At a Hewlett Packard event in late October, company suits showed off the latest HP tablet: the Slate 2. The second version of the Slate 500, HP's Slate 2 is a thick, Windows 7-based device targeting the enterprise that comes with a stylus and starts at $699. It might be hard for consumers to imagine buying this tablet over the best-selling iPad 2, which starts at just $499. But for many in the enterprise space, a Windows-based mobile device is almost required to integrate with Windows workplace IT solutions. Is the enterprise's dependence on Windows going to drive sales of Slates?
"Absolutely," said Mike Hockey, worldwide public relations manager for HP's $40 billion personal systems group. "What's happening here—and you can call it the iPad effect—is that you get a lot of people in the enterprise saying, 'Wow, we see the potential of tablets. Great. Now, how can I integrate that into my environment?' But all [their systems] are based on Windows. They have custom legacy apps that only work with, say, x86 Windows environments. So this [HP Slate] is the right product for them."
In other words, OEMs like HP are depending on outmoded Windows-based enterprise systems to drive sales of their hardware—and the strategy appears to be working. Windows PC and tablet manufacturers will sell $69 billion in hardware to enterprises this year, says Forrester Research. But Apple is catching up. Forrester estimates that Apple will sell $19 billion in Macs and iPads to enterprises in 2012, a 58% leap over last year. What's more, a new report out this week from IDG Connect found the iPad is dominating other tablets in the enterprise, indicating that HP can't depend on Windows forever.
According to the survey, 67% of professionals in the U.S. use their iPad at work, and 93% of professionals use their iPad for work communication. More telling is the 51% of IT decision-makers who always use their iPad at work and the 79% who always use the device on the road, figures that rocket even higher in other regions of the world. The point here is that despite the enterprise's traditional dependence on Windows, it appears businesses are becoming more and more open to finding solutions with Apple. That's why during a recent earnings call, Apple CEO Tim Cook boasted that 92% of Fortune 500 companies have either tested or deployed iPads—a remarkable feat, considering Steve Jobs never had much interest in the enterprise market.
But talking to representatives at HP's event in October, it would appear the company believes any "iPad effect" would only lead to more tablet interest in the enterprise market, and thus more inevitable interest in Windows-based tablets like the Slate 2.
"To be honest with you, we've had many customers look at [the iPad], but they're not necessarily looking for that whiz-bang experience," said Kyle Thornton, category manager for emerging products at HP. "Let me tell you, for a lot of customers, the Windows 7-based [Slate] performance is more than enough for what they're looking for. They're not looking for a quad-core processor ... Now, the CEO might get the iPad, but for the 500 or 2,000 [employee] deployment? They're not going to get iPads. They're going to get something like this [Slate 2]."
Added Hockey, "That's what the iPad has done. There's been a great awareness of tablets, and people saying, 'That's cool. How do I bring that into my business?' And, in some cases, it works. But in many other cases, there's a compatibility issue, because they're running their old [systems]. No one is going to rewrite software just for a new processor or a new OS."
"Our point is that it really meets business requirements," said Thornton. "In the medical field, for example, those guys have invested tens of millions of dollars in custom apps, more so on training and hardware. They're not going to go tomorrow to buy iPads to replace them. Even if their clients want it. Because they'd have to reinvest that money. It's very expensive."
The key point here: The enterprise can't have iPads "even if [they] want it." This mindset to some degree has helped HP, which is able to leverage the enterprise's addiction and dependence on Windows-based IT solutions to sell its own products. But the industry is shifting away from that mindset—a trend commonly referred to as the "consumerization of IT." It's a shift that's having as much of an impact on workplace productivity—many companies have implemented "Bring Your Own Device" programs—as it is on corporate hiring. A recent Cisco study found that allowing employees to bring whatever devices to work that they prefer—whether an iPad or Android tablet—can boost recruitment rates.
Yet according to HP's reps, the enterprise might think different than the consumer market—but not in favor of Apple.
"They think totally different than you and I would think," Thornton explained. "You and I might look at different devices on the market and go, 'Oh, obviously the iPad is the right choice for me,' But the enterprise doesn't think that way."
Well, the enterprise has begun to change its thinking. Perhaps they might take a gander at the TouchPad instead?