Apple in the Enterprise: Look to the Sun

Rob Enderle

One of the questions we toss around here is whether Apple is moving into the enterprise. Some think it is wise not to (the margins and costs suck), and some think that the iPhone represents the big push.


Personally, I don't think Steve really wants to do the enterprise directly. However, enterprise business is often incredibly attractive because it represents so much revenue, and Steve Jobs won't be running Apple forever. So I thought it would be fun, given that I've participated in the creation of a number of enterprise programs, to detail what it would take to make Apple a true enterprise power.


I see two potential paths. One where the current IT buying model changes, at least with respect to PCs, and one where Apple complies with the model using IBM methods that worked when IBM was in its prime.


iPhone Path into the Enterprise


If someone were to describe the iPhone as a network-connected device that would run applications, play video, do e-mail, and run OSX to some who had never heard of the device, that person would likely think they were talking about a Mac Tablet computer. In many ways, the iPhone is more PC than phone or MP3 player and it's vastly more capable than the first Macs ever were. The platform now has third-party developer support, and were the device connected to something like the Celio Redfly, you probably could leave your laptop at home and live off of it. It might even improve the battery life.


The reason I point to the iPhone is that, unlike PCs, phones are still largely bought by the employees. If you can change the current purchasing model for PCs, which will happen naturally as smartphones increasingly displace PCs, then Apple makes its way into the enterprise. Then third-party application vendors will assure that every beachhead Apple gets is both protected and mined for additional revenue.


If we fast-forward 10 to 15 years when the cell phone and the laptop will largely be different flavors of the same device, Apple will have ridden that wave into the enterprise and could be a major player without sacrificing margins through volume sales to enterprise buyers. But this requires that enterprises remain as they are and not start taking over control of the phone-buying process. Given the increased risk that phones represent to security, I'm not sure that this is entirely a good bet, and clearly RIM is not betting on this path.


However, were someone to wake me from suspended animation 15 years from now and tell me that Apple was a major player in the enterprise, this is the path that I believe it would have taken to get there.


Following IBM


The second path is probably the more sure, though it would require Apple to vastly change how it approaches the enterprise. Currently, Apple takes the view that enterprise customers are like any other; they go to a store and buy a product and don't get any special treatment. Interestingly enough, Apple itself wouldn't do business with Apple because it too expects better behavior.


What it would need is a tight relationship with enterprise buyers who currently expect roadmaps and assurances that the companies supplying them will make needed changes to address enterprise requirements.


Back when IBM was the dominant end-to-end solutions provider, it had Share and Guide, two IT-based, powerful usergroups (in their day). They were basically IT unions that collected requirements and complaints and presented them to IBM. When IBM was at its peak, these organizations were often the firm's biggest organized fan clubs and provided substantial peer-based insight into how to successfully deploy IBM's closed platforms and use the related technology. The group still exists in some areas and in some forms, but really never transitioned out of the mainframe arena.


Apple is already willing to provide some information on future products like Snow Leopard to developers, and the needs for IT are not greatly different. In addition, now that Apple is on Intel, basic hardware roadmaps are also known. Even if Apple weren't willing to share specifics, Intel can and does provide roadmap information to enterprises who could better use this information to anticipate and become comfortable with future Apple moves.


So, through the creation of an organized enterprise user group like Share and Guide, and without disclosing more than it, or its partners already do (just organizing it better), I think it could become more acceptable to the enterprise. But to be a full enterprise vendor, it needs a back end. That's where Sun comes in.


Buying Sun


Sun is in trouble. Rumor in the valley is that the Sun board is actively looking for a new CEO (financial results aren't where they need to be right now). Often when faced with this kind of problem, the CEO at risk moves to either make an acquisition or sell the company to avoid being booted.


Consider that Apple really doesn't have much of a server business and has no enterprise sales force, both of which would be required if Apple wanted to move aggressively into the enterprise. Sun has both.


Given that Sun almost bought Apple in the late '90s for a song but walked away, indicating that Apple had no real value (something it probably regrets today), it would clearly be ironic if Apple bought Sun now to create an enterprise unit and sustain a real server line. Much like Microsoft's Internet division is an embarrassment to that company, Apple's server line is a bad joke as it currently exists. Sun is clearly capable of fixing that and putting Apple on the server map.


Sun has become too complex and is suffering as a result. Steve Jobs, if he has the time, could likely at least focus that unit, though his own lack of enterprise knowledge could also cause him to break or destroy key assets. This wouldn't be without substantial risk and this wouldn't be the first time it had been contemplated.


Wrapping Up


I have a hard time seeing Apple as a major enterprise player, largely because it doesn't want to be one. Enterprise sales aren't something you do both accidentally and well. So the big question remains: Is Apple really serious about the enterprise? Its recent changes to make the iPhone acceptable to the enterprise certainly would imply that the answer is shifting from no to yes. We'll see.

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