Why Apple’s $25 Billion Enterprise Business will Double in Five Years

While Speaking at the BOX customer conference this week, Apple CEO Tim Cook said, “If you look at the last 12 months, (enterprise sales were) $25 billion. This is not a hobby. This is a real business.”

Although I was not at this event, I am told by some who were there that the size of Apple’s enterprise business was a huge surprise to them. Their perception had been Apple is really a consumer company, not one focused on IT.

But this is not news to Apple’s competitors in the enterprise. They have been telling me for years Apple has been making serious inroads with IT directors and more and more Macs were being brought in “through the back door”. They have been forced to support Macs now in the same way they support Windows machines. And, for most enterprises, the iPad has become the tablet of choice in this market segment since it was launched in 2010. Apple is selling about 4 million Macs per quarter and we estimate at least 35-40% are going into the enterprise.

But there was another comment Tim Cook made that was perhaps even more interesting. “We’re in the early days of what we can do,” Cook said. “My gosh, we haven’t started yet.” This is a correct assessment by Cook about their enterprise business and one that should scare competitors. Apple does not have a dedicated sales force, support division or even a structured organization focused on the enterprise, yet they had $25 billion in sales to this business audience.

Cook’s comments suggest to me that, besides creating more products for the enterprise, they will hire more sales and support staff and perhaps create an enterprise solutions team to formally go after the enterprise over the next five years. In that sense, Apple has not even started their real enterprise push and yet, they are making billions of dollars in sales to these business customers.

BTW, if this does happen, this would be another break from the Steve Jobs legacy at Apple by Tim Cook. Jobs pretty much pushed back on creating a dedicated effort targeting the enterprise. I suspect he was really put off by the two Apple CEO’s before him that went after the enterprise in various ways and totally failed in their attempts. He was especially appalled at Michael Spindler’s move to make the Mac look like a PC and license the Mac OS so it would become integrated into the business market faster. But I think Jobs was much more interested in capturing consumer audiences and just did not give their teams the support and dollars needed to make the enterprise a major emphasis. But now under Cook, it is clear enterprise is a targeted audience Apple will be more aggressive with in the future.

It also reinforces the role the iPad Pro will play in making a more aggressive move into this lucrative business user base. It is not a coincidence IBM ported their mobile applications to iOS, not Mac OS. And with Microsoft delivering the full Windows Office toolset for the iPad, the same fundamental tools used on PCs is fully available on the Mac OS and the iPad, making Apple’s devices a stronger alternative to Windows machines that have dominated the enterprise for three decades. As I mentioned in other columns, I also think a big part of this enterprise strategy revolves around iOS instead of the Mac. Yes, the Mac will still be an important tool for business users but it could be pushed more towards the power and professional users such as graphics designers, engineers, media creators, etc. But as Cook has said, you can do about 80% of what a person will do on a PC with an iPad Pro and it, along with perhaps iOS-based MacBooks and other hardware, supporting iOS could be where they get the greatest traction in their quest to extend their role in IT.

While Apple has quietly made these inroads into the enterprise, I believe Apple’s build out of an enterprise class sales, support and solutions consulting group, should that happen, would give them the framework to start making a much more formal push for the adoption of Macs, iPads and iPhones into the enterprise. It would also most likely spawn their first serious ad campaigns just targeting the enterprise crowd by 2017. That is why I think they could double their enterprise sales within five years and, if they put the full Apple mindset on creating new products for IT and do a strong marketing push to IT programs, their sales to enterprise customers could be even higher.

Published by

Tim Bajarin

Tim Bajarin is the President of Creative Strategies, Inc. He is recognized as one of the leading industry consultants, analysts and futurists covering the field of personal computers and consumer technology. Mr. Bajarin has been with Creative Strategies since 1981 and has served as a consultant to most of the leading hardware and software vendors in the industry including IBM, Apple, Xerox, Compaq, Dell, AT&T, Microsoft, Polaroid, Lotus, Epson, Toshiba and numerous others.

3 thoughts on “Why Apple’s $25 Billion Enterprise Business will Double in Five Years”

  1. I’m hoping that Apple will devise a means to allow the iPad Pro to become a super-powerful control surface for a Mac.

    I love my iPad as a couch-based tool for info consumption, but a powerful touch device I could map to software on the Mac would be killer. Whether ‘enterprise’ would buy a large iPad for that purpose I don’t know, and I don’t care. I want one.

  2. One important thing to keep in mind is that disruption theory cautions against being beholden to large important customers. Listening too much to these customers and making sure that you satisfy their needs is, as the theory suggest, one of the main reasons why incumbents fail to respond to disruptive innovations.

    Apple tends to dictate their own way forward without being tied to legacy standards and protocols. This is in direct opposition to what is common in corporate IT, where legacy apps from decades ago still persist. Let’s imagine for the sake of argument, a world where corporate IT had invested heavily in Flash. If Apple had huge sales team for corporate customers, the sales division would surely be against ditching Flash. Under these circumstances, would Apple have been as willing as they were to throw support away?

    Listening to customers is a good idea when you have a product that is disruptive and moving forward. It is less so when you are facing disruption from others, and you have to satisfy both your old customers while disrupting the very products that you are selling to them. Apple has managed by periodically screwing their old customers by removing legacy expansion ports, temporarily killing pro-software, and removing support for things like Flash.

    My hope is that Apple remains very cautious about expanding their sales force and “thinks different” about how to approach corporate IT. Although a sales force may be important, and even essential, a huge sales team is likely to change the culture at Apple, and that is potentially toxic.

Leave a Reply

Your email address will not be published. Required fields are marked *