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Apple, Inc. Picks Up Another Enterprise Partner

By Evan Niu, CFA - May 5, 2016 at 4:30PM

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The Mac maker is expanding on its newfound enterprise strategy.

iPad Pro. Image source: Apple.

Nearly two years ago, Apple (AAPL -1.80%) announced a major deal with IBM (IBM 0.34%) in an effort to bolster its presence in the enterprise. In having IBM help create customized mobile applications that directly target specific markets and use cases, while also having Big Blue's global salesforce help sell the hardware, Apple found an incredibly important and influential partner in the enterprise.

Apple is now adding another enterprise partner to the mix.

Three's company
The Mac maker has just announced a new partnership with enterprise software maker SAP (SAP -3.42%). Much like the IBM partnership, the SAP collaboration is focusing on mobile productivity and apps.

The two companies will release a new iOS software development kit (SDK) that allows developers to create native apps specific to their business needs. The SDK will leverage SAP's HANA cloud platform-as-a-service. The SDK is expected to be released by the end of the year. Meanwhile, SAP will also help develop a handful of native iOS apps as well.

In a press release, CEO Tim Cook noted that 76% of business transactions have some contact with SAP's systems, positioning the German company at the center of many enterprise interactions. Apple wants to leverage that position for new inroads to enterprise customers.

Think different
This partnership is the latest in Apple's relatively newfound strategy of targeting the enterprise. Historically, Apple disdained the enterprise market since purchase decisions were made by high-level IT executives. Apple would prefer to appeal directly to a consumer that makes the purchase decision. But Apple's popularity among consumers began to invade enterprise IT systems with the rise of BYOD policies.

At the same time, the consumer business has gotten so big that Apple is now struggling to find growth. As many consumer markets mature, Apple is turning to the enterprise as a possible alternative growth avenue. The 12.9-inch iPad Pro is very much targeting professional users, particularly of the creative variety.

Investors can thank Cook for this recent appreciation of enterprise customers. Steve Jobs was largely why Apple never took the enterprise too seriously. But Cook is a more rational and traditional leader that recognizes the potential in the enterprise, even if the market strategy must be different.

Lacking deep experience catering to the enterprise market, the best move is to partner with those who have plenty of it.

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Stocks Mentioned

Apple Inc. Stock Quote
Apple Inc.
$136.72 (-1.80%) $-2.51
International Business Machines Corporation Stock Quote
International Business Machines Corporation
$141.19 (0.34%) $0.48
SAP Stock Quote
$90.72 (-3.42%) $-3.21

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