Next Gold Rush: Building iOS Apps For Enterprise And B2B

Written by Reinder de Vries on July 10 2019 in App Business

Next Gold Rush: Building iOS Apps For Enterprise And B2B

Building apps for enterprise and B2B is the next app boom. Apps usage in the workplace has increased, and it’s slated to grow even more. The savvy app developer knows how to benefit from a new market. You’ll learn how, in this article!

Here’s what we’ll get into:

  • How the App Store is shifting from a consumer-only focus, to engaging prosumers and B2B/enterprise app customers
  • Stats, numbers, insights and predictions for the App Store in 2019 and 2020
  • 3 approaches for iOS developers to build B2B/enterprise apps – how can you benefit?

Let’s get a move on.

  1. The App Boom Is Dead, Long Live The App Boom!
  2. Enterprise Apps: An Opportunity For iOS Developers
  3. Dive In: Benefit From Building Enterprise Apps
  4. Further Reading

The App Boom Is Dead, Long Live The App Boom!

Before we discuss why building apps for enterprise and B2B is the next app gold rush, let’s begin with where it all started…

Apple’s App Store launched in July 2008, with an initial 500 apps. Since then, it’s grown into an economy of its own: to date, Apple has paid out over $100 billion – with a B – to app developers worldwide. In 2019, the App Store counted more than 2.2 million apps for iPhone and 1 million apps for iPad. Even if a significant amount of that is “app rot”, it’s still a staggering amount of applications.

In 2018–2019, we’ve begun to see reports about the sales of iPhones slowing down1. Apple simply isn’t selling as much iPhones as it used to. Mind you, we’re still talking about $31 billion in revenue from the sales of iPhones in Q2 of 2019. People are still buying iPhones in droves – there’s not just as many of them as there used to be.

At the same time we’re seeing reports that people are spending more time in apps, but have fewer apps installed on their smartphones2, 3. Smartphone users are less willing to try out new apps, and reportedly use 30 apps on average per month. Contrast that with the 3.2+ million apps in the App Store, and you may feel less inclined to launch a new app.

As the app boom is fading, a shift is happening in the app economy. We’ve gone from trying out new apps to keeping a small ensemble of go-to apps on our smartphones. The clichéd slogan “There’s an app for that!” has changed into a question: “How does this app benefit me?” This is good news for the independent iOS developer who is building apps to solve a problem, but bad news for the app developer who merely relies on novelty.

Why mention iPhone sales? For long, the App Store has boosted the sales of iPhones. People wanted a device to install their apps on. And people needed apps to install on their new devices. The network effect of games, social media, dating and messaging apps led people to buy new tech. Combine that with year-by-year innovation cycle in the early days of the iPhone (2008-2014), and you’re starting to see why iPhone sales and the popularity of apps go hand-in-hand. A lack of real innovation could explain why iPhone sales are slowing down.

Apple’s seeing the same scenario play out, and that’s why they’re banking on services as the main source of revenue for the coming years4. Now that everyone has an iPhone, let’s sell stuff that people need on their iPhone. A subscription model for every app or service: cloud storage, music, news, TV, education, security, and so on. Apple’s riding this wave out, until the next wave of innovation comes along (AI, AR, VR).

So now that we’ve all got an iPhone, and got all the apps we ever wanted, and paid services are coming into play, what’s next for app developers looking to make a buck?

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Enterprise Apps: An Opportunity For iOS Developers

Given what we discussed in the previous section, I’m seeing two opportunities for app developers:

  1. Build apps that solve a problem, i.e. productivity apps, for prosumers
  2. Build apps for enterprise, Teams and Business-to-Business (B2B)

I’ll leave point no. 1 for a next article; we’re going to discuss the rise of enterprise apps and B2B. It’s the next app gold rush.

First off, what do teams, enterprise and B2B apps have in common? They’re used by professionals. We’re talking about solving problems for people who are at work, as opposed to entertaining or helping consumers in their off-time. This is an important shift.

Here’s how I define these 3 groups:

  • Enterprise: An enterprise is essentially a business, but when we say “enterprise-level” we mean large-scale businesses and operations. A company that consists of many smaller companies, departments and organizations, with many employees. Apps and tools are typically developed and used only in-house.
  • Teams: “Teams” as in Slack, the real-time communications app. You can think of dozens of apps, tools and solutions for teams. We’re talking 2-20 person teams that spearhead a particular project, product or campaign. Their tools aren’t always developed in-house, although many team-based apps started as in-company projects.
  • B2B: Business-to-Business is what happens if one business sells a product to another business. A company seeks to develop a Software-as-a-Service app, or they deliver a service and build an app on top of that. The main aspect of B2B is that it’s between businesses, as opposed to B2C or in-house enterprise.

These 3 groups obviously have a lot of overlap. An app could be developed by a team in an enterprise-level organization, which is then sold as a service to other companies and teams. What’s important to understand for the story going forward, is how these enterprise apps started. After all, you’re going to make that same start with your own enterprise/B2B apps.

Let’s take a look at what enterprise/B2B apps mean for the app economy. A few interesting tweets:

This discussion on Twitter makes a few notable points:

  • The no. of apps that companies use (i.e., the people who work there) has increased 68% over the past few years
  • The no. of apps is averaging around 129, but it’s likely that there are many more apps used in companies that don’t fit a specific category
  • These apps need to be built, maintained, managed, audited, serviced and integrated with other apps

If you contrast this with the consumer app market, you see that teams, enterprise and B2B are using more apps, and that this usage is trending upwards instead of downwards.

Businesses that use apps often need support, maintenance and integration. App A needs to be connected to app B, so that data can flow between them. Guess who’s going to build that? App developers! And if you know how to code, that means you.

“The business world’s growing appetite for apps showcases the move over the last 10 years from single vendors with all-in-one platforms to “best-of-breed” applications, Todd McKinnon, Okta’s chief executive officer, told CIO Journal. He describes the trend as positive, in that it reflects the widespread adoption of new, innovative technologies.”

Source: WSJ

The above is an interesting signal. Instead of looking toward all-in-one solutions, companies are now looking for “best-of-breed” apps. Said differently, companies are moving towards apps that do one thing well. They’re getting out of the mindset of a preferred vendor, and instead seek out a preferred app – from any vendor.

OK, if you’re not yet convinced by these numbers, then let’s dig a little deeper. What are second-order effects of the B2B app boom?

  • Selling apps and services to consumers is fundamentally different from selling apps and services to businesses. You may be able to convince an end user to install your app for entertainment value, but at a $1.99 Life-Time Value (LTV) you need to convince a lot of people. It may not be easier to convince a B2B client to purchase a service from you, but given that a client’s LTV is much higher, you can make more money with less clients. A point of leverage here is that your apps and services may potentially generate revenue for your client. Differently said, it’s worth more to sell a high-ticket B2B product that drives revenue, than to sell a low-value B2C app that only costs money. It’s an easier sell.
  • Thanks to tools like Zapier, Airtable and Segment, integrating systems with each other is more powerful and easier than ever. An added benefit of these tools is that they raise the demand for system integrations as a whole. When a B2B client sees that a competitor is doing data analysis with such a tool, they might decide they need the same kind of tech in their own apps. Competition in these markets is good for all of us, because it creates demand. You may be too late to sell picks and shovels, but you’re right on time to dig for gold. Whose apps need integratin’?

Let’s move on. How can you, the iOS developer, benefit?

Dive In: Benefit From Building Enterprise Apps

What you’ve read so far are facts, interwoven with some predictions, insights and opinions. Merely knowing these things won’t take you far, so how do you take action?

We’re going to take a look at 3 approaches to generate revenue, make money, and drive business with B2B/enterprise apps:

  1. Build a tool in-house and spin it off
  2. Build a B2B services app that fulfills a need
  3. Specialize in providing systems integration services

Let’s dive in.

1. Build an in-house tool and spin it off

This is actually simpler than it sounds. What’s a tool that you, your team or your company uses in-house that you can publish publicly as a paid product?

  • Slack started as an internal chat tool for the development of an online game
  • Product Hunt started as a simple email list that Ryan Hoover (PH’s CEO now) used to keep friends up-to-date on cool products
  • Twitter was originally developed at a company hackaton, as “Twttr”
  • Khan Academy started as its founder, Sal Khan, tutored his cousins, and published those lessons on YouTube

It’s stupid to aim to be the next Slack, because that’s a mountain you can’t easily scale in one step. What’s smarter, is to build something that you yourself would use. What would you want someone else to build for you? Be your own first customer, and find out what tool or tech makes your own work better. Scratch your own itch.

The next step is validating whether that same solution works for someone else. Are potential customers willing to pay money for your product? That may be as simple as sending out an email to friends, colleagues, clients and customers, or by creating a simple website to collect signups. Focus on finding out if potential customers are willing to pay for your tool, and you’re half-way there.

2. Build a B2B services app that fulfills a need

You can also build a tool around a service, as opposed to building a tool from scratch. This is typically called Software-as-a-Service or “SaaS”. A SaaS’s value is derived from the value of the service it provides. And that service needs to solve a problem for your customers.

A few ideas:

  • Build a customer management system for yoga and pilates studios, where customers can book sessions, and the studio owner can manage sales
  • Build a tool for local municipalities to find and track problems in a neighbourhood, like broken street lamps, trash and vandalism
  • Buy a 100 bikes, scooters, electric unicycles, disperse them in your local city, and let people rent them per minute via an app

The hard part about building a SaaS app from scratch is that you don’t have a product, and don’t have customers. Paradoxically, it’s smarter to start with the customers instead of the product. Are there any audiences, niches of groups of people that you regularly chat with? Find out what their problems are, and start there. What kind of delightful app can you build specially for them?

What you’re building doesn’t need to be disruptive, ground-breaking or even innovative. Think about bottled water: it’s far more expensive than tap water, but people are willing to pay money for the convenience of quenching their thirst whenever they want to. It’s also incredibly boring – and a luxury.

A simple approach is to find an audience that you have access to, and then ask them what their current problems are. Just put some feelers out, and talk with the people that you seek to serve. Can you build a product around solving that problem for them, and other businesses?

In the past, I’ve been involved in these B2B solutions:

  • A video-on-demand app, on demand. Want to start your own VOD channel, but don’t have the infrastructure to do so? Just rent it from us.
  • A data-entry app that streamlined quality assurance for construction companies. Want to capture that something is built to spec? Use the app to make photos, add some meta data, and send it to the back-office for archival.
  • A customized form app. You wouldn’t believe it, but some companies just can’t let go of physical paper. The only thing we did was put those paper forms in an app. They made the investment back within the year.

3. Specialize in providing systems integration services

The third approach to generate revenue with B2B/enterprise apps – without building a product – is to simply provide systems integration services. It’s the boring, lucrative part of what people simply call “IT services”.

Imagine a company, called Acme Inc., is using Salesforce to do accounting, or Customer Relations Management, or something like tracking sales. This company also has an app that they want to integrate with their back-office. Customers of this company can order “widgets” via the app. Currently, requests for widgets need to be put manually into Salesforce.

You can imagine that moving data from one system to another, manually, is quite labor intensive. It could be done faster, cheaper, and equally effectively by a bit of computer code that integrates both systems with each other.

In some cases, you’ll find that Salesforce already offers an integration like this off-the-shelf. In other scenarios, tools like Zapier can facilitate the integration with zero coding. But in many cases, systems integration is completely custom.

That’s where you come in, as a software developer. You can profile yourself as a systems integration expert, and step in to complete the work. You’ll need to build your professional network, of course, and spread the work that you’re for hire. But once you’ve got a few clients, and the word spreads, you’re in business.

It may not be as hard as you think it is. What’s keeping you from calling up a few local brick-and-mortar stores in your area? Ask them what their current issues are with systems integration, like accounting, cashier systems, Point-of-Sale apps, or even their website. Ask – and listen.

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Further Reading

Writing articles like this always gets me so excited. There’s so much opportunity here! And the App Store is changing in ways that benefit the iOS developer with an eye for good business.

Always remember: the word “app” comes from “application”, and the word “application” comes from “applying a workflow or solution to a given problem” (more or less). Apps give us control over solving a particular problem. And solving a problem for someone else is worth money. As long as you remember that, you’ll be in business forever – provided you have the means to tell people about your solution.

Want to learn more? Check out these resources:

References:

  1. Letter from Tim Cook to Apple investors
  2. App Download and Usage Statistics (2019)
  3. Mobile App Download and Usage Statistics (2019)
  4. How Apple makes billions of dollars selling services
Reinder de Vries

Reinder de Vries

Reinder de Vries is a professional iOS developer. He teaches app developers how to build their own apps at LearnAppMaking.com. Since 2009 he has developed a few dozen apps for iOS, worked for global brands and lead development at several startups. When he’s not coding, he enjoys strong espresso and traveling.