Journal Apple & Innovation – My visit to Apple’s Corporate HQ


Apple & Innovation – My visit to Apple’s Corporate HQ

05 October 2012


I have just had the opportunity to pay a visit to the Apple's Executive Briefing Center in Cupertino. This event took place earlier this week as part of the very selective Western European CIOs Innovation Tour on the US West Coast, and was organized in conjunction with the Oracle's Open World 2012 conference.

Prior to this, I had had the opportunity to visit the Corporate HQ of all my previous employers - IBM, Microsoft, and HP -. Still, I must admit that this time around it was a completely different kind of business trip, as I wasn't either heading to any business review or supposed to illustrate to my clients the solutions we are proposing. Also, personally, I well regard Apple's brand and products and I was looking forward to this, as an opportunity to simply learn and look around, hoping I could catch some of their secret recipes. As you may expect, though, these visits are surrounded by the maximum security, to the point that you cannot even take pictures inside the Exec Briefing Center.

Here are a few of my observations from the trip:

1) Apple's use of IT--Their infrastructure is obviously superb. The point is not their ability to invest, which is of course helpful. Especially when you have a large IT budget at your disposal, you may easily end up with a very complex - and maybe unmanageable! - IT infrastructure. On the opposite, I have been impressed by their all-mobile adoption and by the way they truly perceive IT as a competitive advantage, and a driver for business processes simplification. A couple of examples: their app "Unibox", which is supporting all their approvals with a few clicks, and the unified support of all of their internal business processes through their central management portal.

2) Innovation--How do they do it, and how can they sustain it? Their innovation culture is deeply rooted. As an example, the company is not afraid to introduce new products, even though they may negatively impact already existing product lines. If there was ever a question if Apple would have been able to sustain its innovation engine, after Steve Job's loss, well... I personally don't doubt it any longer. R&D investments are huge (314M$ in FY00 which grew in FY11 to 2,429M$ and more than 6,900 headcount), although going down as a % of their revenue. Their R&D investments breakdown is also interesting, as 61% of it goes against the HW, 30% on System SW, and 9% on Applications. By the way, it is the HW research which is focusing on the whole product's experience, including the packaging, with the great results which are under our eyes.

3) Cloud Heroes--We have not received detailed information on this topic, other than a generic "we have built leading edge Data Centers", but neither how nor how many and where. However, it is clear that Apple is not only providing Cloud services, but it has also implemented a flexible Private Cloud infrastructure for its own IT consumption, to obtain faster and cost-effective IT support to its mission critical initiatives.

4) Mobile--It's hard to debate the advent of the "post-PC era", with 414 million of iPad delivered already, o/w 160M this year, combined with the massive smartphones adoption. The PC will survive for some specialized functionalities, but mobile devices will outgrow them. 5B mobile phone contracts are already in place at global level. Out of the 5B, researchers are saying that there are approx 4.5B individuals who are carrying phones, and that "only" 1.6B of them are already smartphones. A potential of at least 3B phones to be upgraded!

5) Culture--You can breath it in the air. It's in the way the briefing center is set, with the highest attention to all the possible details. Quality is also a must for Apple's application development, which is fully embracing the newest technologies and best available methodologies. I was struck by their culture of innovation which translates onto not being afraid of disagreements or changes.

6) Security--The lack of a mature & robust data encryption has been one of the concerns raised by the IT departments vis-à-vis the iPad adoption in the enterprises. Well, good news: we have been told that there is already a robust hardware encryption - to be activated through the passcode lock - in the last iPad and iPhone generations, and that this could be further enhanced at application level, by using the Apple's Data Protection layer.

7) Data points--In its FY11, Apple had already reached a well balanced revenue mix, with 61% coming from international sales vs 39% domestic. Their product revenue mix is also quite balanced across their portfolio, with 19% coming from iPad, 43% from iPhone, 25% from Mac, and 13% from Music. The Apps revenue is "just" 1B$ (recorded under the item "Music"), but definitely instrumental to sell their devices, as the iPhone killer app was truly the App Store. Today there are more than 700,000 iOS apps, and there have been more than 30B downloads!

Net: could I understand what has made Apple the largest global Company - by capitalization, at least -? I believe it's a combination of factors, among which their ability to innovate, and their maniacal attention to quality and details & to simplicity. Simplification is at the core of the way they build and manage their IT, as much as their own product portfolio, which is made up of simplified & focused offerings: four product lines, each one with very few models and options. Their competitive attitude is also atypical: rather than focusing on their direct competitors, they are "simply" trying to make the best possible products.

No Company has improved itself more than Apple in the past decade. It is a true world leader, having transcended its origins so that people of all colors and beliefs can be inspired by their products. The quality of their technologies and the upgrading of their infrastructure make it unique. The harshest judges, my kids, now all want - but one - to use their products: big investment...

To the Oracle organizers: Bravo on a job well done!

*Apple is an Oracle client.

  • Massimo

    Thanks for sharing this. Massimo

    05 October 2012 Reply

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