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Apple and Cisco Team Up in iOS Enterprise Push

The deal is comparable in many respects to one Apple reached with IBM last year.

Asa Mathat

Apple today renewed its push to sell iPhones and iPads to business customers with a strategic partnership with networking giant Cisco Systems.

Under terms of the agreement, negotiated directly between Apple CEO Tim Cook and Cisco Chairman John Chambers, Cisco said it will optimize how its networking gear runs with iOS devices, and the two companies will collaborate on products and services.

It may also go a long way toward solidifying Apple’s iPhone and iPad devices as the preferred mobile platform with enterprise customers. Sales of iPads in particular have been on the ropes recently: Having peaked in Apple’s first fiscal quarter of 2014, they have declined for the last six quarters ever since.

The deal is in many ways similar to one that Apple struck last year with IBM to jointly develop and sell mobile software and devices to business customers. At the time, Apple CEO Tim Cook called the two firms “puzzle pieces that fit perfectly together” without overlapping or competing.

The same can largely be said of Apple and Cisco. The largest supplier of industrial-strength networking gear is also one of the world’s largest suppliers of video conferencing and collaboration software used in offices. Cisco owns WebEx, the Web-based meeting service, and last year it debuted Spark, a mobile messaging and collaboration application that runs on iOS devices.

The deal will also deliver a key advantage to Apple: Reach to Cisco’s base of the large companies and governments that in the fiscal year ended July 25 spent more than $49 billion with Cisco. Most of Cisco’s business is tied up in traditional networking gear like routers and switches that go inside data centers.

But Cisco also posted $4 billion worth of revenue in its collaboration business unit, which includes its WebEx and Spark business. Cisco has promised that with Apple it will deliver some “unique collaboration experiences” for the iPhone and iPad.

Another key Cisco business that could come into play is its $2.5 billion wireless unit, which includes Meraki, a maker of office Wi-Fi equipment, managed by way of cloud-based software.

In a statement, Cisco took pains to portray the deal as different from last year’s Apple-IBM deal: “We view our partnership and offerings as complementary to the Apple and IBM offerings. Our offerings will be yet another step in delivering on our vision for transforming how people work. We’re partnering with the leader in consumer technology with the biggest mobile platform to tackle some of the most pressing problems that businesses face today and help bring it to life.”

In an interview with Re/code Rowan Trollope, the senior VP and general manager of Cisco’s collaboration technology group, said that while Cisco will continue to support mobile devices like those running Google’s Android and made by companies like Samsung on its networks, its relationship with Apple is unique.

“We’re not going to do this with anyone else,” he said. “We’ll continue to work with the other platforms, but if we had wanted to do a deal like this around Android, the first question we’d have to ask is which Android? There’s so much fragmentation on that platform, there’s no clear place to start,” he said.

The tie-up is the latest push by Apple to boost its presence at large corporations, an effort that appears to be gaining steam in recent weeks. Cook and Chambers will both appear at Boxworks, a conference held by Box an enterprise-focused cloud storage and collaboration company, in late September. Its highly unusual for an Apple CEO to appear at another company’s event.

Apple and Cisco said the deal was negotiated directly between Chambers and Cook, but at least one other Cisco executive was involved. Padmasree Warrior, Cisco’s outgoing CTO and chief strategy officer, tweeted today that she was “Thrilled to bring this one home.” Her last day at Cisco will be in September.

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