I Agree: Apple Should Ignore the Enterprise!
December 31st, 2007Earlier this month, I had the pleasure of welcoming Alykhan Jetha, CEO of Marketcircle, Inc., on a recent episode of the tech show. As someone who develops software for small businesses, AJ said that Apple shouldn’t really waste time and money trying to grab enterprise customers.
This goes against the conventional wisdom, that Apple is making a huge mistake not going after big business, except, of course, for school systems, where they’ve traditionally done pretty well.
If you believe what some tech writers have claimed, IT people around the world are all set to be wined and dined by Apple, so they can ditch the dreaded Windows albatross forever. But it’s really not that simple, and getting involved in pushing hard to build a large business portfolio may be a bad thing for Apple, although some third-party dealers are definitely trying.
Now I want Apple to succeed big time as much as anyone, but at what cost?
You see lots of businesses merely want cheap boxes to run their usually customized applications. They aren’t impressed by Apple’s specialty for superior fit and finish and find the serious limitations in configuration options to be a real negative. A large concern may expect Apple to ditch iLife, toss the Apple Remote, the built-in Web cam and other fancy features that consumers and small businesses crave, but the enterprise detests. Forget about having toys for employees to goof off during working hours. It’s all about the money.
When Dell and HP come calling, they are only willing to sell a company tens of thousands of cheap boxes equipped precisely as specified, no exceptions. Apple has traditionally not done that, although they have made some concessions for the educational market with such products as the late eMac.
Standardization also works against innovation. Yes, Microsoft may own the business market, but at what cost? Consider how many billions they have to spend on their products to retain backwards compatibility, for example. Besides, much of the growth in the business sector happens with smaller companies. Apple and Google are the exceptions that prove the rule.
This doesn’t mean that the enterprise isn’t getting Macs anyway. They often come through the back door, or perhaps the creative departments, where fiercely independent artists require their Macs. So the IT people may be forced to work on them, even if they doing it kicking and screaming to the very end.
The other entrance-way for Macs and other Apple products is the executive suite. As a company’s leadership acquires a Mac and now an iPhone for their homes, they often go to their technology people and insist they find a way to integrate those products with their office networks. Here’s where the magic happens.
Yes, there are exceptions to the rule, but recent versions of Mac OS X have all been designed to play nicely with multiplatform networks. You should be able to share files with your Windows counterparts with little difficulty. Even the infamous Exchange collaboration servers are getting better and better Mac support. The Leopard version of Mail makes it easier to access Exchange mail, and Microsoft has reportedly grafted improved support into Entourage 2008, which will be released in mid-January.
The iPhone? Well, it uses iTunes to sync your contacts and update software, and that operates on both the Mac and Windows platforms. Yes, there’s work to be done to integrate the iPhone with enterprise mail systems, but that will come, particularly after Apple’s software development kit appears in February.
Yes, it’s true that Apple isn’t making overt overtures to big business. But they’re still getting in, even if the route is more circuitous, and that’s a good thing.
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I’d say one thing: if Apple would at least do things a little bit easier for Enterprise customers, non-“Enterprise”-class pro customers would benefit from it, too. As it is, it sometimes feels as if Apple “should ignore” the pro creative market, too, hardware and software-wise (as an example, does the pro crowd deserve the same courtain of silence politics the consumer one gets?).
I read recently that 58% of all employees in the US are in the SMB market: companies with 200 or fewer employees. And that 80% of all new jobs are created by the same. Hence, the growth market in the US, and perhaps the world, is in the SMB market. It is where the employees, who will use the computer, will have the greatest input as to what kind.
Then too, the Mac’s have greater user satisfaction ratings. Employees are known to be more productive on them. The Mac’s have lower costs of maintenance because the user maintains them. Add into this that the Mac’s useful life expectancy is twice as long as a Wintel PC. This adds up to lower computer costs for often struggling SMB companies. That lower bottom line should be attractive enough that the management of SMB companies will ignore the prejudices that IT personnel may promote against Apple.
I do not expect that Apple will intentionally go after the Enterprise market. But, it will help SMB companies communicate transparently with larger companies. If it does that well enough, then any reason to buy a Wintel product will disappear. Even the management of enterprise companies will wake up to discover that Mac’s will save them money.
PS. The Army is increasingly using Apple computers. The main reason is to avoid attacks on their servers, but all the other reasons that apply to SMB companies influence this decision.
I’d like, at the least, the iPhone taking over BlackBerrys place in the IT ranks. Meaning, Exchange server sync and push e-mail capabilities. I don’t know what is required for an iPhone to be remotely wiped. Apple and ATT agreeing on business contracts would go a long way to help this integration. I don’t know if it is likely that Apple will be willing to produce a camera-less iPhone, either. There seems to be a number of obstacles for the iPhone to replace BlackBerrys, but it does seem doable if Apple were willing to make some allowances.
Not long ago, Odo, Apple was issued a patent on a system which called back to a central location every five minutes or so. Most commentators took that as a new DRM that Apple was planning. Or they said that this was how Apple was going to prevent Mac OSX from being installed on Wintel PC’s. What if it were not?
What if it was part of a system that remotely wiped a phone or computer if it was lost or stolen? There could be several levels to automatically encrypt its data after a time period lapsed. The program might then proceed to shut down the computer or iPhone if it got or failed to get a proper notice. That way, not even a “clean install” would wipe out the OS so you could start again. The phone or computer would be completely “bricked.” It wouldn’t respond to the installation DVD until it got notice from the central location. This would work in conjunction with Intel’s VPro virtualization system.
That wouldn’t be useful for most computer users, but it would be necessary for a secured phone.
Then again, that ability might be useful for the government and large companies. You keep hearing about laptops being lost or stolen with the personal data of thousands of people. Most times, the laptops are recovered at flea markets with the data intact or not tapped by the thief. But, why trust to that?
This could be a new market for Apple. Apple– the secure computer.
I agree: Apple should leave the enterprise market alone.
1. The company’s strength is in coming out with consumer devices and it’s already doing very well there.
2. The enterprise is a commodity market with razor-thin margins, so volume is the only way to survive. If the Mac hardware and software issues we have been seeing throughout 2007 are indeed symptoms of a company that’s over-stretched, then the problems could only increase if Apple becomes a box pusher.
3. Entering the enterprise would mean having to deal with a multitude of hardware and software variables. Apple doesn’t license its OS to other hardware makers to avoid precisely this issue.
4. With consumer devices Apple can control the experience end to end. Good luck trying to do that in the enterprise.
And so on. On the other hand, I agree that there is tremendous opportunity for Apple in the SMB space. But they will need to (a) expand their product offering to give business users more flexibility and better ROI (the mythical mid-tower Mac would be perfect for this market segment), (b) increase resources on the Mac development side (having to pull developers off a core product just to complete another gadget is not very reassuring to businesses like me), and (c) have a dedicated unit to service the whims and wants of the business owner/user.
If they do go after the SMB market, which is a lucrative target, they should probably spin off the Mac division altogether, since currently Mac development is no longer a priority within the company (the iPod and iPhone units have a specific head reporting directly to top management whereas Mac development is now under the finance director with no specific “owner”, from what I have read).
Apple’s support options are a major problem for corporations. With PC manufacturers (and home users), getting on-site service is easy to do. With Apple? You can take it to the Apple store or mail it in. In either case, you lose control of your computer and your data. Backups aren’t the point here; see Dave Winer’s comments on Scripting News for one view. Letting corporate data go like that isn’t going to happen.
My employer has a contract with Dell requiring that all defective hard drives are totally destroyed; or you can just keep the drive and do it yourself. Apple doesn’t do that.
Of course these are things a serious home user wants as well.
I expect Apple to make headway in the Enterprise market, but through the back door, not through the purchasing department. People will be bringing to work their personal computers and iPhones and demanding that they be supported.
Let’s be realistic: The Enterprise market is a niche market, albeit a huge one. It requires a special sales and marketing scheme. It has purchasing requirements which interfere with Apple’s consumer oriented marketing. It is Microsoft’s turf. Microsoft will defend it by attempting to sabotage Apple’s entry into the field, so apple need to non-confrontational. MS can constantly be changing Entourage, Word and Excel to keep out the competitors. Will Microsoft get the blame for being incompatible? No, because they are the standard.
The point is that the market is changing. Computers used to be very expensive devises costing millions. Now, they are personal devises costing hundreds or thousands of dollars. It won’t be long before they will be cheap personal devises that you will expect to function perfectly at the home and office.
Meanwhile, Linux Data key entry and display devises will take over the front end to computers. Microsoft will be squeezed from both ends. Apple will garner most of the consumer market while Linux steals away the low end market. Microsoft is in danger of being forced into an Enterprise niche where it fills the back rooms of a business.
John:
I concur. Apple support at present levels is not going to cut it in the enterprise arena. At one of my old companies they used to buy all Dells. At another company, it was all HP desktops and IBM Thinkpads. If your monitor or CPU box goes down, Dell and HP will loan you a spare one to use while they take the faulty unit away for repair.
When an infamous “mirrored door” G4 Power Mac misbehaved at a friend’s ad agency, Apple simply took the machine away and didn’t even offer a temporary replacement. So two designers had to share a machine for what turned out to be a 3-month repair job. Same thing happened at another agency I was freelancing at, this time involving an iMac with a pink screen that went away for 2 months.
When my father’s HP notebook developed a problem I took it down to the HP service centre. They replaced the keyboard and hard disk, and put all the faulty units in a packfor me to take home. I told them to keep it but they refused, saying it’s company policy to give back everything the customer brought in with him. With Apple, I hear you have to argue and keep pushing the manager to return what rightfully belongs to you.