Unlike Tim Cook, Steve Jobs was never that crazy about going the extra mile to convince large enterprises to buy Apple Inc.'s (AAPL) wares. If one came calling, Apple certainly wouldn't turn down their money, but the company generally didn't make winning over Global 2000 firms and large institutions a priority.
A lot of this has to do with the fact that Jobs was a product guy at heart, and as he bitterly learned during the Mac-PC wars of the '80s, winning over corporate buyers is never just about offering a superior product. There's a reason why most enterprise software firms -- even fairly innovative ones -- spend far more on sales and marketing than they do on R&D. Or why IT giants such as IBM Corp. (IBM) , Microsoft Corp. (MSFT) and Cisco Systems Inc. (CSCO) hold major conferences specifically for resellers and other business partners.
Having an army of salespeople hawking your company's products matters a lot. As does having an army of consultants ready to help companies implement them. In addition, to the extent that implementations vary for clients within one industry compared with another, having salespeople and consultants with industry-specific expertise matters a lot too. And if you don't have enough of these people internally, it's important to find partners who do.
It's for these reasons that Apple's new partnership with consulting/outsourcing giant Accenture Plc (ACN) is one of the company's biggest since its landmark 2014 deal with IBM. Adding the resources of a firm that claims over 9,000 tech consultants operating in 40 industries, and which is forecast by analysts to do $18.7 billion in consulting revenue (tech or otherwise) this fiscal year, should pave the way for a lot of deals that couldn't be pulled off by simply arranging for CIOs and IT admins to visit a local Apple Store.
The deal calls for Accenture to create a practice within its Digital Studios unit -- it helps clients develop apps and digital services, and has been bolstered by a string of acquisitions -- dedicated specifically to working on iOS projects. As part of the effort, Apple will place employees at Accenture studios, and the companies will develop a set of iOS-specific tools and services to assist with projects. These include services meant to help iOS devices connect to back-end systems, transition legacy apps and their data to iOS and allow iOS apps to take in data from IoT devices.
Forrester analyst Ted Schadler observes having Apple employees work directly with Accenture will grow the company's understanding of what enterprise clients need, which in turn could help it launch useful business-focused iOS features and services down the line. He also argues process and platform engineering is usually the toughest and most expensive part of the IDEA cycle (implement/design/engineer/analyze) for corporate mobile projects, and that Accenture is well-versed in handling it.
This is arguably Apple's fifth big enterprise partnership. The other four:
- The 2014 deal with IBM. It resulted in IBM developing dozens of industry-specific iOS apps, as well as having its giant salesforce resell Apple hardware. It also yielded IBM app design and deployment services focused on iOS, and AppleCare services meant specifically for enterprise hardware deployments.
- A 2015 partnership with Cisco to create a "fast lane" for mission-critical iOS apps on enterprise networks relying on Cisco gear. The deal also involves integrating the iPhone's communications services with those of Cisco's conferencing hardware and apps, and was recently expanded to cover the creation of a Cisco solution (known as Security Connector) declared to give companies "the deepest visibility, control and privacy for iOS devices."
- A 2016 alliance with SAP SE (SAP) through which the German software giant agreed to create iOS apps for "critical business operations," and launch a software development kit (SDK) for iOS apps that leverages its Hana Cloud Platform (a platform for creating apps that rely on SAP's Hana in-memory database). SAP also vowed to create a new iOS app design language meant to provide "consumer-grade" user experiences for business apps.
- A 2016 deal with Accenture/IBM rival Deloitte to build an "Apple practice" for Deloitte's 5,000-plus tech consultants. The companies also teamed to launch a service (called EnterpriseNext) meant to help companies build industry-specific iOS solutions.
In September 2015, Cook disclosed Apple had produced $25 billion in revenue during the trailing 12 months, a figure equal to over 10% of the company's fiscal 2015 revenue. The figure might be meaningfully higher now thanks in part to Apple's various alliances, as well as the company's efforts to bake security and management features sought by enterprises into iOS and macOS.
A strong iOS enterprise app ecosystem -- bolstered by the IBM and SAP deals, as well as Apple's outreaches to other business app developers -- also doesn't hurt. And it's hard to overlook the impact of the bring-your-own-device (BYOD) trend in making businesses comfortable supporting iPhones, iPads and Macs on their networks, which in turn could pave the way for deployments in which those businesses, rather than their employees, are the ones footing the bill.
CFO Luca Maestri has made a habit of citing stats pointing to strong enterprise usage of, and satisfaction with, iOS devices during earnings calls. On Apple's June quarter call, he noted industry research shows a 94% iPhone satisfaction rate among corporate smartphone users, and that 78% of corporate buyers looking to buy a phone in the September quarter plan to get an iPhone. Apple's strong position with more affluent consumers is clearly a factor here.
Nonetheless, there are still some challenges that Apple faces as it tries to further grow its enterprise reach. Many corporations still prefer to standardize on Windows systems for their internal PC deployments, even if they're now comfortable with employees bringing their own MacBooks to work. And the premium prices attached to Apple's desktops and notebooks can remain a deterrent. In addition, while the iPad Pro has gained a following with creative pros and certain other professionals, Apple's attempts to sell companies (and consumers) on its tablets as notebook replacements have made limited headway.
But for all the lingering challenges Apple faces, reports of major enterprise Apple hardware deployments grow by the month. Bank of America, Shell, Volkswagen, Medtronic and Capital One are some of the customer wins Apple has recently been eager to tout. The company's large stable of partnerships with IT giants guarantees there will be more such deals to boast of on upcoming earnings calls.
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