Apple has hired tech team from data science startup SVDS

Apple has made a quiet but interesting move in its longer-term strategy around courting more business from enterprises. The company has hired the tech team — at least 18 people, including at least two co-founders, one of whom is the CEO — from Silicon Valley Data Science (SVDS), a startup based out of Mountain View that provides business transformation consulting to enterprises and other organizations using data science- and engineering-based solutions.

SVDS the startup is not part of the deal: we had tip that Apple acquired the company but Apple responded to our queries to confirm it had not acquired the company, without elaborating further  (we’d originally been tipped off on the via deal an anonymous tip).

We also reached out many other people connected with the company, including investors, founders and other employees.

“I’m sworn to secrecy at the moment,” one person connected with the company told me when I contacted him. “I’d prefer not to comment,” another said.

“Everything is confidential,” a third response said. “Apple acquired the tech team to support product dev ambitions. Can’t say more.”

It’s not clear what is going on with SVDS itself. Its website is still up, but the SVDS social accounts on LinkedIn and Twitter have not been updated since November, although it did come online to post a blog on December 28, with a short, upbeat message wishing readers a happy holiday.

The 18 or so people who have updated their LinkedIn profiles to now working for Apple appear to have made up between one-half and one-third of the company.

They include Sanjay Mathur, who was a co-founder and CEO of SVDS, who now describes himself as a strategy and analytics leader at Apple on LinkedIn. Another one of the company’s founders and its CTO, John Akred, now lists his current job as “algorithms at Apple” on his LinkedIn profile. SVDS’s principal architect, Serena Cheng, now lists her job as engineering product manager at Apple. And Scott Kurth, who had been VP of client solutions at SVDS, is now also a strategy and analytics leader at Apple.

In a way, SVDS is not your traditional Silicon Valley tech startup: it is focused more on consultancy around existing technology than building the tech itself, although those who have worked on enterprise IT implementations and problems know that often some of the more interesting solutions are created to fill a need, and sometimes the basis for products in their own right.

SVDS itself was founded by Jim McLean, Akred and Mathur, who respectively cut their teeth at big investment and consultancy firms (McLean at 3i and Crosslink; Akred and Mathur at Accenture) in previous roles.

The team, which at the beginning of this month numbered around 30 according to LinkedIn, also counts a number of data scientists and other engineers as well as consultants in its ranks with years of cumulative experience between them. SVDS has raised around $3 million in funding from a notable group of investors that include Crosslink, GSV Capital, Cendana Capital and the well-known tech investor Frank Quattrone.

It’s not always completely clear what Apple intends to do with its acquisitions — human or otherwise — but it’s notable that the company has been steadily ramping up its focus on working with large and small enterprises in recent times.

Apple last broke out how much it made from its enterprise business in September 2015, when CEO Tim Cook said the company made $25 billion in the 12 months to June 2015, accounting for 14 percent of its revenues in that period. “This is not a hobby. This is a real business,” he said at the time.

It’s a sentiment from which he has definitely not retreated: “Enterprise is like the mother of all opportunities,” he said last year, in an interview with Bloomberg.

While Apple has not broken out enterprise revenues, you can do rough calculations to guesstimate what the value for it might be today. Using its fiscal year 2017 revenues of just over $229 billion, 14 percent of that would work out to about $32 billion in FY 2017.

As with Apple’s other business, a large part of its enterprise sales will be attributable to the purchase of hardware like iPhones, iPads and Macs. But these days, the company is no stranger to the fact that when it comes to corporate buyers, they often make device choices that are tied in with larger IT projects that include the building of business solutions that could include apps and much more — a shift from its previous positioning and reputation.

Starting in July 2014, Apple started to ink deals with the likes of IBM, Cisco, SAP, Deloitte and most recently Accenture to help make the case to enterprises for Apple-based answers to their business needs, building iOS productivity apps, business transformation services, legacy IT migrations, IoT-based services and more.

Interestingly, these are all areas where SVDS happens to have worked on in the past, both directly with clients as well as part of R&D projects that it devises to expand people’s skillsets. (The latter list has included a large project analysing Caltrain delays to predict their arrivals; a visual representation of the history of rock-and-roll; and trying to put a figure on the value of data.)

At least one of these partnerships, with Accenture, co-locates Apple employees within Accenture teams. One guess I’ve had is that SVDS could have been acquired by one of these partners and is continuing to work with its tech team, which has now moved over to Apple.

Again, we’re not totally certain where this team is working; this is just an educated guess, which highlights things that both Apple and SVDS were already doing, and could be doing more, now in collaboration. We’ll update this story as we learn more.

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