Apple Inc (NASDAQ:AAPL), Google Inc (NASDAQ:GOOGL) and Amazon.com, Inc. (NASDAQ:AMZN) made huge strides into the market by meeting the consumer demands for their products. These tech giants saw a slump in the growth in their core business lately, which pushed these companies to move towards corporate clients. Bloomberg’s Brian Womack and Adam Santariano discussed about these three companies’ moves into businesses in a recent article.
Apple Inc (NASDAQ:AAPL), Google Inc (NASDAQ:GOOGL) and Amazon.com, Inc. (NASDAQ:AMZN) have aggressively started marketing their products to the corporate clients. This might be due to fact that the projection of corporate spending on technology might be around $1.6 trillion in 2014, which might be 7.7 percent points more than a year ago.
According to data provided by Bloomberg, Apple Inc (NASDAQ:AAPL), Google Inc (NASDAQ:GOOGL), and Amazon.com, Inc. (NASDAQ:AMZN) have combined revenues of $305 billion in the fiscal year 2013.
“When you’re a company as big as an Apple, an Amazon or a Google, there are only so many markets that you can go to that will actually move the needle,” Ben Schachter, a Macquarie Securities USA Inc. analyst was quoted as saying.
As an indicator that these tech giants are moving towards corporate clients, they have displayed an increase in their percentage of revenues from business customers from the previous years. Apple Inc (NASDAQ:AAPL) receives less than 10% of total revenues from corporations, which has increased significantly from a share of below 5% in 2009, according to Brian Marshall, an analyst at International Strategy & Investment LLC, quoted by Bloomberg. Amazon.com, Inc. (NASDAQ:AMZN) gets around 4.5% of total revenues from business-oriented cloud sales, which went up from 1% in 2010. Google Inc (NASDAQ:GOOGL) business oriented sales accounts for less than 5% of total annual revenues, which was less than 1% in 2009, according to data from Evercore Partners and Ben Schachter.
These tech giants took different paths in the last few years, but strived hard to expand into the product sales for corporations.
Google Inc (NASDAQ:GOOGL) has launched a product line of low cost laptops called ‘Chromebooks’, which uses Google’s own OS. It has also ventured into videoconferencing services and made deals with companies like Sprint Corporation (NYSE:S) and Hewlett-Packard Company (NYSE:HPQ) to sell their business-oriented products. Google also reduced by 30% its prices for computing products and by 68% the prices for their storage, which provoked a cost reduction by Amazon.
Amazon.com, Inc. (NASDAQ:AMZN) has reduced the prices of its cloud computing offerings by an average of 28% to 61%. This restricted a lot of revenue growth in the web based business services for both Amazon and Google.
Apple Inc (NASDAQ:AAPL)’s Co-founder’s, Steve Jobs, idea of the iPad was more focused on individual consumers. But, their current CEO, Time Cook, has an alternate idea to promote the iPad as a business tool. This move by Cook was to push up the tablet sales, which has fallen in the last two quarters. Apple has also pushed up their tablet sales by deals with IBM. Under the terms of the deal, IBM would recommend their clients to buy iPhones and iPads as well as 100 business focused apps, built through collaboration of IBM and Apple. FedEx Corporation has also bought more than 4,000 iPad’s, which is pushing for a change from their paper-based documentation onto the digital documentation.
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