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  • Apple and the Enterprise: A New Focus?

    April 29th, 2008

    How well I remember the claim, years ago, that Macs weren’t really business computers. The interface was simply too cute, and you had to use a genuine PC to get real business chores done. Of course, they forgot that Microsoft Excel actually premiered on the Mac platform before it was ported to Windows. The same holds true for Word.

    At the same time, the Mac has always been the preferred platform for content creation. Whether creating pages for a newspaper, or building fantastic special effects for movies, you’ll find that Macs have historically done the job better.

    Now I don’t know about you, but I’ve always regarded publishing and the entertainment industry as businesses. You develop a product or service for which you are paid for your labors. So how does that differ from the person who enters data in spreadsheets and gets a paycheck as a result?

    Well, forgetting that distinction without a difference, Apple also made moves over the years that favored consumers, educational institutions and small businesses far more than the enterprise. It’s even fair to say that they didn’t have much of a sales force regularly calling on large companies in an effort to get some big deals or any deals. In fact, I gather a large portion of enterprise sales are made through third-party resellers.

    Regardless, with Apple’s sales soaring, again you wonder if Apple really cares about the enterprise, and I think they do. However, they aren’t necessarily doing it directly, but through the backdoor.

    Consider, for example, the company CEO who buys a new Mac or iPhone. Now maybe the IT department has standardized on, say, Windows PCs and the BlackBerry. But the company’s leader won’t care. He or she will admonish the system administrators to make it happen, period. Once they do, they usually discoved that Macs aren’t so difficult to integrate into a multiplatform environment. In fact, there are a growing number of suggestions now that IT people need to begin to learn how to manage Macs too.

    When it comes to the iPhone, Apple is being far more proactive. They licensed AppleSync from Microsoft for seamless integration with Exchange email servers. What’s more, there’s an Enterprise-level developer program for iPhone software, which would allow a company to build their own custom apps for use with this hot-selling gadget.

    Those two initiatives alone can result in a significant uptake of iPhones, but just as important, it would encourage businesses to look more carefully at the rest of Apple’s product line.

    Believe it or not, Microsoft is evidently doing their level best to help Apple here, at least as far as the iPhone goes. They earn far more money from Exchange licenses than Windows Mobile. And, when a company buys Macs, you can bet many will probably get seats for Office for the Mac and perhaps Windows licenses to use along with Parallels Desktop and VMWare Fusion. All in all, it’s a big win for Microsoft.

    This is not to say that Apple’s strategy, which isn’t always obvious and probably hasn’t fully played out, is the best approach to take. Apple appears to be embracing the enterprise from the bottom-up, using growing consumer acceptance of their products as a wedge to get more businesses to adopt them too.

    At the same time, you wonder just how far Apple will go to appeal to businesses. Right now, most Macs have consumer-grade features, such as the built-in Web cam on the note-books and the iMac and the bundled copy of the latest version of iLife. However, the remote control is now an extra-cost option, so you have one less device to lose.

    Businesses are not necessarily going to embrace such toys. Sure, I can see some uses for iLife at the office, but the camera may only encourage employees to goof off. Or at least that’s a fair assessment a business owner might make in deciding whether Apple’s product line is suitable.

    Other than my ongoing campaign for a mid-priced Mac minitower, the so-called headless iMac, perhaps they ought to offer a special order business version of some of their products sans Web cam and Wi-Fi, perhaps, for a few dollars cheaper. Well, I can see where note-books need it, but the iMac?

    Certainly, when a company orders new personal computers by the thousands, that can ring up a significant savings.

    Now I know some of you think Apple ought to also play in the bottom-end of the PC arena, with basic boxes that eschew most of the frills of a mainstream computer. But PC companies don’t make much in the way of profits from those products. They are often used for bait and switch, to entice you to buy the more expensive model that has the features you really need to get actual chores done.

    In the end, I think Apple’s stealth marketing to business is going to pay off, even if a more overt upfront approach might yield greater gains in the short term.



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    15 Responses to “Apple and the Enterprise: A New Focus?”

    1. Dana Sutton says:

      Ever wonder why your car has parking lights? In this country they are totally useless because after dark you are required to have your headlights on in every jurisdiction in the land. But there are some countries where after dark you are supposed drive through well-lighted urban areas with just your parking lights on (which is why the Brits call them “running lights”). So Detroit figures, if we just put these lights on the cars we build for export that would mean going to the expense of setting up separate assembly lines, so it saves us money just to stick them on all the cars we build. The same logic applies to the idea of building a special enterprise version of the iMac. If Apple were to build a separate version without any of the stuff they put in their consumer-grade model, such as the iCam, by the time you figure in the extra cost of setting up the appropriate assembly line the enterprise iMac would probably wind up costing more, rather than less, than the consumer model. There is conceivably another reason why enterprise would find these features undesirable (“if we give our employees computers with entertainment-oriented consumer features they might be tempted to screw around with them when they should be using their computers for work-related stuff”), but then the arguments for building a special enterprise iMac would be non-economic ones.

      • Dana, this is easily answered, but not in the way you expect. You see, it’s possible to customize a Mac in a number of ways when you place your order from Apple. On a routine level, it’s adding memory or getting a larger drive or faster processor. When you get to the Mac Pro, you can also add an AirPort card.

        That, plus adding some additional bundled software, changes things considerably.

        With all these combinations, Apple doesn’t have a separate production line for each of thousands of possible alternatives and doesn’t need one.

        So, yes, it is possible to design certain products in such a way that the Web cam doesn’t have to always be installed at the factory and thus a slightly different case is used. Apple can, I am sure, do this in a way that doesn’t require extensive refitting at the production lines.

        Peace,
        Gene

    2. Al says:

      I think modern flexible manufacturing systems will be able to cope with having some iMacs skip the ‘iSight camera installation’ step on the production line. It’s called mass customization.

    3. Andrew says:

      What I would like to know about is whether the iPhone’s ActiveSync client can be modified to work with a regular Mac. Since the iPhone uses OS X, it shouldn’t be that difficult to make a proper Mac Exchange client on the same codebase.

      I actually prefer my BlackBerry over the iPhone (I cannot have a camera), but I would love an OS-level Exchange client other than Entourage. That would free me to put more Macs on my network without spending $400 per seat for the full version of Office 2008, especially since I already own 6 licenses for Office 2004, which is not fully Exchange compliant.

    4. What I would like to know about is whether the iPhone’s ActiveSync client can be modified to work with a regular Mac. Since the iPhone uses OS X, it shouldn’t be that difficult to make a proper Mac Exchange client on the same codebase.

      I actually prefer my BlackBerry over the iPhone (I cannot have a camera), but I would love an OS-level Exchange client other than Entourage. That would free me to put more Macs on my network without spending $400 per seat for the full version of Office 2008, especially since I already own 6 licenses for Office 2004, which is not fully Exchange compliant.

      Interesting question. So far, at least, the license is for the iPhone, not for regular Macs, where the Exchange client is supposedly Entourage.

      Yes, I suppose it would be a trivial matter to port this to the Mac, but it’s not likely to happen so long as Microsoft can sell Office licenses for the platform.

      Peace,
      Gene

    5. Dana Sutton says:

      It’s easy to have flexible manufacturing systems if you design both your product and your production line from the get-go to handle predesignated variables. Retrofitting an already-existing production line and maybe in certain ways redesigning the product (e. g. Gene’s suggested special case for a camera-less iMac) is a different thing. If you’re not going to set up a separate enterprise assembly line (which you still might want to do, if volume requires it), you are at least going to have to replace a gizmo designed to drop a camera into every iMac that comes down the line with a gizmo that drops a camera into only some of them, and so forth. And the cost of all this retrofitting has to be passed on to the consumer.

    6. Tom says:

      Hi Gene,

      I understand that people are wondering how Apple might try to lower its price point for the enterprise customer, but think of this; most businesses that I have been in contact with are tired of having to replace (cheap equipment) often. They’re tired of wasting time on tech support or replacing parts or having hard drives and memory modules fail because they got the left over lower grade versions, the constant virus monitoring (and expense on a yearly basis) not to mention the stress involved with worrying about viruses and malware, companies have had to spend more IT dollars than they ever should have because of an inferior technology. With that being said, more and more companies, small, medium and large are using video conferencing and visual chat as a form of communication and often a substitute for being there, WHY would they want to leave out an item that could prove to be such a potential performance boost for little cost savings.

      The biggest problem I see for businesses is they’ve been inundated with PC’s and that it will take time and they’re IT people will have to stop sleeping at the wheel for a little while. Apple’s “Conquer by Attrition” theory sounds pretty good to me. All of the new whiz kids and corp. geniuses are coming out of college with Macs tucked under their arms. If that’s not revolutionary enough for you I don’t know what is :). BTW, I listen to your podcast every week and love it, keep up the good work. Tom

      Dana, this is easily answered, but not in the way you expect. You see, it’s possible to customize a Mac in a number of ways when you place your order from Apple. On a routine level, it’s adding memory or getting a larger drive or faster processor. When you get to the Mac Pro, you can also add an AirPort card.

      That, plus adding some additional bundled software, changes things considerably.

      With all these combinations, Apple doesn’t have a separate production line for each of thousands of possible alternatives and doesn’t need one.

      So, yes, it is possible to design certain products in such a way that the Web cam doesn’t have to always be installed at the factory and thus a slightly different case is used. Apple can, I am sure, do this in a way that doesn’t require extensive refitting at the production lines.

      Peace,
      Gene

    7. hmurchison says:

      Apple certainly isn’t Enterprise or even close IMO. They do a good job of bridging the chasm and making sure they are compatible in many environments today but Apple has so many gaping holes it’s hard to setup even a SMB (say 250 seats or less) business based on Apple hardware software.

      1. Only one server is available and a basic RAID-5 configural config is $3400. Ouch
      2. Storage options got better/worse when Apple killed Xserve RAID and are now
      peddling a box from Promise.
      3. iwork is a nice app but from a Biz PoV it’s not a suitable Office 2007 replacement.
      4. Blade Servers- Not there
      5. Single Pane mgtmt tools.- Not There

      etc etc etc. Apple “supports” the Enterprise but they aren’t even close to even turning in the direction
      of being an Enterprise company. That would require a massive effort and many many many partnerships.
      Not while Steve Jobs is helming this company will you see that. I hope to eat crow some day but I doubt I will.

    8. You make good points, but don’t forget that Apple doesn’t need an expanded server line to be able to efficiently connect to existing Windows and Linux servers.

      On, and by the way, aren’t you forgetting that there’s an Office 2008 for the Mac? Isn’t that the “suitable Office 2007 replacement.”

      Peace,
      Gene

    9. hmurchison says:

      Office 2008 with no VBA scripting is likely not the Apples for Apples (no pun) comparison.

      I think if Apple wanted to they could really make a dent in the SMB market. Forget the Enterprise (My definition of Enterprise would be 1000 seats and up minimum).

      If Apple gave us:

      1. 2 Server options. 1U-2S(2 Socket), 2u-2S and a 4U-4S all the bases would be covered.
      2. iWork Pro- Beefed up Pages Pro, Keynote Pro, Filemaker based DB, Mail Pro, Numbers Pro,
      3. Unified Storage. Take the NAS code from BSD add iSCSI Target/Initiator and SAS support
      4. Business Desktop would look like an oversized Mac mini that “hooks” to the back of Apple Business
      LCD.
      5. Roll Apple Remote Desktop into a single pane app that manages/monitors server and desktop duties.
      6. Buy a virtualization company. Mac Xserves should be able to run OS X, Windows, Linux and maybe Solaris. Desktop virtualization would be very cool as well (VDI)

      I think Apple needs to realize that computer hardware has been a commodity for a while. Macs are no longer “wonderfully divergent” from X86 boxes. Open up your future roadmaps which undoubtedly will follow Intel’s release schedule. Keep the secrecy for the phone/mobile communications products.

      I’m happy for Apple’s success but there needs to be life beyond the iPod. The iPhone is a golden egg.

    10. Macs are wonderfully divergent not because of the parts inside, but because of the Mac OS. That is true about the iPhone as well. That is what makes Apple’s products more than just a bunch of attractive gadgets.

      As to the Office 2008 issue: Yes, I know the lack of VBA may be a problem in some environments, and they may, therefore, simply stick with Office 2004 or not switch altogether. That’s a huge blunder on Microsoft’s part — and I don’t subscribe to the possibility that it’s a deliberate attempt to sabotage the software. I think they realize that, but the claim it’ll take a year or two to bring it back just isn’t believable.

      Peace,
      Gene

    11. The iPhone 2.0 has some great enterprise features.

    12. The iPhone 2.0 has some great enterprise features.

      And we’ll be discovering lots more when iPhone 2.0 is actually released. 😀

      Peace,
      Gene

    13. hmurchison says:

      The iPhone is nice but it’s a bridge product. Isn’t it ironic that it’ll have Exchange support before iCal Server support?

      Apple excels at truly thinking differently about solutions to common problems. The problem though is they have ADD and rarely stay the course smoothly. They’re improving but I dont’ know if they have the focus for Enterprise Macdom.

      IMO the relentless persuit of superior computing should never be stifled. Somewhere there are people with great ideas about how to make the next office suite or mobile product. I won’t lie that it worries me that Apple’s hitching their trailer to what I consider the biggest Pimps of the world. Large movie and music distributors. In the end I hope that Apple empowers people to live out their dreams because that’s the most entertaining adventure one can make.

    14. Richard says:

      Apple’s rigid inflexibility is the number one reason that it will not make deeper penetration into the enterprise market…absent change. Apple’s hardware seldom fits the broad spectrum of needs of the many enterprises. Just look at how many of us non-enterprise users chafe at the inability to get what we want in the way of hardware. If an organization is to change to Apple hardware (and software) it is not unreasonable of them to expect that they should be able to change almost everything over. They can’t and so they won’t. Apple products will remain a comparatively small niche in the enterprise sector without change.

      There is a lot of money to be made in the enterprise market. Apple’s shareholder should demand that the company do something. The company belongs to them, not Steve and his lapdog BOD…the lapdogs are another issue for another day though.

      Oh, the backdating business won’t go away either. The CEO of virtually any other company would already be a distant memory.

      It would be interesting if Intel were to buy both Apple and SUN, integrating a large aspect of at least the UI of the OSes and making Apple the consumer division and SUN the enterprise division.

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