When Alaska Airlines started distributing iPads to its pilots last year, the company also gave them $10 iTunes gift cards.
The company wasn’t just being nice. Alaska wanted its pilots to buy specific apps they’d need in the cockpit—but the App Store offered no good way to purchase and distribute such apps in bulk. Without the gift cards, pilots would have had to buy the apps on their own and bill the airline for reimbursement.
“There was no nimble way to do this,” says Jim Freeman, a captain with the airline.
So Freeman was relieved last summer when Apple unveiled its Volume Purchase for Business program (also known as VPP): Essentially, it’s an App Store specifically for businesses, where they can purchase iOS apps in bulk. It allows developers to custom-tailor software for specific businesses; it also gives Apple another entry into the business market.
“We’ve been hoping something like this would occur for quite awhile,” Alaska’s Freeman says.
Not just an App Store
The new program has drawn praise from both business customers and the app developers who want to serve them. Those developers say that, while the App Store was a revelation in the consumer technology business, it was a bad fit for organizations using iPhones and iPads in the workplace.
Chris Kiley, a senior manager for Jeppesen—which makes flight chart apps for airlines—says, “The consumer App Store is the consumer App Store. It doesn’t provide us the ability to support our customers the way they need.”
VPP changes that. Here is how it works: Businesses create a single Apple ID to manage their purchases. Using that account—which needs to be linked to a corporate credit card or purchasing card—organizations can search for apps and then buy them in bulk.
Once the purchases have been made, Apple issues the company a list of redemption codes for the app. Whoever is managing app distribution for the company can email those codes to employees, allowing them to download the app just by following a link on their Mac, PC, or iOS device. The management interface is updated as users redeem the apps, keeping track of which codes are still available, as well as retaining a full purchase history.
Developers say Apple sets a minimum price of $10 per app, but after that they’re free to offer custom prices, features, and services to specific customers.
VPP’s reach so far is difficult to discern. Apple doesn’t break out corporate sales in its financials; the company didn’t comment for this story. The companies that Macworld talked to about the program say they’ve only dipped their toes into the program, though they’re enthusiastic about the possibilities.
“Users don’t have to go out and buy and app and get reimbursed,” says Mark Jordan, senior product manager for Sybase; that company’s Afaria software helps IT departments distribute mobile software. “Now IT departments can go out, buy 100 licenses, and just apply them.”
The other benefit: Organizations can purchase custom business-to-business (B2B) apps from third-party developers without exposing those apps to the consumer public on the App Store.
That’s “the unheralded thing about the program,” says Stuart Williams, founder of app developer Pervasent. “It’s custom enterprise apps delivered, not through the App Store, but kind of next to it.”
“It allows developers to have more enterprised-focused programs without going on the public App Store,” Sybase’s Jordan says. “A lot of enterprises don’t want to have that app on the public App Store. It can be specific for that enterprise.”
Alaska Airlines’ Freeman says that customized apps give businesses an element of quality control: Updates to an app happen only when the IT department approves it. That removes the risk that a pilot will find himself in the air, suddenly unable to use a chart made for a previous version of the app.
“In a perfect world,” Freeman says, “all of our apps would be internal, just to give us operational security, to never face an app suddenly not working.”
VPP does have its limitations. Jeppesen’s Kiley and Pervasent’s Williams say they hope Apple will soon open VPP to customers beyond the United States.
“We have a global customer base,” Kiley says. “Expanding the program is going to be important to support our business.”
For years, Apple has famously focused on the consumer end of the market. But as more and more of those consumers bring their iPhones and iPads to work, IT departments are increasingly needing to take advantage of those devices; VPP gives Apple a way to help with that and thereby make inroads into the enterprise market.
“For a long time IT has acted as a gatekeeper; not everybody is comfortable with the trend toward the consumerization” of IT, says Carl Howe, research director for Yankee Group. “What a lot of businesses have discovered is that an awful lot of consumer technology is easier, cheaper to buy, and suits their needs. Apple’s (VPP) program simply recognizes, ‘Hey, let’s not make it any harder than it needs to be for these guys.’”
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