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Tim Green

SAP Deal Takes Apple Deeper into the Enterprise

by Tim Green | Dun & Bradstreet Editor

May 11, 2016 | No Comments »

Apple is chipping away at the enterprise market.

Its customers have infiltrated corporate systems with their own iPhones and iPads by way of their employers’ bring-your-own-device (BYOD) policies.

Apple itself is going top-down, arranging partnerships with major developers of enterprise technologies: IBM, Cisco Systems, and, last week, SAP.

Under these arrangements, Apple and its partners develop apps from the ground up that allow Apple’s mobile operating system, iOS, to work seamlessly with its partners’ systems. These native applications make better use of the strengths of the enterprise programs. Basically, it’s the difference between an off-the-rack jacket and one that’s custom-made.

Apple has become one of the biggest and most valuable companies by focusing on selling technology to consumers around the world. Now it seeks to make a bigger mark in the corporate market where most of its competitors make most of their sales.

Tim Cook, Apple CEO, addressed the enterprise market in the company’s earnings call with investment analysts in October 2015. He said the company estimates that enterprise sales accounted for $25 billion of Apple’s annual revenue and that they had grown 40% from the previous year.

That $25 billion would be a pretty good business for most companies (SAP’s 2015 revenue was $22.7 billion, total). For Apple, it was just about 10% of its 2015 revenue of $234 billion. But, Cook said, enterprise sales represent a “major growth vector.”

Apple would take a shine to a growth vector, major or minor. In April, Apple reported its first quarterly drop in iPhone sales and iPad sales continued their falloff. The company has introduced iPad models with bigger displays that are geared to business use, but it hasn’t seen a sales bump from them.

Enterprise sales could boost the sales of Apple devices, or at least slow their decline.

Since it was announced in August 2014, the IBM-Apple partnership has produced more than 100 IBM applications designed for 14 industries and 65 professions including health care, electronics, finance, retail, travel and transportation, and utilities. Besides business apps, IBM and Apple have combined to pair IBM’s Health Cloud and Watson cognitive computing capabilities with health data entered by customers in iOS apps using Apple’s ResearchKit and HealthKit frameworks. The deals offers medical researchers a secure, open-data storage service and access to IBM’s data analytics capabilities.

For its part, IBM has said that it has generated more than $1 billion in signings from the iOS app program. IBM reported about $82 billion in revenue for 2015.

The SAP deal offers Apple another big market to exploit.

SAP’s enterprise resource planning (ERP) software is used by many companies to help run operations. SAP said it has some 310,000 business and public sector organizations as customers. The company also supplies software for handling other corporate processes such as expenses, personnel, customer relationships, and more.

The apps will be built for the SAP HANA platform, which is a large relational database that provides real-time information. The companies will make a software developers kit (SDK) available to SAP’s 2.5 million developers. The apps will use Apple’s Swift programming language.

The companies said the native apps would provide users access to core data and business processes on SAP S/4HANA and use iOS features like Touch ID, location-based services, and notifications.

Apple, IBM, and SAP are on the right track in developing mobile apps. The Gartner research firm forecasts that market demand for mobile app development services will grow at least five times faster than internal IT organizations’ capacity to deliver them by the end of 2017.

Tim Green has covered business, technology, and science at newspapers and in higher education. At Hoover’s he covers computers and telecommunications. Follow him on Twitter.


Image by Matias Cruz

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