Apple made $25B from enterprise business in a year, Cook says

30 Sep 2015 | Author: | No comments yet »

Apple’s Tim Cook encourages corporate action to improve human rights.

Today at its BoxWorks event, Box CEO and co-founder Aaron Levie sat down with Apple CEO Tim Cook to discuss enterprise technology and collaboration. Just 10 years ago, a little startup called Box premiered with the idea that it could make a business out of storing people’s documents on servers they don’t have to maintain, otherwise known as the cloud.Tim Cook has told a conference of business executives that American corporations have a responsibility to help improve equality, the environment and public education because of a lack of government progress in the past few decades.Businesses accounted for $25bn of Apple’s $200bn sales in the year to the end of June, but Mr Cook said the company was aiming to play a bigger role in the corporate IT industry. Although he leads a company that has been in heavy competition with Google and its Android OS for years now, Cook was surprisingly positive on Apple’s relationship with one of its former nemeses, Microsoft — especially when it comes to selling to business users. “Apple and Microsoft can partner on more things than we can compete on, and that is what the customer wants…Office on the Mac is a force,” Cook told the audience. “Partnering with Microsoft is great for our customers and that’s why we do it.” Cook’s comments underscore how much Apple has changed over the years that he has been leading it, and also how the company is playing by a different rulebook when it comes to enterprise. “I’m not a believer in holding grudges… life is short and you’ve got to have as many friends as you can have,” he continued. “I think we will deliver much better solutions working with major players and that’s what the customer wants.” That last comment prompted Levie to summon the audience to clap: “An applause for openness!” he exclaimed.

Now, Box BOX -0.40% is a public company that boasts over 40 million users and roughly 50,000 business customers, CEO Aaron Levie said on Tuesday at his company’s annual conference in San Francisco. The tech giant’s enterprise technology sales reached $25 billion for the twelve month period ending in June. “This is not a hobby,” Cook said on stage Tuesday at the annual conference hosted by cloud storage and work collaboration company Box. “This is a real business.” To be fair, $25 billion is just a fraction of the $200 billion in sales Cook projects Apple AAPL -3.04% will collect this year. In a sign of the determination to serve more corporate customers, he delivered the message at a third-party event, BoxWorks, run by the online collaboration service Box.

More generally, Cook emphasized Apple’s approach to enterprise services being more about creating products that work for both and then developing services that focus on the end user more specifically. BOX, -0.40% “It’s a very small amount compared to what the opportunity is.” Apple has pushed to get its products into the business world beyond its traditional base of consumers.

When you want to buy a smartphone, he said, “You don’t buy an enterprise smartphone.” Levie polled the audience, and by a landslide, attendees at the enterprise event were iOS users (perhaps because the Android devotees are busy doing something else this morning). It’s free,” said Cook. “Business has an important responsibility to society and that has grown markedly in the last couple of decades as government has found it more difficult to move forward and get as much done.

So you have to transform your business.” “When you look at the penetration of mobile in enterprise, it’s shocking how low it is, and then when you look at what people are doing with it, it’s shocking how many people haven’t gone beyond emails and browsing and these kinds of things,” he said. “I’m not sure anyone at this point that I’ve seen, including ourselves, deserves a really high grade compared to the opportunity that’s there.” Under Mr Cook, Apple has latterly been seeking to bury the hatchet with old industry foes to help it crack the enterprise market. Levie and other Box executives showed off new features, like an upgraded video player for businesses to share and watch videos, the ability for healthcare companies to share and edit medical images like X-rays, and support for 3D images.

They’re in essence born with a built-in headwind and things aren’t equal.” Research published in June by the bipartisan advocacy group First Focus found that the US government has consistently decreased spending on education, falling from 1.27% of overall spending in 2011 to just over 1% in 2015. Last year it signed a major development and distribution partnership with IBM and at this month’s launch of the new iPad Pro even invited Microsoft on stage to demonstrate its Office software.

Mr Cook said: “Just as in the consumer area, where we have built an ecosystem that has so many apps… we needed that expertise on the enterprise side, so we partnered with people to do that.” The iPhone is increasingly emerging as the dominant smartphone for corporate IT departments, as the decline of BlackBerry continues. Manufacturers such as Samsung, which use Google’s popular Android operating system, have meanwhile struggled to gain a foothold in businesses, partly due to the array of versions of the software that are in use. According to the Apple executive, “the best companies will be the most mobile.” The view, given Apple’s focus on building mobile computing products, isn’t surprising. He said Apple’s data centres run on 100% renewable energy and that almost 90% of its supply chain now uses renewable energy too. “In some areas I don’t want anyone to copy us but in this one, I want everybody to copy us.” Cook was talking to Aaron Levie, co-founder and CEO of Box, which provides cloud storage for businesses.

The fact that the app is built specifically for Apple mobile devices underscores how Box believes that partnering with Apple could win more customers as more workers use their personal iPhones and iPads in the office. Cook heavily pushed Apple’s strategy of expanding their products to businesses, saying Apple, which currently has a market capitalisation of $631bn, needed partnerships with IBM, Cisco and Box to diversify into specialist business markets, such as financial services. Cook paused, and then deadpanned “you want to pick the best product.” However, despite some predictable mobile swagger, Cook was honest about Apple not being good at everything. “We don’t have deep knowledge of all the verticals that the enterprise deals with,” adding that “to do great [in the enterprise, Apple] need[s] to partner with other people.” Cook didn’t just ding Google, however, during the roughly half-hour chat. Levie explained that Box could not have gotten to where it’s at without the help of the companies that it’s partnered with, and he singled out Microsoft as a prime example. In an extended riff on operating systems, the Apple CEO argued that having a single operating system for both mobile devices and personal computers is futile.

And just to show it’s not just inking deals with these old-school tech businesses, it has also partnered with Box and electronic document startup DocuSign to make its iPad more attractive to businesses. The tone of the talk was light, but Cook stressed repeatedly that Apple is taking work in the enterprise as a serious goal; it was a soft pitch to the developers and companies in the room, but appeared to be effective. Because developers need to use Apple computers to create the software (although there are some workarounds), the company’s PC sales could increase too.

But that’s not something we’re even thinking about.” Speaking to a crowd of sympathetic tech industry executives, Cook simultaneously played down Apple’s success while demonstrating the company’s dominance, asking the audience how many of them used an iPhone (several hundred) and how many used a Blackberry (two). “Our goal was never to be the biggest – we’ve never worried about selling the most. When Cook said this, Levie couldn’t resist an opportunity for a joke, and asked Cook “Is that a reference to Larry Ellison’s island?” Ellison, of course, owns most of the Hawaiian island of Lanai.

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