January 23, 2004

Apple's mouth says 'No' to the enterprise, yet all other signs point to 'Yes'

Apple's product line and hiring choices suggest an enterprise interest that company execs deny

On the heels of Apple's introduction of the two-way, 2GHz, G5 Xserve; the 3.5TB capacity Xserve RAID; and Xgrid technology, one might think that Apple was interested in the greater enterprise and, therefore, that the greater enterprise might be interested in Apple.

But if you take Apple at its word, the company has no long-term strategy of aiming its products beyond its traditional markets. That message was repeated every which way I posed the question to Jon Rubinstein, Apple's senior vice president of hardware engineering, when we sat down at the 2004 Macworld Conference & Expo.

In the context of an Xserve road map, I asked Rubinstein whether Apple built products with a target audience in mind. The answer was no. “It was our customers who asked us to build these products,” Rubinstein said. It seems video editors in particular wanted more performance, he added.

I pointed out that Apple does appear to be ramping up its server line. Rubinstein responded that the company is being “pushed” by its customers to build them. Those pesky video editors again, I suppose.

I asked him whether Apple wanted to increase its sales beyond the entertainment industry and the education market. This time, one of the executives in the room, Alex Grossman, director of hardware storage, jumped in and said it would be nice to make some “opportunistic sales.”

But IT doesn't make opportunistic buys.

IT, for its part, may be one of the few endeavors in which, if you build a better mousetrap, nobody cares. The key thing IT always asks itself is, Is the hardware and software good enough to support the process? Having a best-of-breed solution is typically not the No. 1 priority; making certain that the hardware and software is good enough to enable the process is.

Frankly, if Apple did more than dabble, if it went wider and deeper with an enterprise product line, there might be a market willing to put Apple on the short list, if not welcome the company with open arms.

There are a couple of other obstacles Apple faces in selling into larger markets. For one, enterprise customers don’t like to buy version-one products. They need to be tested by time. Well, Apple has a start here with its installed base. The installed base is the version-one market, and they can become reference customers.

Apple also needs to convince the enterprise that its products exist in an ecosystem. The server in itself has less value if the complementary products and applications aren't ported to go with them.

But maybe something is afoot at Apple. Last year, the company hired Oracle's former top sales honcho Sebastian Gunningham. He has a leading executive sales position at Apple.

Why would Gunningham take the spot? Name one other high-powered sales person you know who would be satisfied with making opportunistic sales only.

Apple has also extended Xserve RAID's links; it is now Windows Server- and Red Hat Linux-certified.

In the long run, the enterprise won’t make a commitment to Apple if Apple is unwilling to make one to the enterprise, and to make it publicly. Apple cannot survive by just feeding off its installed base, and the company knows it.

Move ahead or fall back, it’s the way of the business world.

Ephraim Schwartz is an editor at large at InfoWorld. He also writes the Reality Check blog.
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