Apple's enterprise strategy: Steady as consumerization goes

Apple's enterprise strategy: Steady as consumerization goes

Summary: Apple will continue to ride consumerization to the enterprise. The iPhone and iPad will do well. The Mac won't, says an analyst.


Apple is likely to continue the consumerization dance as it applies to the enterprise, according to a leading Wall Street analyst.

Gene Munster, a Piper Jaffray analyst best known for his coverage of Apple, outlined 10 key themes for Apple over the next three years. Although Apple TV got the most attention, Munster also touched on the business tech strategy.

The biggest business tech takeaway in Munster's note was that Apple isn't likely to change its sales approach to the enterprise. And why should it? Apple has invaded the enterprise without even trying. Employees are bringing iPhones and iPads to work. And now corporations---those still handing out smartphones---are increasingly going with the iPhone.

Related: CNET: Apple TV slated to debut in December? | How to succeed in the enterprise without really trying: Apple's crunch | Apple earnings, 2Q12: 5 enterprise takeaways

Munster's thoughts on the enterprise go like this.

We believe that Apple thinks about the consumer and enterprise opportunities as significantly different verticals. If Apple's intent was to dominate the enterprise markets, we believe the company would employ a meaningfully different sales and marketing strategy. However, we believe the company is focused on delivering the best consumer electronic products possible and therefore will rely on consumer adoption to drive enterprise adoption....We do not expect Apple to make any significant changes on how it addresses the enterprise opportunity, thus it may still be a moderate road to majority market share at the corporate level in phones and longer road in computers. While we expect future iPhone and iPad growth in the enterprise, we don’t expect the Mac to have the same enterprise success. One reason is for reliability purposes, most enterprises run on versions of Windows that are two generations old. Apple provides little support for past OS versions, making it more difficult for large businesses to standardize on Macs.

Boil that down and you have:

  • Windows owning enterprise PCs.
  • Apple taking tablets and smartphones via consumerization.
  • Tablets will take over PC unit sales by 2015, according to Munster.

The wild card to this equation will be how Windows 8 fares on tablets. Munster's comments on the Mac also make sense depending on the industry. The reality is that many corporations won't be able to keep up with Apple's OS changes and ability to ditch older products.

Munster noted that Apple takes a "heart transplant strategy" where it phases out older gear. Apple tries to eliminate older products as quickly as possible. That's great for Apple, but is the exact opposite of the enterprise approach. After all, companies are still running Windows XP.

Topic: Apple

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  • I've seen too many professional users using MacBook Pro

    and MacBook Air laptops to completely agree with the analyst's opinions on Apple OS X enterprise penetration potential. I understand Microsoft's well deserved enterprise presence and a future potential to either maintain or improve their enterprise market share.

    However, to write off OS X based devices as future enterprise purchases is a bold statement. It wasn't too long ago that iOS devices were not considered enterprise capable based upon many of the same logical arguments that this Piper Jaffray opinion statement presents.
    • and I would argue..

      That business "professionals" using a MacBook Air (or Pro) are simply idiots who don't realize that they could get better performance and better software options (in box and via third party) by spending $500 less and using Windows.

      I still consider iOS devices to be NOT enterprise capable. If my job were to just read mail and surf for info on the web, then yes, but typing for any length of time, or doing compute intensive tasks any tablet is lacking (not just iOS.)
      • "Opinions vary" It's a good thing Apple does not rely

        on yours or mine for that matter but has it's own views on the subject:)

        Pagan jim
        James Quinn
      • depends

        If the tablet has a virtualization such as ThinServer XP then it can turb itself into a Windows PC
      • You've obviously never met "business professional" outside of the IT dept.

        Or even the operations department, customer services department.

        Imagine turning up at a business meeting with a battered old Dell running Windows XP, when all around you have either iPads or Macbook Air.

        Not a good look is it.

        But feel free to pipe up and tell the other people they are all "idiots" and see how long you last.
    • He didn't write them off.

      He just said, no gains. Thats not writing off. Further, I too have seen numbers of professionals using Macbooks as well. The main increase started...perhaps 2-3 years ago, no steady increase of any kind since. The increase was short lived and seemed to peak about a year ago.

      Mac reality is also just starting, for the very first time ever it appears, to be just starting to settle in. By that I mean, recent events of Mac malware is actually just reaching the ears of many Mac users as we sit here today, (I know its late in coming to those hearing it just now), I can only assume because almost all the Mac users I currently know are fairly new Mac users, as in the last three years became a Mac user. They purchased a Mac for TWO, read it, 2! Reasons only. Firstly, because Macs were touted as being cool, you know, members of the "i" family, and secondly they were told Macs don't get viruses, so they naturally thought that meant Macs didn't get malware. The look on many of their faces in the last week has been somewhat precious to say the least.

      Around the office the Macs struggle at times with hooking to the right printer, properly connecting to the email and a host of other issues from time to time, admittedly, largely because its a Windows environment and only our tech knows enough about Macs to solve even simple problems. Simple problems to non difficult problems with Windows there are always plenty of Windows users here who can solve those without calling the tech.

      As Mac reality becomes more and more evident in the months, and even years to come do not expect to see any majority increase in Mac sales. Its not going to happen.

      But nobody is writing them off.

      I own an iPhone. I would recommend an iPhone and will probably upgrade to another iPhone. If someone gave me a Mac I would sell it, buy a better Windows machine and with the savings I would by an iPhone.

      Unless WP8 is as good as it looks its going to be. That may alter things.
      • Well said..

        Your two reasons hit the nail right on the head. It's so silly people buy these products for the "cool" factor. I can't imagine blindly buying a product just because I look "cool" with it, especially in the business world. I would imagine most of the enterprise users are some sort of sales or developers. Cool doesn't cut it in productivity and cost effectiveness.
      • There are many more reasons.

        The people I know that switched to a Mac love them for many more reasons.

        1. NO BULL shite pre-installed. Remember general consumers don't know have to remove this crap.

        2. For things they do the most its just easier/better. Apple's focus from a long time ago is to put the TASK in front of the user and make it easier. Example iPhoto vs Windows Live Photo gallery. In iPhoto the user NEVER SEES the file system, does not even know where the photos are. They USE THE TOOL, iPhoto in this case to manage their photos. The tool is great for the average user, super easy to use etc. On the Windows side, the tool is capable but the user has to know so much more about their photos in relationship to the file system etc. WLPG actually shows you the file folder structure on the left hand side. iTunes is another example of this but with music.

        3. Less software needed after the purchase. There are and have been so many features built into the OS compared to Windows. Preview can basically open anything to read it. No need for Adobe Reader etc to be installed. Whole OS spell check, dictionary. Print to PDF in any app because the OS supports this. Mount ISO files, open them, create them, .dmg files etc. Before Vista/7 Windows could not even play a DVD with out 3rd party software. Windows 8 removes this again.

        4. Mac's cost more. That said the hardware externally is generally much better, much better build quality. Also the the internal hardware is usually the high end versions (I said usually). You never saw any Mac running low end Pentium Dual Cores, buts lots of cheap PC's save money. Lots of Windows Vista PC's came with not enough RAM to save money, 10/100 NIC's vs GIGE in Mac Mini's, Wireless G (and NOT N) to save money. Combined with tons of pre-installed crap gives you cudtastic starting point for a PC user. Now go download more software to read PDF's, mount ISO's, spell check in your browser/OS.

        You fooling you self if you think users move to Mac's because they are cool. Most are either sick of all the hassles with PC's or they used something like iPhoto on a friends Mac and love it. Even with the current Mac malware, Mac's are still targeted about 1000x less than PC's. PC users deal with malware a lot.
      • No, no, no .... I'm not letting you get away with that one

        "Also the the internal hardware is usually the high end versions (I said usually). You never saw any Mac running low end Pentium Dual Cores, buts lots of cheap PC's save money."

        Say usually all you like, but there is not a SINGLE Apple product that is well-specced out of the box for the money. Not one. You said that Apple did not use Pentium D's? Maybe true, but they are quite happy to deploy Core i3, which is todays equivalent. What about graphics cards? Apple choose the cheapest ass nastiest graphics card they can find just to add 'GPU' to their description. Mac 'Pro' shipping with lowend Geforce 120 but costing over 2000 dollars? No cheap components my foot!

        Yes, you can buy PC's with cheaper components, but the point of doing so is that they may be adequate for the money and cost you FAR less (even with Windows included). This is very unlike Apple products, where your choices are severely limited. In contrast a PC can be cheaply specced, nicely specced or over specced however you like.
    • I agree

      Every year we have more and more Mac's at work. They can do everything a PC can these days. Microsoft helps that along with Office 2011, that has Sharepoint connectivity, Lync clients etc.

      Add to that so much of what users do it web based now, either internally (intranet, internal apps etc) or externally.
  • Apple fails in Business and IT.

    In both IT departments and business offices Apple's marketshare is probably statistically zero. It is a dud in the business world.
    • And with that attitude,

      You'll never make it to the boardroom.

      (Where everyone has them)
      • Who's Board?

        How would you know?
        The only progress I've seen at all has been Apple into RIM areas - definitely not the same Enterprise area taht MS basically owns.
        and that includes at the board level.
    • Honestly so what?

      The consumer market for computers surpassed the enterprise in 2003 I believe. Ad in non-computer electronics (tablets, smartphones etc) and the consumer market is a giant in terms of spending compared to the enterprise market.

      Apple is laser focused on the consumer market. Microsoft is stumbling with consumers. The Xbox is the only thing consumers care about, and most of them probably don't even know its a Microsoft box. That said the Xbox is about to be eclipsed by the PS3 and will move to #3, even though it had a year start on the Wii and PS3.
  • Impressions are one thing - numbers are another.

    It's well documented that Apple owns the $1000+ laptop market. They're also doing well with the MacBook Air, although that may change by the end of this year.

    So, when you see "a lot of MacBooks" around the office, you have to be a bit careful how you do your calculations. First off - how many of those are provided by the company? If not, then they're paid for my the employee and last time I checked, most consumers still buy < $1K laptops. And since they're the ones that stand out (mostly because their owners seem to feel a need to hold them out in such as way as to make them as visible as possible), you may be getting a seriously false sense of how many there are.

    Then there's the desktop. There are a LOT of desktop systems in enterprise and they're by a huge percentage all running Windows.

    Worldwide, Macs are still around 6.8%. Windows is around 90%. You should expect about 10 to 1 Windows to MacOS.. but in enterprises, there a tendency to choose Windows because of the strong support for enterprise solutions.. so in fact, based on the last set of surveys I've read on marketshare in enterprises - it's closer to 97% for Windows.

    When it comes to phones, Android is at 60%, iPhones at 30%... so you should expect to see around 2 to 1 in the enterprise as well.

    Tablets really are the only domain where Apple has a serious lead over everyone else (59%), but the Android market share (34%) is climbing in much the same way it did in the smartphone market.

    So Mac in the enterprise? Not so much.

    iPhones moreso.

    iPads a lot moreso for now.
    • Have to allow for enterprise 'due diligence' delay

      What is 'popular' in enterprise today is behind consumer trends due to the 1-2 years required to:

      1) Make sure it is worthwhile, as in not investing in dead ends = let consumers be the lemon testers, AND

      2) Ensure it works with enterprise infrastructure.

      That process automatically filters out anything 'new', which Android most certainly is NOW as far as being a real contender for enterprise $$$.

      Phones are relatively easy to use in enterprise settings, as long as apps are not required. At that level, it does not really matter how much support the manufacturers provide, as in a relatively short time an enterprise can pick another popular phone to standardise on for issuing during the next year.

      Anything else starts requiring a measure of ongoing and often longterm IT infrastructure support and that means being well supported and manufacturers have to play the enterprise logistics supply line and long-term support game, which Apple (and others consumer-focussed companies like Samsung) doesn't, whereas Lenovo, Dell and HP do.

      For the latter devices, enterprises are in competition with consumers who are more willing to just pay the money without requiring complicated support contracts and SLAs.

      Enterprises usually don't buy these devices directly, but through their facilities management outsourcers, like IBM and HP, who provide them with the all up package (device and support). In comparison, retailers are a momentary blip in the sales channel.
      • Maybe one size no longer fits all

        It may well be that no one company can align its cost structure to serve both the consumer and the enterprise while remaining profitable. To "play the enterprise logistics supply line and long-term support game" costs money and requires certain business processes that add inertia, delay, and a propensity to allow the major accounts sales force to drive R&D in the direction of "more of what we have now, only faster." Those are things that enterprises reward, but that consumers punish.

        The astounding recent rise of Apple as a consumer products company, and the simultaneous difficulties faced by enterprise-focused suppliers like HP. Dell, and RIM, tell us that consumers are driving the bus these days on those devices that consumers buy. This is very different than the old Microsoft (and RIM) strategy of grabbing consumers while they're at work, and getting them to use the same tools at home. In fact RIM may be Microsoft's 'canary in the coal mine' warning it that relying on enterprise sales to drive consumer sales as a by-product no longer works as well as it once did. As you point out, phone suppliers were -- until the Age of Apps -- a lot easier to replace than any IT infrastructure vendor. What happened to RIM just happened faster than it's happening to HP, Dell, Microsoft, etc.

        The one guy who has escaped all this is the guy who decided that consumers would no longer be part of his life: IBM. They went whole-hog for the enterprise, aligned their business processes accordingly, and have been posting good gains at high profitability since. The guys who are trying to do both are all sucking gas.
        Robert Hahn
      • @Robert Hahn

        and IBM surpassed Microsoft in revenues in 2011, moving into #2 behind Apple.

        My how things have changed.
    • I agree with Apple = $1000+ market for laptops.

      But every single time we point that out, it should be qualified carefully so as not to get anyone too excited.

      How many laptops does Apple even make that retail for less then $1000?

      How many models are there of Windows laptops that sell for less then $1000?

      In this particular comparison, due to the pricing scheme of Macbooks and the reasons why people who do opt for a MacBook as opposed to a Windows laptop, the comparison doesn't represent much. More of a case where there are a multitude of Windows laptops that sell for less then $1000 and a case where if you want or need a Macbook you are stuck paying $1000 or more. Of course, you have the Macbook air at $999.

      So even the $1000+ laptop market, in this particular case, doesn't mean a lot of what it might potentially in other fields where the marketplace might be fairly evenly distributed with like minded and like priced product.
  • Apples Enterprise Strategy: Steady as she goes

    or not at all. I remember one time that Apple would assign an "Enterprise rep" to any company with more than 100 PCs. Although, large. 100 is hardly Enterprise. They, quite frankly, have failed to insinuate themselves in to the enterprise.

    Look at the short lived XServes. Open Directory did not scale past a campus, management tools were primitive, and the box itself did not actually fit in some standard 42U racks.
    Your Non Advocate