Sales

Apple's Quiet Pitch to Businesses


Susan Maus, an online marketing consultant, arrived at the rendezvous point at 8:30 a.m. on Oct. 13. Maus and a few other guests were escorted across the empty sales floor of the Apple Store in Minneapolis, down a hallway, up an unmarked elevator, and into a conference room. For 90 minutes, Apple (AAPL) reps talked with Maus and a dozen other consultants and shop owners about how the company's products could improve their businesses. The attendees played with iPads to check out various business apps, including one that lets users run a presentation on a big plasma screen. "It was pretty slick," says Maus. "They're really reaching out to businesses now."

Why so hush-hush? Because selling to Corporate America isn't the vibe Apple is going for. Apple makes consumer products, and Steve Jobs has long said that no company can focus on consumers and corporate customers at the same time. He should know: Jobs has had bad luck attempting to cater to business in the past—the Lisa PC in the early 1980s flopped, as did his NeXT computer in the early 1990s. Apple declined to comment for this story.

With so many businesspeople lusting after Apple products—count the iPads at your next meeting—the company can grab a share of IT budgets without having to make unsexy back-office gear. Last month Apple discontinued its only such product, the heavy-duty Xserver line of servers. "Apple is getting pulled into a lot of opportunities because of the popularity of the iPhone and iPad," says Piper Jaffray (PJC) analyst Gene Munster.

Some IT executives are receiving their first-ever sales calls from Apple. Darren Augi, IT vice-president for Dimension Data, a South Africa-based systems integrator, was contacted by Apple salespeople in April, when the iPad was introduced. "We'd never heard from Apple," says Augi, even though about 10 percent of Dimension's 11,000 U.S. employees use iPhones.

So far, Apple has opened just five briefing rooms, including the one in Minneapolis, for chats with potential business customers. (Others are in London, Paris, Shanghai, and Philadelphia.) Apple's total corporate sales staff numbers around 200, according to Munster. That's tiny next to the tens of thousands employed by IBM (IBM), Hewlett-Packard (HPQ), and Dell (DELL). When Apple does approach companies, it does so on its own terms. Augi says he was hoping Apple would offer assistance in recrafting Dimension's IT department around Apple products. All the salesman had in mind was a simple purchasing account to save Augi's staff the trouble of schlepping to the nearest Apple Store. "It was a very low-pressure, relaxed sales pitch," Augi says. "They're going after the low-hanging fruit."

When it comes to mobile sales, of course, Apple gets a big assist from its telecom partners. Hundreds of AT&T's (T) 8,000 salespeople specialize in helping companies find new ways of using mobile devices, says Abhi Ingle, a sales vice-president at the carrier. Ingle says much of the interest from business is about the iPad. Auto dealers are buying them for salespeople, and doctors are using them in hospitals. With no other hit tablet on the market, Ingle says, "Apple is definitely gaining 'mind share.' Who used Apple products in the past inside companies? It was very niche."

The success of the iPhone and iPad may also be rubbing off on the plain old Mac. In the past a lack of software and a big price premium kept business customers from buying. Now, if there isn't an Apple-friendly version of an application, chances are there's a compatible Web service that does pretty much the same thing. Salesforce.com's (CRM) Internet-based sales management system works just as well on a Mac as on a computer using Windows. Early next year, Apple will launch a Mac App Store so makers of software, including business programs, can reach customers just as iPhone app developers sell games. The store will help the company compete with Microsoft (MSFT) and the 640,000 retailers, consultants, and others that distribute its products, says a person familiar with Apple's plans.

According to an October survey of IT administrators by the Enterprise Desktop Alliance, an industry trade group focused on Apple products used in businesses, Macs may be the fastest-growing computer brand in the corporate market next year, growing to 5.2 percent of the market from 3.3 percent in 2009. Pharmaceutical giant Sanofi-Aventis (SNY) is giving Macs a closer look. More than 2,500 of the Paris-based company's 120,000 employees are using iPhones or iPads, says Michael Doyle, an IT executive at the company. Now Doyle is testing Macs and may make them a sanctioned alternative to Windows PCs. All told, Apple's sales to corporations could reach $11.3 billion in 2011, up from $7.5 billion this year, says Brian Marshall, an analyst with investment bank Gleacher & Co. in San Francisco.

How far will Apple go to woo business customers? The company has applied for a trademark on the phrase "Briefing Room," a sign that they may become standard in larger Apple stores. Chief Operating Officer Tim Cook told analysts during Apple's October earnings call that the company would keep hiring corporate sales specialists and would expand its capacity to handle business customers. Just don't expect Apple to get too businessy. On that same analyst call, Jobs made sure no one got the idea his people were overly focused on companies. He said that without much effort from Apple, its products were "being grabbed out of our hands" by corporate buyers. "We've got a tiger by the tail here," he said.

The bottom line: Steve Jobs is trying to make it easier for corporate customers to buy their employees iPhones, iPads, and Macs.

Satariano is a reporter for Bloomberg News in San Francisco.
Burrows is a senior writer for Bloomberg Businessweek, based in San Francisco.

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