Exclusive: Apple's enterprise assault gets into higher gear

Apple Inc (AAPL.O) is embarking on its most aggressive expansion yet onto corporate turf, hiring a dedicated sales force to talk with potential clients like Citigroup Inc (C.N) and working in concert with a dozen or so developers, two sources familiar with its plans say.

Experts say the company hopes to offset a gradual deceleration in growth - highlighted by iPad sales that have declined three straight quarters - by expanding its footprint in the workplace.

Three months after unveiling a partnership with IBM (IBM.N) to develop apps for corporate clients and sell them on devices, the iPhone maker's plans to challenge sector leaders Hewlett-Packard (HPQ.N), Dell Inc[DI.UL] , Oracle (ORCL.N) and SAP (SAPG.DE) are starting to take shape.

Details remain scant, but some industry experts say that the tie-up with Big Blue gives Apple an opportunity to begin to challenge Hewlett Packard's and Dell's dominance of office IT, and Oracle and SAP's command of work applications. Depending on its progress, it may hamper Microsoft (MSFT.O), Samsung's or Google's (GOOGL.O) own efforts in the nascent market for mobile work applications.

Apps developers and other sources familiar with Apple's plans who could not speak publicly provided additional details on how the iPhone maker is working behind the scenes.

The iPhone maker has worked closely with a group of startups, including ServiceMax and PlanGrid, that already specialize in selling apps to corporate America. The two people familiar with the plans, but who could not speak publicly about them, say Apple is already in talks with other mobile enterprise developers to bring them into a more formal partnership.

PlanGrid is a mobile app for construction workers to share and view blueprints. ServiceMax is a mobile app that makes it easy for companies to manage fleets of field service technicians by ensuring they have access to the right information.

Apple has been sending dedicated sales teams to talk to chief information officers. At least one financial services corporation, Citigroup, has been in talks to sign on, one of the two sources familiar with the matter told Reuters.

Another person familiar with the developer's plans told Reuters that ServiceMax, whose existing customers include Procter & Gamble (PG.N) and DuPont, has co-hosted eight dinners with Apple over the past year in locations across the United States. About 25 or 30 chief information officers and "chief service officers" typically show up at these joint marketing and sales events.

ServiceMax declined comment on what they were specifically working on with Apple. PlanGrid also declined comment.

But ServiceMax chief marketing officer, Stacey Epstein, said about 95 percent of its customers use Apple devices. Each new customer will typically order thousands of iPhones and iPads, she added.

"The field service market alone is a $15 billion market," said Epstein. "One of our accounts may have thousands of field service technicians. It's a huge market opportunity for Apple."

Apple declined to comment for this story.

'MESSY, STUPID' DEMANDS

Apple has mostly kept its plans under wraps since July, when it announced the deal with IBM. Their partnership has alternately been hailed as a dream alliance, or dismissed as an uncertain tie-up between two companies with very different philosophies.

Many American corporations already deploy tablets among their workforces, for purposes ranging from pharmaceutical sales to mobile accounting.

"From Apple's point of view the enterprise is really messy, oftentimes unreasonable or even stupid in its demands," said John Rymer, an analyst at Forrester. "They've never had a business model to deal with any of that. But they do want the penetration and they do want what market share they can get."

Its rivals harbor similar ambitions. A separate source familiar with the matter said Samsung (005930.KS) is stepping up its efforts to sell devices to large enterprise clients. The company hired former chief information officer Robin Bienfait to spearhead that effort, and is on the hunt for acquisition opportunities, the person said. The source requested anonymity as they were involved in private conversations.

Apple also needed help to penetrate corporations. It is relying on IBM's predictive software, enterprise-grade security and data analytics to set its upcoming suite of apps apart from rival offerings from Oracle and Microsoft, the two original sources said.

Personnel from IBM Global Technology Services, its outsourced IT division, will handle technical support for clients under the initiative, and the two companies also plan on setting up a dedicated 24-7 hotline, according to a recently updated Apple support website.

The iPhone maker may be trying to replicate the model that served the iPhone well: hook the client on the software and content, then keep them coming back for the hardware, which is what drives the lions' share of Apple's bottom line.

"It does make sense, but the devil's in the details," said Rymer at Forrester. "The apps have to work and be economic. Can they produce solutions that are meaningful to enough people and reduce the cost over the customers doing it themselves? We'll see."