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Apple woos businesses despite security worries

Apple, known for courting consumers with sleek designs and easy-to-use software, is making inroads with corporations that say the iPad can make workers more productive without putting sensitive customer information at risk.
Image: Bernie Moreno using the iPad
/ Source: Business Week

Wells Fargo spent two years studying the iPhone before letting bankers use the device at work. Apple's iPad, released in April, took just weeks to get cleared.

This time around, safeguards against security breaches are stronger from the start, according to Megan Minich, a senior vice-president at the San Francisco-based bank. Her colleagues used two of the first shipment of 15 iPads to demonstrate financial products at an investor conference in May. More are on the way, Minich says. "We've got a bunch ordered that we can't get yet," she says in an interview.

Apple, known for courting consumers with sleek designs and easy-to-use software, is making inroads with corporations that say the iPad can make workers more productive without putting sensitive customer information at risk. SAP, Tellabs, and Daimler's Mercedes-Benz are using the tablet-style computer for tasks as varied as accessing work e-mail, approving shipping orders, and calling up on-the-spot auto-finance options.

Apple Chief Executive Officer Steve Jobs announced the iPad in January, touting its ability to deliver games, video, music, Web access, and digital versions of books and magazines. Yet companies say it's widely applicable at work, too. "This iPad thing has taken the world by storm," says Ted Schadler, vice-president and principal analyst at Forrester Research and author of Empowered, which explores how employees use new technologies. "It came in as a consumer product and very quickly the people who actually bought them were businesspeople."

Business "experimentation"
Last month, Apple said it sold 3 million iPads within 80 days of its release. The company may sell 9.7 million iPads in 2010, says Shaw Wu, an analyst at Kaufman Brothers in San Francisco. More than half—52 percent— of 770 smartphone users surveyed by Zogby International said they would most likely use a tablet device like the iPad to do work. The study, commissioned by Sybase, was released Mar. 23. "A lot of businesses right now are in experimentation with these devices," says Dan Shey, practice director for enterprise at ABI Research, which is based in Oyster Bay, N.Y.

Many companies may keep their distance from tablet-style computers, which boast smaller screens and won't let businesspeople switch back and forth between tasks as quickly as bigger machines. Apple rivals including Hewlett-Packard and Cisco Systems are getting into tablets, too — so the iPad maker's lead may narrow.

For now, workplace adoption of the iPad stands to benefit Apple while undermining rival makers of computers that run Microsoft's Windows operating system. Many companies initially chafed at letting employees use iPhones for business amid concerns that it may not keep corporate data secure. That resistance ebbed after Apple in 2008 released a version of iPhone software with beefed-up security and better support for corporate e-mail. Similarly, a growing number of companies have begun letting employees use Apple's Macintosh computers in addition to, or in place of, Windows-based PCs. Apple spokesman Simon Pope declined to comment, referring instead to remarks by Jobs, who said on May 31 that "customers around the world are experiencing the magic of iPad."

With their smaller screens, inability to multitask, and lack of keyboards, tablets may not soon replace bigger computers for many work-related tasks. The iPad's display, for example, is 9.7 inches (25 centimeters). By 2015, less than one-fourth of personal computers sold will be tablet-style, Forrester says.

Competition's coming
As popular as the iPad may be for businesses now, it may soon face competition from rivals including Hewlett-Packard, Dell, LG Electronics, and Samsung Electronics, which plan their own tablet computers. Cisco said on June 29 it too will release a tablet that will be able to handle high-definition videoconferencing and may be available in early 2011.

Some companies may also be reluctant to entrust their data to the iPad after a breach on the AT&T website revealed the e-mail addresses of as many as 114,000 iPad users. Apple takes pains to keep its products secure in part by carefully vetting the applications that can be downloaded onto it. Still, the process is "not foolproof, it will be subverted eventually," says Mikko Hyppönen, chief research officer of Helsinki-based security firm F-Secure.

Reservations aside, Wells Fargo saw early on how quickly the iPad might take hold among business clients the weekend the device was released. Finance executives of large companies—those that generate more than $50 million in revenue—accessed corporate Wells Fargo accounts with iPads, says Amy Johnson, a Wells Fargo vice-president who works on the company's online portal and mobile strategy. A finance official or account representative could use a mobile device like the iPad to approve multimillion-dollar wire transfers, she explains.

Johnson used one of the iPads bought by Wells Fargo to demonstrate financial products during a May 13-14 conference. She says she now carries the iPad with her everywhere.

In photos: Best-selling business apps for the iPad

Versatile tool
The same goes for Rob Enslin, North America president at SAP, the world's largest maker of business-management software. Enslin says that when he travels, the only device he carries besides a Research In Motion BlackBerry is the iPad. "It's allowed me to almost run a paperless office," says Enslin, who uses it to access business applications, briefing documents, customer information, and other data.

SAP, based in Walldorf, Germany, also works with clients to put its products on mobile devices including the iPad. Tellabs, for instance, collaborated with SAP and Sybase on an iPad application that lets managers more quickly approve shipping of customer orders. "We also have three or four different applications lined up behind this that will help us with better inventory control," says Jean Holley, chief information officer at Tellabs, based in Naperville, Ill.

Other companies using the iPad at work include Daimler's Mercedes-Benz. Sales representatives in 40 U.S. dealerships in late May began using iPads on showroom floors to order on-the-spot financing options for customers, says Andreas Hinrichs, vice-president of marketing at Mercedes-Benz Financial. In October, Mercedes-Benz had released an application for the iPhone that lets customers manage accounts and make payments. Up to now, customers have made $5 million in car payments through the application, Hinrichs says. The company now is considering doling out iPads to all of its 350 U.S. dealerships.

At Wells Fargo, Minich is waiting for an iPad after her boss made off with the one she expected to be assigned to her.