By BEN WORTHEN of the Wall Street Journal
In less than a year, the iPhone has won the hearts of users, who speak of the combination cellphone, Internet device and music player with reverence.
Indeed, the iPhone, which maker Apple Inc. says has captured 28% of the U.S. smart-phone market, seems to be loved by everyone — everyone, that is, except those who work in corporate information-technology departments.
Designed with the consumer in mind, the iPhone is less secure than business-oriented smart phones such as those from Nokia Corp. or Research In Motion Ltd.’s BlackBerry, according to IT professionals. But that isn’t stopping people from using the device for work-related tasks such as checking email, managing sales contacts and getting information about prospective clients. In fact, market researcher Nielsen Co. estimates that one-quarter of iPhone owners over the age of 18 pass their phone bills on to their employer, suggesting significant use of the device for business.
Many IT groups have banned the iPhone from their workplaces, complaining that there is no way to force employees to protect their iPhones with passwords and that they can’t erase sensitive corporate data from remote locations if the device is stolen or lost. Additionally, they say the iPhone doesn’t support the software many businesses use and that it only works on one cellular carrier’s network.
But keeping the iPhone out of the office may be a losing battle. As a result, some technology experts say the iPhone could usher in a change in the way businesses adopt new technologies.
Shifting Landscape
Whereas software vendors and other tech suppliers traditionally pitched their products to high-ranking executives and IT managers, some are now paying closer attention to the technologies workers actually use. Some vendors say that if employees make clear that they are going to embrace a particular device — with or without their IT department’s approval — then they will develop compatible products for it. Otherwise, they risk losing business to rivals.
“It’s clear to us that power is shifting to the users” and away from IT departments, says Mike de la Cruz, a vice president at business-software maker SAP AG. “So we’ve changed our strategy to focus on the users.”
SAP, of Germany, says it is developing a version of its customer-management software for the iPhone that will let salespeople access information about leads and customers, partly because its own salespeople prefer the iPhone. International Business Machines Corp. of Armonk, N.Y., is developing a version of its Lotus email and collaboration software for iPhone users, and salesforce.com Inc., of San Francisco, and Sun Microsystems Inc., of Santa Clara, Calif., are among other companies tailoring software for Apple’s device.
Some vendors are designing applications aimed at making the iPhone more business-friendly. Sybase Inc., for example, released an iPhone version of its software for forwarding corporate email and other data to mobile devices. Sybase’s software is installed and managed centrally, so it gives IT departments some measure of control over what end users are doing. Overwhelming demand from managers and executives at customer companies led Sybase to create the iPhone-tailored software, according to Senthil Krishnapillai, a director of project management at the Dublin, Calif., company.
Apple and its iPhone partner, AT&T Inc., are trying to make the iPhone more business-friendly, too. In January, AT&T began to allow iPhone purchases by corporate-account holders. Previously, the telephone company would bill iPhone charges only to individuals, and they would have to seek reimbursement from their companies. “We saw business customers clamoring for the iPhone” and wanted to make it easier for them to use the device, says an AT&T spokesperson.
Apple, of Cupertino, Calif., said earlier this month that it plans to release new iPhone software in June that will allow IT departments to integrate the device with Microsoft Corp.’s email, calendar and contact-management software. The new software also will allow iPhones to connect to a corporate network in a secure fashion and give IT staffs the ability to erase data on a lost or stolen iPhone from a remote location.
Simon Yates, an analyst at Forrester Research Inc., says these moves address the biggest concerns that IT departments have about the iPhone. Another research company, Gartner Inc., said the announced changes would make the iPhone appropriate for business use.
Harboring Doubts
Despite the steps to make the iPhone more business-friendly, some chief information officers continue to harbor doubts. David O’Berry, who heads IT for the South Carolina Department of Probation, Parole and Pardon Services, says his organization uses email software from Novell Inc., not Microsoft, so Apple’s changes won’t help him. In addition, even though Apple intends to set up a private section of its new App Store — the service through which people download applications for their iPhones — for business, Mr. O’Berry and other chief information officers don’t like the fact that they would have to go through Apple to distribute in-house software to employees. That means giving Apple access to their computer code, which some are reluctant to do.
Most people who use their iPhones for work don’t think about these technical challenges. What they see is a device capable of connecting to wireless Internet networks, with a full-fledged Web browser and a large screen that gives them access to the same Internet pages they can get on their personal computers and gives them the ability to play music and movies.
Michael King, a Gartner analyst, says that while other phones have browsers with similar features, their smaller screen sizes give them limited utility. He expects bigger screens to become more commonplace on smart phones soon.
When Mark Russell, vice president of sales and marketing at U-Line Corp., had to replace a damaged Nokia smart phone, he bought an iPhone. The phone’s “cool” factor was its main appeal, but he found that its Web browser allowed him to more easily locate distributors and get directions to meetings. He says that because he is an executive, his Milwaukee company agreed to support the device, using software from Visto Corp. that allows him to access email on the iPhone.
Productivity Boon?
Dale Frantz, chief information officer at Auto Warehousing Co., a Tacoma, Wash., company that inspects vehicles for auto makers, has been using an iPhone since the first week it was available. He is convinced that the iPhone’s Web browser can boost productivity.
Auto Warehousing’s systems — everything from email to the internal software used to inspect autos — can be accessed by any Internet-connected device with a Web browser, which typically meant a desktop or laptop computer.
But in February, while waiting for a flight in the Detroit airport, Mr. Frantz used his iPhone to check the system Auto Warehousing uses to track vehicle inspections. He found that several cars in the same plant all had scratches. He called the auto plant, where it turned out a worker on the assembly line was scratching the cars with his belt. Mr. Frantz says he wouldn’t have been able to catch and resolve the problem so quickly had he been using a different phone.
Still, Mr. Frantz isn’t convinced that the changes Apple announced this month to help businesspeople will have a big impact on his company, because Auto Warehousing uses Web-based software. He also has concerns about the plan requiring businesses to distribute software through the App Store.
Other technology executives aren’t convinced, either. Smart phones can contain a lot of valuable and confidential corporate information, and they can be so easily lost or stolen. BlackBerrys and other mobile devices designed for the corporate market have built-in software that enables the IT department to require employees to encrypt or password-protect the devices.
None of that may matter, however. As Beth Cannon, the San Francisco-based chief security officer for Thomas Weisel Partners Group, says: Even after she explains to people why her IT department can’t allow them to use the device, they “still want to use their iPhone.”
–Mr. Worthen, a staff reporter in The Wall Street Journal’s San Francisco bureau, writes the Journal’s Business Technology blog at WSJ.com/biztech.
