Apple's Corporate Transformation: From Consumer Darling to Enterprise Powerhouse

Back in 2010, Apple’s legendary co-founder Steve Jobs wasn’t exactly excited about the corporate sector. In fact, he famously remarked, “What I love about the consumer market, that I always hated about the enterprise market, is that we come up with a product, we try to tell everybody about it, and every person votes for themselves.”

He went on, “They go ‘yes’ or ‘no,’ and if enough of them say ‘yes,’ we get to come to work tomorrow. That’s how it works.”

At the time, that was a fair description of the corporate landscape. IT departments tightly controlled what employees used, issuing devices like BlackBerries and ThinkPads (and you could have any color you wanted — as long as it was black). Jobs, who died in 2011, didn’t live long enough to witness the “Bring Your Own Device” (BYOD) and “Consumerization of IT” movements, two trends that were just beginning to emerge on the business horizon when he passed away.

I suspect he would have embraced both trends and taken great satisfaction in the fact that, in many ways, they were driven by his own company’s mobile devices, the iPhone and iPad. People used these gadgets at home and increasingly brought them to the office. IT had little choice but to start accommodating them.

That shift has fueled Apple’s evolution in the enterprise sphere. Over time, Apple has formed alliances with established enterprise players like IBM, SAP, and Cisco. It has supplied tools for IT to better manage those i-devices and Macs, and it has built a substantial enterprise business (as far as we can tell).

What do we have here?

Finding data on the size of Apple’s enterprise business is tricky because the company rarely breaks out enterprise revenue in earnings calls. However, to give a sense of the market, Tim Cook did reveal a figure during the Q4 2015 earnings call.

“We estimate that enterprise markets accounted for about $25 billion in annual Apple revenue in the last 12 months, up 40 percent over the prior year and they represent a major growth vector for the future,” Cook said at that time.

In a June 2017 Bloomberg interview, Cook didn’t provide numbers but called the enterprise “the mother of all opportunities.” That’s because enterprises tend to buy in bulk, and as they build an Apple support system internally, it feeds other parts of the enterprise market as companies purchase Macs to develop custom apps for both internal users and consumers of their products and services.

Cook saw this connection clearly in the Bloomberg interview. “For most enterprises, iOS is the preferred mobile operating system. IOS is a fantastic platform because of the ease with which you can write apps that are great for helping you run your business efficiently or interface with your customers directly. We see many, many enterprises now writing apps. Well, what do they use to write the apps? They use the Mac. The Mac is the development platform for iOS,” Cook told Bloomberg.

Photo: Justin Sullivan/Getty Images

Another way to gauge the market is to look at Jamf, an Apple enterprise tool partner that helps organizations manage Apple devices in large settings. The company, founded in 2002 long before the iPad or iPhone, has been growing rapidly. It reports having 13,000 customers today. To put that into perspective, it took 13 years to reach 6,000 customers and just 2.5 years to more than double to 13,000.

“A lot of people say Apple is getting more focused on enterprise, but I believe Apple helped enterprise focus more on users and they’ve had more success,” Jamf CEO Dean Hager told TechCrunch. “It started with Apple creating great products people wanted to bring to work and then they just demanded it,” he said.

Forcing their way into the enterprise

That organic momentum shouldn’t be underestimated, but once Apple got a foothold, it had to give IT something to work with. IT has always seen itself as the hardware and software gatekeeper, protecting the enterprise from external security threats.

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Ultimately, Apple never set out to build enterprise-grade devices with the iPhone and iPad. They simply wanted devices that worked better than anything else available at the time. That people loved using them so much they brought them to work was an extension of that goal.

In fact, Susan Prescott, vice president of markets, apps and services at Apple, was at the company when the first iPhone launched, and she understood the company’s objectives. “With iPhone, we set out to completely rethink mobile, to enable the things we knew that people wanted to do, including at work,” she said.

Susan Prescott of Apple. Photo: Justin Sullivan/Getty Images

The concept of apps and the App Store, along with bringing in developers of all types to build them, also appealed to enterprises. When IBM and SAP got involved, they started building apps specifically for enterprise customers. Customers could access these apps from a vetted App Store, which also attracted IT. The Cisco deal gave IT faster onboarding of Apple devices on networks running Cisco equipment (which most enterprises use).

At the 2010 iPhone 4 keynote, Jobs was already highlighting features that would appeal to enterprise IT, including mobile device management, wireless app distribution through the App Store, and even support for Microsoft Exchange Server, the popular corporate email solution of the time.

He may have spoken dismissively about the enterprise in a general sense, but he clearly saw the potential of his company’s devices to transform how people worked by giving them access to tools and technologies that were previously out of reach for the average worker.

Apple was also quietly talking to enterprises behind the scenes and figuring out what they needed from the earliest days of the iPhone. “Early on we engaged with businesses and IT to understand their needs, and have added enterprise features with every major software release,” Prescott told TechCrunch.

Driving transformation

One factor driving change inside organizations was that mobile and cloud were converging around 2011, spurring business transformation and empowering workers. If IT wouldn’t give employees the tools they wanted, the App Store and similar platforms gave them the power to do it themselves. That fueled the BYOD and Consumerization of IT movements, but eventually IT still needed some degree of control, even if it wasn’t the same level as before.

The iPhone and other mobile devices created the mobile worker, who operated outside the firewall’s protection. People could suddenly view documents while waiting for the train, update CRM tools between client meetings, or call a car to get to the airport. All of this was made possible by the mobile-cloud connection.

It also caused a profound shift inside every business. You simply couldn’t do business the same way anymore. You had to produce quality mobile apps and get them in front of your customers. It was changing how companies operate.

That was certainly something Capital One recognized. They realized they couldn’t remain a “stodgy bank” anymore, controlling every aspect of the computing stack. If they wanted to attract talent, they had to open up, which meant allowing developers to work on the tools they wanted. According to Scott Totman, head of Mobile, Web, eCommerce, and personal assistants at Capital One, that meant enabling users to use Apple devices for work, whether their own or company-issued.

Workers at Capital One. Photo: Capital One/Apple.

“When I came in [five years ago], the Apple support group was a guy named Travis. We weren’t using Apple [extensively] in the enterprise, [back then],” he says. Today, they have dozens of people supporting more than 40,000 devices.

It wasn’t just internal needs that were changing. Consumer expectations were also shifting, and the customer-facing mobile tools the company created had to meet those expectations. That meant attracting app developers to the enterprise and giving them an environment where they felt comfortable working. Clearly, Capital One has succeeded, and they have found ways to accommodate and support that level of Apple product usage throughout the organization.

Getting by with a little help

Capital One wasn’t an outlier, but if Apple was, at its core, still a consumer company, it would need help to capture the enterprise market and understand the needs of a large organization. That’s why it made a series of moves over the last several years to partner with enterprise bedrock companies, forging agreements with IBM, SAP and Cisco, with professional services giants like Accenture and Deloitte and, most recently, GE. The latter gives the company a foothold in the industrial Internet of Things market. Meanwhile, GE has committed to standardizing on the iPhone and iPad for its 300,000+ employees, while also making the Mac an official computer offering.

Patrick Moorhead, president and principal analyst at Moor Insights & Strategy, sees partnering as a smart approach for Apple. “Apple knows it’s a consumer company and therefore needs to partner with pure enterprise players to execute its enterprise strategy. Each company adds a different element to the strategy. IBM and SAP are mobile app plays. Cisco is about accelerated networking and edge security. GE is all about IoT software,” Moorhead explained.

Jack Gold, president and principal analyst at J Gold Associates, says these companies provide a primary entrée into the enterprise for Apple. “They aren’t really a component supplier as much as a solutions provider, and without the partnerships, it would be much harder for them to have an impact. The leveraging of partnerships allows them to compete at the full solutions level rather than have to compete on a component basis,” Gold said.

The IT jury is still out

While Apple spent the last decade building up that enterprise business, along with internal and external support components, the partnerships they built didn’t just give them enterprise credibility; they also often provided a level of coverage that would have been more difficult to deliver on their own.

“IT is very accustomed to having a good deal of support as an ability to work directly with major suppliers. In Apple’s case, the really big companies can do so, but many have to go through an intermediary. That’s not necessarily bad, but it is a way for Apple to leverage its more limited enterprise resources,” Gold said.

Ray Wang, founder and principal analyst at Constellation Research, sees some challenges for Apple enterprise customers. ”Their challenge with Apple is that companies such as Dell have made it so easy to take care of their devices that Apple would have to replicate that level of service. Being told to go to a Genius Bar isn’t the right answer for most IT shops,” he said.

To be fair, Apple does have enterprise-level AppleCare support, which happens to be run by partner IBM. Prescott says that Apple is working with larger customers to give them what they need. “We work directly with customers to help them integrate and manage Apple devices. We offer technical support through AppleCare, and our Apple at Work website offers IT resources and guides. We strategically partner with world class companies to complement our enterprise efforts and help customers get started, all the way to rethinking business processes with mobile at the core,” she explained.

It’s worth noting that a survey conducted by Jamf in 2016 found a strong preference of 79 percent for iPhones among respondents when it came to mobile phones.

Source: Jamf 2016 survey

The survey included 480 executives, managers and IT professionals from small, medium and large organizations from around the world. The numbers suggest that IT has little choice but to support iPhones and other Apple products, and Apple has been finding ways to help them.

Apple has clearly made great strides in the enterprise since Steve Jobs made that comment in 2010. With companies like Capital One, Schneider, Lyft and British Airways, it has shown it can work with the largest companies around. Indeed, the partnerships with enterprise titans have further helped it find its place in the enterprise.

Featured Image: Justin Sullivan/Getty Images

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