Apple’s undiscovered country: Macs in the enterprise

How many times have you set your alarm for the early hours of the morning so you could watch the show live as that technological prankster Steve Jobs pulls yet another marvel out of his hat, after uttering the magic words: “And now, just one more thing”?

If you’re like most Australian technology enthusiasts, it’s gotten to be a regular event. You’re looking forward to a new iPhone, a new iPod, a new MacBook, a new iMac — or these days, you’re even looking forward to a new iPad.

Those who work in Australia’s corporate IT departments aren’t immune to the phenomenon — Apple’s sparkly new baubles are going to be the talk of the town at morning coffee at work anyway — so you have to know what’s going on.

And yet rarely does Jobs reveal much of anything that’s really that interesting to IT managers. Apart from the odd sporadic confirmation of support for a feature like Microsoft Exchange that is clearly aimed at the enterprise, or an update of its Xserve server line, Apple’s products are usually aimed squarely at the consumer.

This situation and other issues has left Apple out in the cold when it comes to the corporate and government sectors. And yet, anecdotally Australian chief information officers will admit they regularly get requests from staff for Macs on their desktops. Despite lacklustre interest from Apple itself, demand exists from users. So what does the future hold for Apple in the enterprise?

State of play
The latest figures show Apple is rapidly growing its share of the Australian overall desktop PC market. In late January, the company revealed it had boosted its Macintosh sales in Australia by 70 percent year-on-year. Australian statistics from analyst firm IDC showed Apple’s share of new PCs being shipped (including enterprise and consumer) as of September 2009 — the most recent period accounted for — was approximately 7 percent.

Australians bought just under 1.2 million units in the period (including corporate and consumer sales), which would place total Apple unit shipments in that quarter at approximately 84,000. Analysts attribute Apple’s growing consumer market share to a number of factors, including the halo effect from its iPod and iPhone lines, its strong security and stability story, and even the quality of its hardware build.

You only have to walk into an official Apple store to be able to see the buzz around the company’s consumer offerings. It’s audible.

It’s also easy to find large and small organisations that have Macs embedded throughout their operations. Tier two banking and insurance giant Suncorp runs some Macs in its operations. Chief information officer Jeff Smith says the bank has them “in spots”.

“We do use them as there are certain things we can do better on a Mac, like with user interface development and usability,” he says. “They are invariably easier to manage and more secure.” Smith says this is an important factor when you consider the amount of money that businesses pay to secure their infrastructure.

There’s also the deal that may well have been Apple’s largest coup in the Australian enterprise — half a decade ago the NSW Roads and Traffic Authority (RTA) deployed 1200 Apple G4 iMacs in registry offices across the state.

Chilli Chocolate Marketing consultant Simon Garlick says when he first helped to start the marketing and communications agency, from day one he imposed a “Mac only” company IT policy. “I don’t have time to play IT guy making sure people have security patches installed, that they’re not using some security nightmare browser (that is, IE), that antivirus apps are updated, and so on and so on — but I don’t have budget to hire IT guys,” he says.

“Yeah, it sounds like a marketing campaign, and it is, but it’s true. You turn a Mac on and it works. No DLL hassles, no driver issues, and NO CRASHES. We all have iPhones, the office has Airport Wi-Fi access points, everything works seamlessly together.”

Then there’s the education sector, one of Apple’s traditional strengths. In February this year, the vendor published an extensive case study about a University of Newcastle rollout that saw the educational institution’s School of Design, Communication & Information Technology move its entire laboratory hardware infrastructure across to Apple, although students can still run Windows on the machines for some applications.

However, the obvious rejoinder to all of these examples is that they play to Apple’s traditional strengths in the design and education communities. It’s clear that Apple’s share of the market is higher in these sectors and in the consumer space than it is in the mainstream enterprise, where it continues largely to be left out of the mega-deals that vendors like HP and Dell enjoy.

Apple’s problem
We hate to pull out the Gartner magic quadrant here. But sometimes its necessary to do just that. In an October 2009 report, the analyst firm gave Apple the worst rating out of all the major vendors — ranking the company below Acer, Fujitsu, Lenovo and market leaders HP and Dell — when it comes to the mainstream enterprise desktop.

Gartner said that Apple’s enterprise problems are that it lacks global service, sales and support capabilities focused on the enterprise.

“Apple doesn’t focus on large and mid-size customers, and hasn’t made significant investments in the sales and support necessary to serve them,” Gartner said in a separate note specifically on the vendor earlier in 2009.

Longhaus research director Sam Higgins says he doesn’t see Macs often being purchased in bulk by enterprises as part of the sort of corporate rollouts that Dell and HP enjoy. Apple has a “false shadow” in the enterprise sector in that there is a lot of talk about the vendor in big business because of its strong consumer presence. “But the shadow is exactly that — a shadow,” he says.

The problem is no longer that Mac OS X doesn’t support the same breadth of desktop software that Windows does — after all, Macs can run Windows natively via Apple’s Boot Camp tool, or in virtualised environments through software like Parallels.

The problem, for Higgins, is that the breadth of software tools for managing a bulk number of Apple desktops isn’t as wide as in the Windows space. So while Macs may creep in around the enterprise edges — particularly when special users like CEOs demand them — the analyst says it’s hard to give them “full citizenship” in terms of being integrated with organisations’ desktop standard operating environments.

“It’s the English as a second language problem,” he says.

Higgins points to the success of Research in Motion’s BlackBerry device in the enterprise as a comparison, noting the sophisticated management tools available for the device. Windows laptops also, he says, have security tools to deal with cases of theft. “The difficulty with anything in the enterprise is manageability and governance,” he says.

IBRS analyst Joe Sweeney says his group has seen very little uptake of Macs in Australia’s large to medium enterprises. In terms or larger organisations and the public sector, he says “by far the biggest issue,” for IT managers in thinking about their corporate desktop PCs he says, is determining how they will manage the upgrade to Windows 7 — whether they will choose the traditional PC, or look at desktop or application virtualisation solutions.

Even Apple’s education sector advantage is eroding, with Sweeney pointing out the Federal Government’s Digital Education Revolution initiative was further entrenching Windows in schools.

The opportunity
To a certain extent, the problems and state of play regarding Apple Macs in the Australian enterprise have been the same for some time. But everyone Delimiter spoke to for this article agreed several factors were set to change that dynamic.

Firstly, there is broad agreement that employees are increasingly demanding the ability to bring their own technology into Australian enterprises — and that technology is increasingly Apple-flavoured.

Mortgage Choice chief information officer Neil Rose-Innes says the group used to set a standard for desktop and laptop machines that its staff and franchisees could use the company’s corporate applications on.

Now it’s moving towards a much simpler minimum configuration that reflects the fact that users want choice on their desktops, and they often don’t want a separate desktop, laptop, netbook or even smartphone for business and work. They want to bring their device in.

“My personal view is that there’s legs on it,” he says of the Mac.

Higgins says CIOs are handing users the budget for their desktop or laptop and allowing them to purchase it themselves. He gives the example of a user who might want to buy a high-end Alienware gaming laptop to use as their corporate and home machine — contributing some money themselves, perhaps through a salary sacrifice arrangement, and using some of the corporation’s IT spend.

“It’s like bringing your own car,” he says, noting most organisations don’t operate their own corporate motor fleet any more. “There’s a whole stack of psychological staff and employment benefits that can come from operating those kind of things.”

The change in technology that is facilitating this change in approach is the corporate migration to web-based applications such as Salesforce.com that don’t require software to be installed on a users’ desktop but are accessed through a web browser.

Mortgage Choice, for example last year switched its corporate email platform from Lotus Notes to Google’s GMail — which is as fully functional on a Mac as it is on a PC, and is accessed through a web browser.

Interest in cloud email platforms in particular from Australian organisations is running high, following significant deployments in the education sector.

“With more applications being delivered via the web, your choice of operating system is far less important anyway,” says technology journalist and commentator Stilgherrian — who says in his days supporting small business in IT that Mac users generate far fewer support calls than Windows users.

The interest in the web platform is also reflected in the number of corporations that are deploying smartphones — and their increasingly mature capability of accessing the web on the road. One of the leading smartphone platforms is Apple’s iPhone.

“For the iPhone 70 percent of the Fortune 100 companies in the US are either deploying or currently testing the iPhone. 50% of the Financial Times 100 are doing the same thing.

Apple chief operating officer Tim Cook said at a Goldman Sachs conference in the US recently that 70 percent of Fortune 100 companies in the US are “either deploying or testing the iPhone”. “50 percent of the Financial Times 100 are doing the same thing,” he said. And Apple is keen to get that message out.

Some believe the “halo” effect of the iPhone will have an effect upon enterprise Mac sales the same way the iPod did in the consumer space several years ago.

Ultimately, with demand from users balanced against the challenges of running a corporate IT department, the future of Apple Macs in the enterprise is still too close to call. But it’s fitting to leave this article with sentiments from a CIO — a class of buyer who will help to make that decision.

“I think it will take a little bit of time,” says Suncorp’s Jeff Smith. “But the reality is it is a productive environment for people. I think it will have a growing space. I think the leading indicator is the consumer area and market shares have been growing big time and that is going to flow into the business area.”

Image credits: Shane Fullwood (CC2.0), Acaben, CC 2.0 and Gartner