Leopard Coming to an Enterprise Near You, but Could it Take Apple Out?

Rob Enderle

You often don't get opportunity without risk. Leopard truly gives Apple the chance to go mainstream, but it also makes it a bigger threat to the big 4 than it ever has been.


Strangely enough, I'm not convinced Apple represents as much of a threat to Microsoft, and am beginning to think there's a chance that if Apple is successful, Microsoft could, at least over the short term, be successful as well.


Windows on Apple


The game-changing part of Leopard isn't Time Machine or the improved search capability. It is the production-level Boot Camp that finally legitimizes Windows on an Apple PC. This creates a unique solution that IT might find compelling, one in which an employee's personal and professional activities could co-exist on the same hardware but could clearly be maintained separately. Given there are an increasing number of companies, according to Leslie Fiering over at Gartner, that are actively looking at moving to a subsidize-PC model (where the employee is given money but allowed to buy whatever laptop they want), this might put the Apple in a superior position to the Windows-only PC.


The employee gets a software bundle that includes iLife, iMovie and iTunes, and the IT shop gets access to the Windows side, which can be locked down to tools needed for work. The result could be seen as the perfect marriage of employee freedom, IT control and support cost containment, because Apple would support the base platform and IT would only have to supports its own controlled application set.


Vista Advantage


If you were watching closely, you'd have noticed that SP1 of the 64-bit edition of Windows Vista supports EFI (Extended Firmware Interface), which is used in Apple PCs and, although it was developed by Intel, not yet used in existing Windows PCs. The 64-bit edition is closer to what Vista was designed to be, and one of the reasons the 32-bit edition is likely not performing as well as hoped was because it was an afterthought.


So the 64-bit edition not only should work on a Mac, it may work better on a Mac than it does on a PC with more traditional BIOS, giving Apple another potential advantage under this blended offering.


The question is: Are companies deploying Macs and PCs side by side now? The answer is yes.


Where Macs and PCs Co-Reside


In media-creation departments, and particularly in higher education where graphics, media creation, and media editing are taught, Windows and Apple co-reside on different hardware. This is because some tools work better on one than the other, and folks want to use the right tool for the job. But if you could put both operating systems on one workstation, you could eliminate the now-redundant vendor and, currently, Apple is the only vendor where this can be done. And this is where the risk kicks in.


The Risk for Apple


Even before the large PC OEMs see the risk in the PC market, the risk of two workstations being consolidated in one Apple box will be seen as a huge competitive disadvantage and drive a competitive response. There is nothing preventing Dell and HP from building a workstation that will run both. Their limitation is Apple's restrictive license, but they likely can use the European Union to either open it up or invalidate it, much like Microsoft's competitors recently did to Microsoft. Under that scenario, Apple bleeds hardware revenue, but actually gets a little more profit margin (software generally has a higher profit margin than hardware).


Security Exposure


Enterprise security has been getting a big push, thanks largely to a lot of regulation and the increasing likelihood that companies who lose data will be pounded both legally and financially. This means that TPMs (Trusted Platform Modules) are starting to be turned on (Wave Systems, which specializes in this, was recently showcased at an event I attended), but Apple doesn't support TPMs. The recent encrypted drives from Seagate, which tie into the TPMs and both ensure the security of the data and nearly eliminate any performance impact, are becoming a requirement. And you don't get the true value of one without the other.


This could give HP, Dell, Acer (Gateway) or Lenovo a significant hardware advantage (all support the TPM and can support this drive) if they can better address -- and they can -- this security requirement while providing a platform where an Apple OS image can run.


Wrapping Up


I'm not sure we fully realize how Leopard with fully supported Boot Camp will change the competitive marketplace. It could really boost Apple or it could crater its revenue, depending on how the combination of operating systems is handled by all involved. The odds are in favor of Apple if it moves aggressively on the opportunity, but if it doesn't, it is now more greatly exposed. In addition, this provides an opportunity for Apple to preload Windows, not instead of the Mac OS, but in addition to it. Such a solution would better ensure a consistent Boot Camp consumer experience and, at least initially, allow Apple to displace redundant vendors.


These vendors aren't going to be standing still though, so if Apple stings them, and it very well might, Apple will need to embrace the security requirements of the enterprise or watch its new opportunity get passed back to the vendors who have these accounts.


In the end, this represents the opportunity for more change than we've seen in years. And it is only the beginning because, when desktop virtualization becomes common, we'll likely add Linux to this mix and then watch the feathers fly. This last scenario is likely only a couple of years out.


The future is coming like an out-of-control freight train. The only question long term is whether Apple will be on it or under it when the train passes.

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Add Comment      Leave a comment on this blog post
Oct 29, 2007 8:50 AM Mike Cox, Sr. Mike Cox, Sr.  says:
The trend is underway, and it's not good for MS:http://www.contactomagazine.com/computers/endofmicrosoft1007.htmhttp://www.paulgraham.com/microsoft.htmlhttp://wolfgang.lonien.de/?p=461And last, but not least:http://video.google.com/videoplay?docid=6843390913661737077 Reply
Oct 29, 2007 10:19 AM Rob Enderle Rob Enderle  says:
Overall the market is moving away from the desktop centric model Microsoft was built around but they are trying to turn the ship. No argument that they are having trouble with the transition but they just turned in one of their most profitable quarters so, assuming this isnt a unique event, they dont seem to be failing. I do think you can argue they arent as relevant as they once were and that, long term, the trends for them if they cant become more agile arent good. Apples kicking butt, on the other hand they are now facing more competition than ever before (in terms of shear resources). That is a lot of pressure and they arent that big. I think, they too, are going to need to bring up their game and particularly learn to partner (and I dont mean better, I mean at all, they suck at partnering). On the Steve Ballmer video. I guess it depends on your experiences. Ive worked for a long string of professional executives who tended to manage their compensation and were about as exciting on stage as a 3 year old corpse. The end result being rich executives and companies who clearly could have done better. Steve at least has some energy and passion, and he isnt managing to his compensation. Granted I think he could do better, but Im sure someone else could easily do worse as well. He may be a lot of things, but at least he doesnt look dead in that old video (but Ill also bet he doesnt do that again). Thanks for posting! Reply
Oct 30, 2007 4:43 PM John Deon John Deon  says:
So when does someone like IBM join forces with Apple to attack the enterprise market? IBM is already pushing an OS independent strategy with support for Linux and Mac OS in Notes 8. When does IBM come out and say "we'll be the enterprise support arm for Apple, we'll show you how you can save money in lower TCO from ease of use and less security flaws, and we'll be the channel/support arm that allows you to comfortably switch to Mac."Will this happen?FWIW, the Cisco experiment has been an interesting one to watch, I'm told about 20% of Cisco employees are now using Macs, IT doesn't support them though, they support themselves through a Wiki and the Apple store. Think about how unsettling that must be to an IT shop. What if the CIO realizes how much money he can save in IT support costs if he pushes that model out to the rest of the organization? Reply
Dec 31, 2007 9:16 AM elder norm elder norm  says:
Mr. Enderle,I am just not sure if you just dislike Apple or are just really sold on all things Microsoft. This is the second article I have read of yours where you seem to say that for Apple (or anyone to succeed) they have to copy Microsoft!! While I think that Bill Gates is a very smart man (I read his book), I think he and Ballmer are stuck in the past. They have focused so much on control of the market that they have ignored the markets desires. IT departments cost money. And yes hardware is cheaper if you buy the cheapest, but the man-hours of support and the "we cannot do that" stand of IT means that companies stand still. And in todays world, standing still means falling behind. Microsoft has said again and again that they are there for the money, period. Apple / Jobs has said and shown that they are trying to please the customer (IT is not really a customer, just a middle man). And more and more companies and news journalists seem to getting that message. It will be an interesting new year. At least, I think so. Elder Norm Reply

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