Apple goes enterprise? It could happen
- March 27th, 2008
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- 7 Comments
While some of us may remember the XServe and basically say “didn’t Apple already go enterprise? And fail?” this rumor is different. Basically folks are saying that thanks to the iPhone SDK, ActiveSync/Exchange support, and sheer force of will on Steve’s part Apple will become a fully-fledged enterprise player, offering synced iPhones and Mac hardware to hungry, hungry cubicle dwellers.
Nah.
The enterprise market, like the PC market, is commoditized. Sure, you get the outliers but on the whole the PC on your desk at work probably cost $200 and a bag of Cheetos. This price probably doesn’t sit well with Apple, who knows that making a good, expensive product is better than making a lot of crappy products (Coby vs. Sony, for example). Coby has probably a single digit profit margin while Sony and Apple have perhaps in the low 20s on some things. Sure, there’s R&D and Sir Howard Stringer’s fleet personal ladyboy masseuses to pay for, but generally the big money is in making products the Apple way, especially for a company the size of Apple.
I could see a sub-$500 Mac Mini sitting on desks but not at huge enterprise customers. Maybe at a mid-sized business? Maybe at a chain of retail shops? But I doubt Exxon or Citibank is in line for some sexy hardware. If they could pay $45 for each desk, they definitely would.
I don’t think the higher price for equipment is for better equipment. With Apple the higher price goes into a faster more stable OS and design of the machine. In the building a work in we are about 50/50 Mac/Windows. I have more send out repairs on Intel Macs then I do Dells. It is double Mac repair to Windows right now. The first gen MacBook Pros and Intel iMacs were nothing but trouble. Logic boards replaced all the time. The first five MacBook Pros we bought all had to be serviced within the first year. I just had a MacBook Pro show up and was dead within hours of setting them up.
Hardware is hardware, it doesn’t matter what manufacture puts it into a case, it can have issues.
I think what big businesses have to look at is long term cost. The cost of owning a Mac long term is cheaper. It’s the up front cost that’s expensive. I don’t know if you have tried to use a Windows computer after 5 years. It sucks and you would rather just not use the internet. We have 7 year old white iBooks that we still check out to students on a daily basis. They still work and allow them to type papers just fine. Our life span on Windows laptops is about 4 years before we stop using them because of all the complaints.
Another thing they need to look at is support costs. I am working daily to clean spyware and just crap off slow Windows computers. What they pay me to do that could be applied to a Mac that I won’t have to worry about them getting spyware and virus’.
I think as the popularity of Macs grow for home users, businesses will start adopting them, even big businesses. Right now if businesses switch to Mac they would also have training costs. Wait a few more years let Apple get a bigger market share and then you will see iMacs sitting in cubicles.
You imply the XServe was a failure because it didn’t penetrate the Enterprise. But if you had noticed, Apple wasn’t selling it to the Enterprise. They sell XServes to media companies, production companies, creatives, etc. It’s been a smashing success in the market they are targeting. I had the first one in my office for a while, and it was a breeze to set up and use. Too bad our IT guys were afraid of it. It was like a bunch of natives from Borneo seeing an airplane for the first time. I thought they were going to break out the witch doctor and sick him on it.
Anyway, I work with a research scientist who used to work for Raytheon. They did a survey and found that it took three technicians to service 100 Macs, whereas it took 10 to service the same number of PCs. Once that kind of information gets out, that will make people think.
And if Apple was smart, they’d start doing some “Get a Mac ads” with the two guys talking about enterprise. (And come up with a real enterprise program.) But that will have to wait until they get a bit bigger. Then they can spend some of that $20 billion in cash they have stored up to build up an Enterprise infrastructure that will work and make money for them. The iPhone is the first step in that direction.
@Eric,
Those numbers seem high. I run an all-Mac shop of 60 laptops/workstations. I can easily support them plus every other IT function. Apple states internally they have one IT support person for every 100 employees. And that counts server and network admins. Of course, every new Apple employee has to set up their own Mac when they arrive. I guess they figure you shouldn’t be working there if you can’t configure it yourself.
Anyway, I think Apple will make a dent in the Enterprise. But consider the various OS revisions that come loaded on new Macs. If a company standardizes on, say, 10.5.2, and six months down the road they purchases more Macs, they will probably be running 10.5.3 and will not be able to run the older version. Most large corporations can’t change that fast. But, it really only matters if the software running on them doesn’t work. So, who knows.
@Jeremy
Have you ever worked for a Fortune 100 company? I have. We used Macs as well as PCs. This isn’t a Mac vs. PC argument. It’s the fact that very little has to change internally to allow Macs on a network. Windows file servers support Macs quite nicely, as well as do Exchange and Domino servers. And Apple Xserves also support Windows PCs without having to pay for per-seat licenses. That is a huge cost savings when all you want to do is serve files or printing. Be specific instead of berating something you know nothing about.
I’m not sure what I was berating. I’ll sum up my response so you don’t have to read it all. Maybe it only makes sense to me.
1. Hardware can go bad no matter what fancy case you put around it. All hardware is going to have issues. The main reasons for a Mac is faster more stable OS and design of the machine.
2. The longevity of a Mac will outweigh the high initial cost.
3. Supporting costs for Mac is lower. You even stated that you support 60 by yourself. Apple says 1 tech per 100 machines. Right now I’m 250 Macs by myself and 90 of those are used by kids. There are plenty of education institutions that are supporting well over the 1 to 100 ratio.
4. Macs become more popular they will end up in big business.
I don’t want to start an argument in replies but I don’t understand how I berated anything, especially Macs.
Personally, I think that Apple has a real chance to penetrate the enterprise in workgroups that are pre-disposed to all things Apple to begin with (e.g., I see more and more developer types flat out demanding Macs, and marketing has always been a stronghold), and now with MacBook Air, iPhone and the whole TCO (total cost of ownership) story tilting in their favor, a lot of those barriers go down at the workgroup level.
That is somewhat of a trojan horse into enterprise in same way that VMware leveraged multi-OS application testing at workgroup level to back door into enterprise datacenters.
Also, bear in mind, there a number of segments like media, entertainment and agency that the creative types have been on Mac for awhile and now the business types are looking longingly at getting on that bandwagon.
Tendency is to see this stuff in all or none terms when truth is that segments and workgroups are where real beachheads lie.
Cheers,
Mark
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My Blog: http://www.thenetworkgarden.com
Businesses are a lot smarter about Total Cost of Ownership these days.
What’s a couple of hundred bucks more per seat (every few years) for hardware, compared to laying off half your IT department?
@ Jeremy,
My apologies! I’ve been reading too many blogs today:-) Your initial post was spot on.