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iPhone 2.0 Poised for the Enterprise

With the release of the iPhone 2.0 software on 11-Jul-08, Apple is introducing the first device that could finally erode the dominance of Research In Motion’s ubiquitous BlackBerry. The iPhone not only represents Apple’s first major foray into the enterprise in many years, but could also offer Microsoft an opportunity to regain control of mobile messaging and drive adoption of Microsoft’s Exchange Server’s mobile features.

When the iPhone was initially released, it was essentially unsuitable for most enterprises larger than a small business. Without support for full Exchange (or Lotus Notes) synchronization, and lacking crucial security features, the iPhone was limited to one-off adoptions that often run counter to corporate policy. To access email you had to open up remote Internet access to the IMAP mail service in Exchange, and contact and calendar synchronization required docking an iPhone with a computer. It was even worse from a security standpoint, since there was no way to enforce remote policies nor to remotely wipe a lost iPhone full of sensitive corporate data. Finally, although enterprises could write rich, Web 2.0-style enterprise
applications for remote access, the iPhone was incompatible with major VPN gateways.

Much of this will change with the release of the iPhone 2.0 software (and the iPhone 3G). While most of the features were previously announced, Steve Jobs’s keynote at Apple’s Worldwide Developers Conference today provided additional information about what we can expect.

The most significant enhancement is the inclusion of Microsoft’s ActiveSync technology for iPhone device management and synchronization. By including full support for ActiveSync, Apple gained compatibility with every organization running Microsoft’s Exchange Server, which is by far the dominant corporate email platform. ActiveSync for Exchange includes all the major features required for enterprise mobile messaging, including full, over-the-air synchronization of contacts, calendars, and email; remote policy enforcement for device configuration and security; and remote wipe.

For remote access, Apple announced better support for VPN protocols, with Cisco VPN gateway compatibility being especially important, as it’s the most widely deployed platform in the market. While full details aren’t yet available, it also appears that Apple will provide full support for credentials-based network access over Wi-Fi using digital certificates and the 802.1X port-based access control protocol with WPA2’s more robust Wi-Fi encryption. 802.1X requires that a user provide some identity information before being given any network access beyond a sequestered area on a Wi-Fi access point; this can include two-factor authentication, a simple user name and password combination, or a personal digital certificate installed
individually on each computer or device. (WPA2 plus 802.1X is commonly called WPA2 Enterprise, as Apple labels it in their enterprise marketing pages.)

Enterprises will also be able to develop and deploy in-house applications to their iPhone users, perhaps allowing a multi-platform basis for support for companies that choose to allow multiple smartphone platforms, or that migrate from other platforms to the iPhone universe. Some companies have extensive in-house development departments for desktop and mobile applications. Jobs said during the keynote that enterprises will be able to distribute applications within a company, and then those applications can be installed via iTunes. A separate enterprise developer license is required; other details aren’t yet available about the mechanics.

The combination of secure remote access, full Exchange integration, remote management, and application development support will make the iPhone as viable in the enterprise as any other mobile platform, but the iPhone includes features that may enhance its enterprise appeal over alternatives.

With a fully functional Web browser, rich attachment viewing (including all Microsoft Office and iWork formats), and robust custom applications, the iPhone will provide a slick mobile workplace experience, likely to be far more appealing than other current options – in my experience, most mobile devices and applications are practically unusable due to user interface limitations. Even viewing basic documents, like spreadsheets or PDF files, is usually painful.

With pricing in the same range as competing products, full support for all core mobile features, and a superior user experience, the iPhone could even chip away at the darling of the corporate executive – RIM’s BlackBerry. This will actually benefit Microsoft by reducing reliance on the expensive BlackBerry Enterprise Server (BES) required for corporate messaging.

Most people don’t realize that all BlackBerry devices rely on BES servers for push email and remote management. For consumers, these servers are hosted by RIM for wireless providers. Enterprises must purchase enough BES servers to layer on top of their email servers to support connectivity (that’s why a consumer BlackBerry can’t synchronize calendars or contacts over the air, but enterprise versions can). Exchange itself added over-the-air synchronization in recent versions, but only after BES had become entrenched in the enterprise. Microsoft’s goal was to drive more users off competing server platforms, like Lotus Notes, and mobile devices, like the Blackberry, and to give Microsoft greater control over the mobile experience.

Although the iPhone won’t increase Microsoft’s market share in mobile devices, it positions Exchange as the only email server that directly supports the iPhone, Microsoft’s own mobile devices, and pretty much anything other than the BlackBerry. This could increase their lucrative server sales.

On the negative side, the iPhone will (as far as we’re aware) still lack copy-and-paste and the capability to edit Microsoft Office and iWork documents. Also, RIM still has a major advantage in international data roaming due to its highly efficient use of bandwidth and global infrastructure that eliminates most roaming data fees. Finally, the continued reliance on iTunes, still essentially a music management tool, for configuration and application installation and management, may irk corporate IT departments.

With the impending release of the iPhone 2.0 software, the iPhone is finally positioned to enter the enterprise market to the benefit of Apple, and possibly of Microsoft, but likely to the chagrin of Research in Motion. Let the enterprise games begin!

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