What It Would Really Take For Apple To Crack the Enterprise Market
11:25 pm, June 8th, 2009, Pete Mortensen
Outside of the iPhone brouhaha, much of the buzz at WWDC today has been about whether the system-level support for Microsoft Exchange e-mail and calendaring in OS X Snow Leopard and various encryption options for Mac and iPhone would finally allow Apple to make serious in-roads in corporate America. Well, at least if corporate IT guys will give them a chance, that is.
In spite of Lonnie’s optimism, I think Apple is just as far today from mainstream adoption in big business as it was yesterday and pretty much every day of its entire history. As I’ve written before, the Steves founded Apple in large part because they thought that the IBMs and HPs of the world were holding back the potential of computers to transform our society.
Consequently, the organization’s entire self-image and frame of reference over time has been that big business is all too willing to adopt mediocre technologies based solely on a reputation for reliability. Macs have long provided superior tools for creative endeavors like graphic design and video editing, which is why Macs have a huge niche in corporate marketing departments, but the same can’t be said for other business pursuits.
Apple has a huge opportunity right now to make serious in-roads in the enterprise market while corporations resist upgrading to Windows Vista and don’t yet know whether or not they can trust Windows 7. But Apple won’t make big gains unless they take more drastic measures, three of which I outline below. Bear in mind, I’m not saying this is what Apple should do, just that this is what it would take to succeed in business.
Start making cheap computers with standardized parts.From the early 1990s until the sale to Lenovo, IBM’s ThinkPad line of notebooks defined the look, feel and attitude of computers for business. They were black, rugged, and nearly identical in industrial design. A machine from 1999 looked pretty much the same as one from 2003. Corporate IT managers loved ThinkPads because people generally couldn’t tell if their co-workers had a newer or better machine than theirs — the exterior was always a constant. All that, and frequently replaced parts like batteries and power supplies were common across the decade. If it worked on one, it worked on another.
Recent years have seen the trend that IBM began extrapolated upon in the corporate market. These days, it’s not just that corporations prefer to buy identical machines for employees at all levels — they’ve also chopped their budgets for PCs dramatically while increasing spending on servers and data centers. And that means that low-cost strategy players like Dell and HP are winning with large-screen machines for less than $500 (or significantly less at large volumes). If Apple wants to even think about competing, it would need to get cheap quickly and make compromises that the company has diligently avoided over the years. And do you really think business wants a line-up of laptops without replaceable batteries? Not in this galaxy.
Partner with a company with real enterprise credibility.
One of the qualities that makes Apple an amazing company is its single-minded pursuit of excellence. The company has long-since come to realize that outsourcing any of its marketing or design to another organization inevitably fails to live up to the brand’s standards (even in necessary marriages like AT&T…). Usually, Apple’s unique to the PC market combination of hardware and software is a strict competitive advantage. But that’s just not the case with corporate IT, where playing well with others matters more than playing well.
Transforming Apple on this front would require the company to partner up closely with IBM, HP, or Oracle to tailor the software on their servers and data centers to play better with Macs. As appealing of a concept as a massive data center made entirely of xServes might be, it’s just not a realistic option for most companies. And standard administration tools for big iron today is just not made to work effectively with Macs. Unless Apple’s ready to get cozy with an organization it has made abundantly clear it doesn’t much respect, this will be a major stumbling block.
Provide complete transparency about upcoming product releases.
OK, the other two points are tough, but this flat-out won’t ever happen. In the enterprise market, it’s absolutely essential that PC-makers show tech analysts and major corporate customers upcoming hardware and software before it ships so that companies can appropriately budget for significant purchases. If there’s a new line of business laptops shipping in June, IT needs to know about in last November.
Apple, meanwhile, thrives on secrecy, surprise, and delight. Can you imagine how underwhelming it would be to know about the latest iPhone nine months before its release date? Or how small an impact unibody MacBooks would have made if your IT department had gotten a call from the local Apple rep before Steve could take the wraps off of it? This is a compromise too far. Never happening.
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So there you have it: three major hurdles to the enterprise market for Apple that it will almost certainly never overcome. Being a player as a business supplier means major compromise — and Apple hates compromising. And that’s great — that’s why I love them, and probably why you do, too. I mean, would you really want to use a Mac optimized for running Microsoft Office? Perish the thought.
Posted by Pete Mortensen in Apple, Opinions, Top stories | Comment on this article
It is time that “IT” find out who their customers are. They just need to follow the money. I laugh in the face of IT who tells me what I can have and then ask ME to pay for it. I buy what I want. If they want something else then they should pay for it.
The days of hegemony by IT are over. Their FUD has become transparent. Ironically, IT does NOT dictate to Microsoft; so, it doesn’t make sense when they try to dictate to Apple. And, paradoxically, most IT dictating what they wan have never used an Apple computer. They EW just are clueless.
Apple Computers and iPhones are more productive and cost-efficient. IT departs don’t want them because it would mean a smaller department.
fdavila, on June 9th, 2009 at 5:14 am
Normally one can find some common ground with a well articulated point of view but in the case of this article, I find very little to agree with.
First of all, the idea that Apple is as far off the corporate market as ever seems plain silly. In our multinational, the IT architects (including the group chief architect) are starting to use Apples. And Apples that they bought themselves. They are actively plotting to open the enterprise to non windows machines and it is clear that consumer technology is where future innovations will come from. Apple have still got a long way to go but if they can keep innovating in hte way they have, and maintain their lead in product quality, they could well make it.
Cheap computers with standardised parts is a recipe for commoditisation. It is total cost of ownership that counts and that is why IBM sold out to Lenovo. Apple’s success is based on branding and brand value and that is the only way they can continue to succeed.
Partnering with a company with enterprise credibility is equally problematical. By diluting their brand they would end up being one of a crowd. If they want to justify the margins that keep them in business, they need to do everything to increase control over all aspects of the product. The existing enterprise computing suppliers are all there because we can’t afford to do without them. A properly configured Apple landscape, that can be maintained mostly by users might make it a company that businesses actually want to deal with.
Complete transparency on product releases actually is a requirement, but it doesn’t have to be complete. All they actually have to share are a narrow range of planning parameters, mostly financials. The enterprise IT plan is not particularly sensitive to the colour of the case of laptops.
Oh, and by the way, I work in a corporat IT department and the only Apple I have ever owned is my i-Pod.
vic hansen, on June 9th, 2009 at 6:38 am
Perhaps they will not find their way into large enterprises through the IT department, supplying bulk shipments of products at once. But as long as they make consumers happy, the transformation into businesses will continue. People buy a personal laptop for home use (because IT professionally maimed their rusty old Dell up to the point where the only things that work are Outlook and the corporate website), and will inevitably bring it to work with them. I’ve seen this happen and it will happen again, when people grow even fonder of the Mac experience.
Ohcyt, on June 9th, 2009 at 7:28 am
Ultimately, I’m with you on this, Pete. I hope Apple never does what it would really take to become the default choice for enterprise. The way things stand, one can still tell the difference between a business that ‘gets it’ and one that just ‘lives with it.’
Lonnie Lazar, on June 9th, 2009 at 7:38 am
I think Apple long ago gave up on the idea of adapting their company to make them more palatable to IT. Instead, I think their long-term goal is to transform how users use IT in ways that they control. Just look at how the iPhone is making its way into corporate. It is doing it because it is being brought in by individuals and IT is being forced to support it. Macs will be the same, especially as younger, Mac-loving employees fresh out of college reject the idea that they would have to use some locked-down Windows box at work. Ugghh.
DD, on June 9th, 2009 at 8:03 am
I believe IT will keep finding reasons to reject the iPhone until it is forced upon them by the CEO’s, top executives and employees. It would be less expensive for the companies to hire an iPhone management staff and just let the rest of the company get on with increased productivity from using iPhones. It certainly would make more sense for the businesses to let the people use the handsets they like using rather than some device that’s just been forced upon them.
I just hope IT is really telling the truth about iPhone security drawbacks and not refusing iPhones just because they’re too lazy to make the change from BlackBerrys.
Constable Odo, on June 9th, 2009 at 8:08 am
The status quo is always an easier side to argue because people generally resist change and are uncomfortable with the unknown. 80% of my livelihood comes from being sub-contracted out to companies whose IT department doesn’t know anything about Macs, has no desire to learn and therefore simply resists the alternative. Touche, because I share the exact opposite sentiments. But IT (them or I) do not run a company. What IS in the best interest of any company is productivity. I think everyone has to resist the urge to suggest that any PC must do what a Mac does and every Mac must do what a PC does. If there is no differentiation between the two platforms, this becomes a moot point.
The real challenge is to embrace the strong points of each platform and make it work for you (or the company). That is why most marketing departments have Macs. Now I can go on and on about how Macs are simply more enjoyable to use, more aesthetically pleasing in design AND FUNCTION, and that these factors make a considerable difference in the work actually being produced. But my only supporting evidence of this is my own experience with turning people on to Macs. It’s not about a better machine- it’s about a better experience.
And finally, we should all begin to judge computers (hardware and software) on their ability to play well with others. The Mac OS is mostly built on open source applications (iCal, WebDav, etc.). If you put data in, you can get the data out quite easily. Try that with Lotus Notes or Exchange or any other proprietary format without any third party add-ons or tricks.
Changing equipment is easy. Changing minds takes time… or an iPhone!
Mike, on June 9th, 2009 at 10:56 am
I’m a small business owner who went back to Mac after 8 years of a VAIO and a fantastic ThinkPad. Loved the machines (well, just the ThinkPad), but hated the software. My perfect world would be the OS X on a ThinkPad. But the reality is that MS Office, which is the de facto business standard, blows under OS X. It is slower for me than when I run Windows in Parallels and use Office for the PC. Now you’ve got people running two OS’s just to be fully compatible until an entire organization has moved to Mac. Long term it’s probably better, but in the meantime it’s pretty painful.
dustin, on June 9th, 2009 at 1:15 pm
ThinkPads aren’t any different in evolution than i/Power/MacBooks. You can’t tell the difference from more than 3 feet between an Al Powerbook and the last non-unibody MacBook Pro. It’s still hard to see the difference between an iBook and the new MacBook. And the batteries. RAM, and drives all changed in the ThinkPad as well as Macs.
There are two things that will get Macs past the armed guards of IT (speaking as a former armed guard):
1) Emulation of Windows for server-based apps, including Exchange. Sure Exchange sucks, but so does burning gasoline. But we all have to use it. And it needs to run the accounting/manufacturing/database client that everyone in the company uses. And I don’t mean using Parallels or any other shell. Just click and run, like Rosetta will with Universal Mac apps.
2) Sell Xserve. As long as 4 years ago Xserve was a superior performer and value to NT (call it what you want – it’s still NT). Apple needs an aggressive, separate Server division. If they say they have one it needs replacing. Take the page right out of Microsoft’s playbook. First, how how Xserve will work along side their NT boxes. Find the killer app it runs far better than NT (I’m guessing a monster database). Then add a second (just think if it can run Exchange!). Finally, beat NT like a rented mule in the press, just like MS did to NetWare. Flood the trades with direct comparisons of every discreet test you can find. There’s nothing more important to an IT manager than a number they can point to. Number one number: the cost of a seat license.
These are the real keys to cracking corporate: make it work in the two key shared requirements: Exchange and server apps, and make the Xserve a plug-and-play alternative to a new Windows Server box.
joebob, on June 9th, 2009 at 5:17 pm
I agree with this article as far as large Enterprises go, however, I think what Apple has done is tried to cater to 2 sub markets..
1) The SME market, where Apple already has a decent presence in some fields.
2) Enterprises which allow their employees to bring in their own laptops. I think this is the biggest field which Apple is targeting, as opposed to bulk orders by corporates.
addicted, on June 10th, 2009 at 8:06 am
Speaking as an IT manager in a Fortune 500 engineering company, most of our designers and programmers would be happy to have a Macintosh. We have a few and are getting more – the big obstacle is simply price. Our corporation has negotiated a bulk purchase contract with a PC manufacturer that makes their Windows-based boxes the best value. Heck, most of our engineers use their PC for reading e-mail and surfing the web. All the engineering work is done on login servers or our grid compute infrastructure.
A Mac can fill the “engineer terminal” role as easily as a PC (better with the underlying Unix OS) – its just that “corporate pricing agreement” thing. If Apple would do that, I see it making better headway into corporate America.
Michael Tisdel, on June 11th, 2009 at 6:41 am
I think there’s also the issue of third party app support. A lot of finance, payroll etc type apps require Windows. Ok you can run them in a VM but then why bother with the MAC in the first place.
There’s also a huge ecosystem of providers around Microsoft products offering management of large numbers of computers. If you’re considering buying a large number of Mac you’re going to want to make sure you’ve got the tools to manage them and their users.
andy, on June 14th, 2009 at 12:05 pm