(Bloomberg) -- Apple Inc. and SAP SE are joining up to deliver software for iPhones and iPads, opening a new avenue for Apple to reach businesses at a time when sales of its mobile devices have tapered.
SAP will develop hundreds of apps specifically designed for Apple’s iOS operating system for doctors, industrial field technicians and retailers. The two companies will release a software development kit by the end of the year to let SAP customers and consultants write native apps for Apple devices that take advantage of features such as location and touch sign-in. The deal has the potential to attract millions of software developers and sell millions of devices, Apple Chief Executive Officer Tim Cook and SAP CEO Bill McDermott said in an interview.
“I think back to 2008 when we opened the App Store for consumers,” Cook said. “This is sort of the equivalent of that for the enterprise space. Enterprise has not really taken advantage of all the great things that happen with mobility.”
The agreement, which the two CEOs sealed last October, would give Apple access to tens of thousands of companies that run SAP’s business software and some 2.5 million developers who customize its programs, which manage operations including accounting, manufacturing, sales and human resources.
Apple two years ago teamed with International Business Machines Corp. to create dozens of iOS apps for industries including energy, health care and air travel. Last year, the Cupertino, California-based company inked an agreement with Cisco Systems Inc. that makes it easier for white-collar workers to take calls and videoconferences from iPads and iPhones. In September, Apple introduced the iPad Pro, a tablet for business users with a bigger screen and a stylus.
As of last October, Apple’s 12-month sales to large businesses had increased 40 percent to $25 billion from the year earlier, Cook said.
Getting access to customers of big IT suppliers including SAP, IBM and Cisco could help Apple at a time when its era of blockbuster growth has come to an end, as the consumer market becomes saturated. Apple’s fiscal second-quarter sales fell 13 percent as it sold 10 million fewer iPhones and iPad sales continued to slide. Cook has said the smartphone market isn’t growing, and Apple shares have lost more than a quarter of their value in the past year.
“This is all about transforming the way people work,” Cook said. SAP’s platform and the new development kit “really unleashes millions of people writing apps for iOS -- we think we can do that in a major way.”
The agreement also illustrates a shift in how businesses roll out software. Protracted projects have yielded to shorter ones that make new functions available more quickly to workers. That means SAP is succumbing to the same forces that have stung software sales at Oracle Corp. and IBM. The German company’s software license sales fell 13 percent in its most recent quarter and McDermott said it’s taking longer to sign deals.
McDermott said he can see millions of device sales happening as a result of the agreement, which will serve as a counterweight to rival Salesforce.com Inc.’s programming tools.
“Where they were getting traction was Force.com and that became a billion-dollar business for them,” he said of his competitor. “That’s a great strategy until someone else comes along with a better idea.”
McDermott has long advocated Apple devices as a showcase for SAP’s software -- he once got a phone call from Steve Jobs after ordering 4,000 iPads for SAP’s sales staff in 2010 before the tablet’s introduction.
SAP’s new wave of i-applications will be written in Apple’s Swift language, promising faster response times and better access to underlying iOS technologies as the apps connect to SAP systems in companies’ data centers. The software development kit for outside programmers will also let them build native iOS apps in Swift that talk to SAP’s S/4 Hana software suite and pull information from its Hana database.
SAP is also setting up technology training centers for customers and partners in Palo Alto, California; Bangalore, India; and at its Walldorf, Germany, headquarters.
“Two things stop people from enjoying mobility benefits: They worry about security or they worry about integrating with their back end systems,” Cook said. SAP’s and Apple’s strengths can address that, he said.
--With assistance from Alex Webb
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