Cool Niche or Warm Touch?

“On March 6 Apple announced new features for the iPhone, including some that will make it possible for people to fetch Microsoft Exchange e-mail with this device. In the overhyped, ever-breathless world of Silicon Valley this routine announcement got the kind of reception you might expect for the discovery of life on Mars. Apple is invading corporate America! Game over!

“Or maybe not. Apple has done a great job selling the iPhone to consumers, but tapping into the corporate market will take more than just supporting Microsoft e-mail and adding a few security features...

“The way to get corporate business is to create a product so appealing that people begin using it at work even though it's forbidden; then they force their IT department to accommodate them...

“However... hurdles stand in Apple's way. Research In Motion has 14 million BlackBerry subscribers worldwide, about two-thirds of them in corporate accounts. Those companies won't be in a hurry to tear out their BlackBerry systems, nor will they be eager to support two systems instead of one, no matter how sexy that new device may be...

“Businesses also value close relationships with vendors. ‘RIM has had a direct sales force meeting with Global 2000 companies for years,’ says Robert Laikin, chief executive of Brightpoint... ‘They have a reputation for security and a track record. They have deals with all the major carriers in the United States, who have trained their sales forces to sell the RIM product.’

“Apple, in contrast, has some really cool ads, snazzy stores and an exclusive deal with AT&T, which could put off enterprise customers who prefer a choice of carriers...

“Apple also has a history of creating new products that are not compatible with their predecessors, something consumers might put up with but businesses can't tolerate. It also helps explain why Apple computers are so rarely used at corporate sites despite being better in almost every way than Windows PCs...

“‘We think the iPhone will continue to appeal to a niche willing to pay for the sizzle of leading-edge technologies,’ says Sean Magee, senior vice president of information technology at Ricoh Americas Corp. ‘While the touchscreen, overall presentation, data management and navigation are cool, at the end of the day it is just an overpriced PDA with a lot of challenges in front of it.’”

(“Tough Customers; The earth shook. Mountains trembled. The world momentarily stopped turning on its axis.” Daniel Lyons. Forbes; April 7, 2008, Volume 181 Issue 7. pg. 54)

GOOGLE APS TOO, in spite of their cool tech and public sizzle, largely are not penetrating the corporate world.

The utility of an old-fashioned, well-entrenched behemoth -- technically inferior though it may be -- often trumps the latest fashion. Until the behemoth gets that idea too far into their head for too long. Then, watch out!