April 24, 2008

Cupertino, Calif.-based Apple's March announcement that it will introduce an enterprise-ready version of its iPhone generated considerable buzz. But there still are questions around the popular device's viability as a corporate tool in financial services as well as other industries, observers say.

The enterprise iPhone is due to be released in June via a software update. Among the features that Apple says will transform this high-end consumer device into a business tool are full support for Microsoft's (Redmond, Wash.) Exchange corporate server with ActiveSync technology and increased security.

The upgraded Exchange support will allow Apple to deliver push capabilities for features such as e-mail, contacts, address lists, calendars and other enterprise-grade applications. This means that rather than wait for the device to query a company's servers for new information, the firm can push the data to the device in near real time. The enhanced security includes the capability to remotely wipe a device in case it is lost or stolen as well as support for Cisco's (San Jose, Calif.) IPsec virtual private network (VPN), certificates, identities and the WPA2/802.11x WiFi security standard.

"Originally, [the iPhone] didn't have the key elements to work in an enterprise," contends Ken Dulaney, VP and distinguished analyst with Gartner (Stamford, Conn.). "But with the introduction of [Apple's] Firmware 2.0 and the ActiveSync licensing, this gives Apple sufficient safeguards to be used in the enterprise."

Ahmed Datoo, VP of marketing at Zenprise, a Fremont, Calif.-based developer of software to monitor and troubleshoot BlackBerrys, says the move by Apple was overdue. "The biggest inhibitor to the iPhone entering the enterprise was its lack of push e-mail and calendar-sync capability," Datoo comments. "Apple did the right thing to license [Microsoft's] ActiveSync because the iPhone is now gaining access to security features critical to the enterprise. This is a great first step for Apple."

Is the iPhone Safe?

But Gartner's Dulaney cautions that the most appropriate business use of the iPhone is at the appliance level, rather than the platform level. The device's security and functionality are sufficient for users to perform actions such as sending and receiving e-mail and managing personal calendars, he explains. But the iPhone does not appear to be ready for PC-equivalent support on the platform-computing level, Dulaney asserts, noting that, in particular, the device's security is untested long-term.

"If [firms] expect to be able to place banking applications like CRM or business intelligence on the iPhone, it's not quite ready for this," Dulaney says. "But if you use something like salesforce.com, you can use that on the iPhone in a narrow manner since there are other hardware devices to support this."

Even though Apple enhanced the iPhone's security, Zenprise's Datoo adds, "There is still security risk associated with the iPhone, such as the camera or problems with Bluetooth where an outsider can connect to your device and read the content on it." Another vulnerability, he points out, is the limited ability to manage the devices. "IT needs the ability to restrict users from downloading applications on their own that may interfere with their company's core applications," Datoo says. "I don't think Apple really addressed this yet."

Gartner's Dulaney says Apple mentioned the iPhone Configuration Utility, which appears to be a management tool to help IT administrators manage the devices. "But we really don't know much about its capabilities yet," he comments. Dulaney adds that Apple is notorious for keeping new features and functionality under wraps. But, he says, this consumer marketing approach could be detrimental to corporate ambitions.

Another hurdle for the iPhone is the extent to which RIM's (Waterloo, Ontario) BlackBerry devices already are entrenched in corporate America. "Most IT executives I've talked to about the iPhone said they really don't need anything more to bring into enterprise IT," says Dulaney. "But they also realize [the iPhone] is a technological breakthrough and that they don't have much choice anymore. So they want to know how they can bring the iPhone into the enterprise in a somewhat controlled fashion."

"It will be tough for Apple," Zenprise's Datoo adds. "But wireless growth in the enterprise will be explosive over the next few years. Our customers double the number of mobile users they support every year."

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