Sunday, June 01, 2008

The Importance of Apple

Recently at work I couldn't help chuckling and shaking my head as I went through a list of requirements for a well known MNC - buried in the middle of was 'Oracle support' - there, that's an enterprise customer, I thought. It's one of those 'enterprise' requirements that clients who work in multi-storeyed glass and concrete buildings with large cube farms feel concerned about regardless of whether it makes any real difference to their work. This was not the first time that I had heard users asking for Oracle support. It's all about making the right noises, which is what enterprise software is all about. I was more annoyed with the business development folks for not having nipped this in the bud than with the customer. A couple of days later I was reading an interview with the author of Cocoa Programming for Mac OS X when I came across this heart warming section:

Scott: The Mac appears to be making real inroads in the mainstream consumer computing market, and certainly the iPhone is doing the same. Do you expect to see this carry over to the corporate world?

Aaron: Apple seems to doing its best to keep Macs out of the corporate world. Most dialogues between Apple and a corporation go something like this:


Anonymous said...

It doesn't surprise me.

If you ask "Who is Microsoft's primary customers" the answer is: corporate IT and software developers, not end-users.

Apple is probably putting off jumping into bed with business in part because it necessarily separates them from the end-user: in the corporate environment IT decides what users need not the end-users. Similarly, if you cater to software developers the features you add support them rather than end-users. In some ways it's like the BASF commercials: "We don't make the products you use, we help make the product you use better (by working with the people one level up the supply chain, rather than you, the end user).

Since Apple's value proposition is user interfaces, this would be a problem. As a strategy it would be a explicit decision to step away from the end user and their needs which doesn't make sense if you put user interface design and user experience at the top of your business priority list.

The other factor is sales channels. Selling products to businesses is very different from how Apple sells its products now. It's not that they couldn't change but there are issues.

Generally, you have to use a direct channel to make significant sales, especially involving standardization of purchase decisions for your products.

Specifically, again related to the above, the people buying Macs for corporations are not end users in terms of political purchasing power within the organization but rather IT. This is where the branding of Macs works against them in this environment: Macs are easy and require less administration, which to the primary corporate buyer of computers who has to sign-off is itself an "anti-benefit".

To a typical, Fortune-1000 IT director or middle manager this is the kiss of death for a product because it translates to "My product will help downsize your bureaucratic empire and make your organization less necessary".

The pressure to adopt Macs in business today is coming from a different sources of pain so is happening despite the traditional anti-imperial reasons that have kept Macs out of businesses. These include:

1) the economic situation combined with years of downsizing have made highly replicated Windows-based IT solutions marginal even to IT directors now. The 1990s solution is to throw a separate Windows box at each server. Evidence that this doesn't "fly" anymore is the rise of virtualization. Even then, there is a thriving market to automate even completely virtualized server farms because Windows admin is still to idiosyncratic to be cost effective.

2) the iPhone has been adopted by managers above IT organizations and they want their toy to operate seamlessly with both personal and work connectivity. Normally you call this "selling high" but with Apple I believe it's mostly accidental.

3) Microsoft has been systematically angering their two primary customers (above) dating back to the Windows XP corporate licensing fiasco and the VB6/VB7 transition fiasco. When you hear about people still on W2K it's the long memory of CIOs dating back to the licensing fiasco - they are not forgetting or forgiving Microsoft still. The VB6/VB7 transition was a wake-up call that Microsoft ignored - though many VB6-ers were not stellar programmers, the economic value they represented was enormous. Many abandoned Windows development back then and the greener pasture of fast releases and improving performance with revisions on the Mac has soaked up a lot of folks.

4) Vista has failed so badly that corporations, in search of stability and predictability, have now come to see Apple as a very strong platform option even among the most conservative corporate folks. The one thing you don't do with corporate buyers is sow FUD about your own product yet that is exactly what Microsoft has done with Vista and the wavering XP support plan. A typical corporate type will start looking for anything more stable - the tolerance for this kind of stuff is really low.

5) Aging out senior management and aging in younger folks who have used Macs "all their lives" is starting to cause conventional wisdom about computing platforms to be questions. I fall into this category. As it turns out we're a Mac shop, yet we sell advanced engineering systems that are mostly running on Windows, then Linux and actually none on Mac but our software trivially runs on all three platforms.

It should be noted that Apple has had almost nothing to do with the above forces other than simply creating great products. So it sort of makes sense to see what you're talking about in your example. There's certain cluelessness to it that fit the above patterns.

Rams said...

Excellent analysis, thanks.

Paranoid Android said...

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