ecosystem has flanked Microsoft's seemingly invincible Maginot line and that both the Windows and the Office monopolies are in jeopardy.

      • yet another steve

        "flanked"

        yeppers.

        I don't have a blog to prove it but I still remember where I was when I had the epiphany that Apple was going to flank MS. Back when there was just an iphone without 3rd party apps. Because it leveraged the iTunes ecosystem. And because Apple was a platform company–OF COURSE there would be apps (just that iPhone OS 1.0) didn't have APIs they were ready to commit to.

        What I didn't anticipate is how flat footed MS' response would be.

        Nor could I have dreamed how well Apple would be at broken field running–well I did read once that Steve Jobs watched Patton the night before a big investor meeting that lead to funding Apple.

        Nor did I see that the iPad would be the assault on the capital–the enterprise. MS is still trying to cope with irrelevancy in mobile while Apple is assaulting their fortress of enterprise workstations.

        Steve Jobs is going down in business history with Henry Ford and Andrew Carnegie.

        And what really is inspiring is that Apple does this with scant monopoly power. There only true dominant share is in the media player market–a market whose days are over. But all they needed was a beachhead.

  • tim

    We bought a dozen. Speaking with peers in other companies – I know this isn't unusual. One of the advantages of the iPad in a corporate setting is that all the work many companies did to research the iPhone applies to the iPad (although there are some minor differences).

  • berult

    I ponder, wonder, think ideas and hypothesis over, split them asunder for a living. Productivity and creativity have shot way up since partnering in with iPad. It's a real-time creative thoughts enabling machine.

    One fluid coordinated motion of mind and fingers makes a stand-up "ponderer" out of an errant, pandering me. ITs beware, it may bite the hand …!

  • Sander van der Wal

    If the iPad will become big in business, do not expect business apps to stay as cheap as they are now. Developers need to stay in business, and the costs of running a Windows PC software house are the same compared to those of running a iOS software house.

    • http://www.asymco.com asymco

      What makes you think that it will be the same developers who will build apps? The game industry is going through this change now and you won't find the same cost structure in production for games for iOS as there was for consoles. The result is not pretty for the existing staff-heavy publishers.

      • Vik

        What is also often unmentioned or perhaps overlooked is that the iPad is not just a Tablet, it is a COMPUTER. What happens when major corporation realizes that for $700 ($600 for an iPad and a keyboard and iWork) they can get a computer that is mobile, has productivity software and no need for anti-virus software and very little administrative tech support?

        Why would you buy even a $500 computer and another $300 for Office and then several hundred dollars a year in antivirus software etc…

        What happens if Apple starts having software that is mouse enabled and touch enabled? Then the game is over…

    • Mark Sigal

      Two comments to the nudge re price. One, who says that the economic proposition needs to remain as low on the app side for the overall ROI proposition to hold.

      After all, there is an axiom that when the bar is really low, all that you have to do is raise it a bit to deliver heroic outcomes. Here, even if ASPs double or triple they are a fraction of the cost of traditional packaged software.

      Two, prices can afford to be lower, because without the same level of distribution, sales and marketing cost (and with built in access and billing relationship with 100% of the installed base), a developer can achieve a better return on equity.

      To me, the interesting disruption to watch is when a market goes from being based on complex, scarce and expensive to simple, ubiquitous and cheap, that disrupts many a developer who has to figure out how to make hay in such a universe, and that is very much a work in progress.

  • Sander van der Wal

    Let me ask you a counter question: why is medical software still as expensive on iPhone as it was on on the 90's PDA platforms?

    Back to the business. Apple's pricing on their business apps works for Apple because they make their money selling the iPad. It might work for similar horizontal business apps. It won't work for vertical apps, in particular it won't work for custom software.

    • http://www.asymco.com asymco

      Fair question. My answer would be because medical software is subject to regulatory oversight. Only a select few companies are able to navigate that oversight and are therefore in a position to charge for the privilege.

    • David Chu

      Could you explain what you mean by vertical apps?

      • http://www.asymco.com asymco

        Vertical means applications built for specific industries. For example retail sector apps or medical apps.

        The jury is still out on whether applications for these sectors will "horizontalize". The classic way that can happen is through browser-enabled interfaces.

    • http://worldturns.wordpress.com Barry O'Toole

      Medical software is expensive because:

      1. distribution is limited not only to doctors but only to doctors of that particular speciality/subspecialty.

      2. the developers CAN charge higher price and doctors WILL pay. Same with business apps even now. Wolfram Alpha used to be $50; Omni apps (like OmniGraffle/OmniFocus) are $50/$40 for the iPad.

  • Gandhi

    No wonder Asus CEO thinks the iPad is a mutant virus.

    http://www.engadget.com/2010/09/09/ce-oh-no-he-di

    The computer makers must be running scared. Why? Because neither Android nor Microsoft have anything close to a credible challenger to the iPad as yet. Sure, the computer makers can shoehorn Android and WinPhone7 in their current state – but that is exactly what it is – a kludge of a solution.

    Just wait till iOS 4.2 gets released in November. Built-in printing will be huge for the corporate drones.

  • Chris Harris

    Had a really interesting chat with a friend of mine the other day, who happens to be CEO of Fitness First. He has been flying round the world setting up Gyms in multiple countries and recently switched to using an iPad 3G.

    A few highlights:
    1. He uses an Office document reader that stores Powerpoint Presentations and Word Docs so that he can read everything on the plane. His PA sends them to him and he syncs wirelessly.
    2. He sits down next to the people he is visiting and walks them through the presentations on the screen. No more projectors.
    3. He has a stack of SIM Cards for each country he visits, so he can switch them over.
    4. He only uses 4-5 Apps and found the App Store experience pretty poor in that he didn't find much else that was good. Having said that, he wasn't aware of Instapaper or Reeder. So there is clearly room for an 'executives pick this' list.

    • http://www.asymco.com asymco

      Fascinating.

  • Rob Scott

    I am seeing iPads everywhere here too. All the executives have one, some are waiting for their orders. I have been playing with their devices and the most disappointing thing so far is the lack of Apps and content on their devices. I which someone would load them so they can appreciate the device more.

    I think the iPad is only launching in Oct in the country, but is already more common than the iPhone was when it first launched.

    The iPad is going to be huge, and this can only spell trouble for Microsoft.

    • Vertti

      It is huge already if Apple produces 3 million iPads per month ie 9 million iPads per quarter and sells around 4 million Macs per quarter then it is total of 13 milion computers per quarter. The number one PC manufacturer HP sold Q309 16,120 million PC's worldwide. Suddenly Apple is number two or perhaps number one in this game. That quarter 80,864 million PC's were sold so in that perspective it would meen that Apple has suddenly taken around 16% market share. This is catastrophic also revenue share and profit share wise because iPad's ASP is much higher than what these netbooks have and Apple already dominates (something 90%) the premium category.

  • Vertti

    And what is extra wonderful is that next year Apple will be a 100 billion dollar company (revenue) and then next year it will be a double 100 billion dollar company (revenue and cash), next mark will be a trillion dollar company (market gap) :D

  • Iphoned

    Didn't T. Cook say in July that 80% of F100's and 60% of F500's are piloting iPADs? Once the pilots turn into deployments, there will be a hockey stick demand from the Enterprise.

    Except personal-productivity (MS Office watch out), the enterprise apps are "server" apps,so perhaps there won't be as much app-provider change-over/disruption after all. E.g would we really expect CRM vendors to change because of the iPAD?

    Apple just needs to find a way to block Android tablets long enough for iPAD to take hold (something they failed to do in the phone space.)

    • David Chu

      The iPad isn't limited to the same constraints that the iPhone is. I'm sure there are a lot of features Apple would like to include in the iPhone but can't yet because they are waiting for the carriers to be catch up.

      It's amazing to think that some of the new features we are only seeing today have been in development for 2 years.

    • http://www.asymco.com asymco

      Are you suggesting that the iPhone did not take hold?

      • David Chu

        Suggesting the opposite. The iPad will be adopted even faster than the iPhone.

    • http://worldturns.wordpress.com Barry O'Toole

      Android will eat MS's and Nokia's lunch, but not Apple's. MS (in the US) and Nokia (everywhere else) had flooded the market with dozens of models of all price points, disregarding the effect of OS fragmentation. People bought it due to lack of choice.

      I've dealt this issue here:

      http://worldturns.wordpress.com/2010/08/19/future

    • http://worldturns.wordpress.com Barry O'Toole

      Android will eat MS's and Nokia's lunch, but not Apple's. MS (in the US) and Nokia (everywhere else) had flooded the market with dozens of models of all price points, disregarding the effect of OS fragmentation. People bought it due to lack of choice.

      I've dealt this issue here:

  • yowsers

    Jobs' car & trucks analogy comes to mind. There's some insight in that. I figured he was referring to the consumer market, but he may have equally seen a corporate transformation where the desktop / laptop will no longer be ubiquitous, either. HP, Dell, Lenovo, MSFT et al are truck makers, and they'll need to get a passenger car lineup in the next few years.

    If a fair amount of a corporation's work force is on a tablet, I imagine they'll keep a few desktop / laptops around at a shared work station or kiosk for when intensive computing work is needed. Instead of 90 PCs for 100 workers (or whatever it's now at), it may start a relentless drop over time to 80, 70, 50 and then flatten out around 20 PCs per 100 (those numbers are SWAGs on my part).

    This is potentially devastating for some of them. HP's purchase of Palm may not be such a skeptical long shot after all (it's still not guaranteed, though.) I have no idea how suitable Android (and Chrome?) will become as a tablet OS that corporate IT depts will accept.

    iOS has its roots firmly planted in OS X, of course. Does that give iOS resources and depth such that OS's that started life exclusively as a mobile platform would lack?

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