Apple Checks Another Enterprise Box with Deloitte

Apple today announced a partnership with Deloitte to work on several fronts in the enterprise. The comment below may be attributed to Jan Dawson, Chief Analyst, Jackdaw Research. Jan may also be reached at (408) 744-6244 or for further comment.

The reality is that Apple is not first and foremost an enterprise technology provider, but almost all big companies now have a fleet of iPhones somewhere in their business, and Apple wants to make sure those devices perform as well as possible and are integrated into the companies’ business processes. The Deloitte deal gets at how companies can make the most of the iOS devices they have and the employees who use them, because that’s something Apple isn’t able to help them with in depth. Whereas Apple can sell and support iOS devices itself for generic uses, Deloitte can provide much deeper expertise around horizontal business functions and for specific vertical industries than Apple ever could.

The Deloitte relationship builds on several previous partnerships Apple has announced with IBM, Cisco, and SAP. Each of these partnerships is part of a strategy by Apple to augment its own skill set in the enterprise with help from partners. IBM brought enterprise mobile application development and a big sales team, Cisco brought networking optimization, SAP brought massive reach through its back end software for business transactions, and now Deloitte brings business process transformation expertise.

Deloitte is an interesting choice, given that Apple’s existing partner IBM has many of the same skills in its Global Business Services unit. But I expect Apple wanted to broaden its partnerships and felt Deloitte had specific skills in relation to digital transformation which it wanted to leverage. Though Deloitte and IBM compete on the consulting front, none of the new areas Deloitte will partner on with Apple are competitive with the earlier deal with IBM. Interestingly, like IBM, Deloitte has a big base of iPhones internally – 100,000 iOS devices are in use in the company – so it’s arguably eating its own dog food here too.

Apple hasn’t talked a great deal publicly about the size of its enterprise business, but just under a year ago it said on an earnings call that its enterprise revenue was around $25 billion on an annualized basis, which was a little under 10% of its total revenue during that period, and had grown by 40% year on year. It’s easy to imagine that enterprise revenues are around 10% of Apple’s total revenues at this point, and growing faster than its consumer revenues, so this is an increasingly important area of Apple’s business, especially when it comes to driving growth.

What Apple has to ensure moving forward with each of these partnerships is that it actually gets the promised value out of them. These partners get a good PR boost from announcing high-profile partnerships with Apple, and doubtless get a lot of benefit from that. But the challenge with such partnerships is often making sure that customers really see the benefits, and that the anticipated revenues actually flow. Apple and its partners have talked on earnings calls and elsewhere about the apps and features they’ve built, but less about the financial benefits of these deals, so it’ll be worth watching out for more information about this on future earnings calls.

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