Apple and SAP have expanded their partnership and are now targeting Microsoft's sweet spot (AAPL, SAP)

Tim Cook, Bill McDermott

SAP and Apple expanded their partnership on Tuesday, in news that should annoy Microsoft.
SAP will be helping enterprises write new apps using augmented reality tech for the iPad, and will start bringing its software to the Mac.
All in all, its a move that could undermine the dominance of Microsoft Windows in the workplace — and that could take some of the sheen off of Microsoft's HoloLens augmented reality goggles.
Visit Business Insider's homepage for more stories.

On Tuesday, Apple CEO Tim Cook joined SAP CEO Bill McDermott on stage at SAP's annual tech conference for a mutual love-fest between the two executives.

They were there to explain how they've expanded their years-long partnership, which included bringing some of SAP's business apps to Apple's iOS operating system and helping enterprises build custom iOS apps. Next up, the executives announced, SAP will be bringing more apps to the Mac, too.

The two showered each other with compliments, with Cook saying that SAP's finance software helped Apple get out of its malaise during the company's darkest days in the '90s. McDermott, ever the charming salesman, called Cook a friend, and praised everything from Apple devices to Cook's strong stance on user privacy.

Yet the gist of the news is this: SAP and Apple will be helping enterprises build augmented reality apps for iPhone or iPad, using Apple's on-device CoreML and ARkit tools, as well as SAP's machine learning tech Leonardo. With these apps, you don't need a Microsoft HoloLens, or any other kind of augmented reality goggles that project digital imagery over the real world; just point the iPad's camera around, as with "Pokémon Go."

McDermott also highlighted that SAP had brought several of its big enterprise apps to iOS, including the HR app SuccessFactors, expense-report tool Concur, and a system for the IT department called Asset Manager. He said that SAP is in the process of building an iOS version of Ariba, its enterprise procurement app, and says that more iOS SAP apps are coming.

That's a considerable promise. While SAP is best known for its enterprise-planning resource (ERP) financial software, as the world's largest maker of enterprise software, SAP actually has hundreds of applications, similar to its rival Oracle and its frenemy Microsoft.

The real point of the partnership

For the most part, though, SAP's partnership with Apple — which began in 2010 — hasn't really been about bringing SAP's own software to iOS. It's been about helping SAP's 437,000 customers worldwide build custom iOS apps to use in their own companies.

In fact, SAP is one of Apple's largest enterprise customers, and has built handfuls of custom apps for its own employees.

"We have 100,000-plus Apple devices running around SAP. We love 'em," McDermott told Cook on stage.

And, in a similar approach to that of IBM, another Apple partner, SAP has focused on building industry-specific apps for its customers such as retail, aviation and the like. It offers enterprises a development kit so they can write their own iOS software. This kit will be upgraded to include the CoreML machine learning tool and ARkit augmented reality tool.

Cook offered two examples of the kind of apps that could be built.

One is a retail app for managing inventory on shelves. Such "planograms" are often pieces of paper today, as Cook showed in this picture:

retail inventory

But once SAP helps retailers builds their fancy new machine learning/AR app, the iPad will be able to identify the inventory, discover which items are missing or need to be restocked, which ones are in the wrong spot, and so on.

Cook showed this photo:

iPad, enterprise, work, retail

He also showed photos of using the iPad with AR in the field to replace repair manuals.

iPad, AR, repair, manual

Of note here is that Microsoft has been pitching similar uses for its HoloLens 2 goggles — so Apple and SAP working on AR tools for the iPad or iPhone might take some of the shine off of that pitch.

SAP coming to the Mac

And, in another blow to Microsoft Windows PCs, SAP said it plans to bring more enterprise apps to the Mac.

SAP was vague as to its commitment as to which apps it would be particularly bringing to the Mac, though. It didn't promise to bring any of its core apps to the Mac. It discussed new apps, similar to the ones it has brought to iOS, though it remains to be seen what, exactly, this push will entail. Like all other vendors, SAP is working like mad to get customers to buy cloud versions of its software. These would run on any device through a browser, and not need to be installed onto each server and PC.

However, the idea here is to beef up the Mac in the enterprise with new apps that make it more useful to workers.

It's another sign at how many employees at enterprises are choosing Macs over Windows when they are given a choice. As Cook pointed out on stage, that according his research, when companies give their employees a chance to choose their own computers: "Three out of four will pick a Mac," Cook said, joking, "I don't know what the other one is doing."

Most companies still run a lot of their business on Windows apps, and there are far more enterprise apps for Windows than for Macs. Enterprises remain a Microsoft Windows PC stronghold.

But looks like Apple is trying to change that, and its grabbed a powerful industry partner in SAP to help.

Join the conversation about this story »

NOW WATCH: Tesla has a mini Model S for kids that costs $600, and this family bought it to teach their child about driving electric