On the surface, USAA looks like a prime example of how Apple is making new inroads into large enterprises. The financial services company has deployed more than 500 iPhones and 300 iPads, has about 200 Macintosh computers, and it's considering bringing in more Macs to displace some of its Windows desktops.
San Antonio-based USAA has also released a customer-facing app for iPhones and iPads, and it's considering developing others for internal use. "There seems to be a simmering demand for them, and some good business cases," says Mike Pansini, assistant vice president of IT infrastructure architecture at USAA.
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But as is the case at many large companies, USAA's relationship with Apple is more measured than it might first appear.
The iPhones and iPads have been limited to the executive management group -- USAA has no plans at present to expand their use more broadly -- and its 200 Mac desktops and laptops, mostly used by developers, represent a small fraction of USAA's inventory of personal computers. The rest of its information workers -- some 23,000 people -- remain solidly on the Windows platform.
It's certainly true that Apple is making inroads into large enterprises. In a recent Computerworld survey of 367 IT managers, 73 percent of the respondents said they're providing or supporting Apple products in some way. But 25 percent still aren't supporting even one iPhone, Mac or iPad (and 2 percent didn't know if they were). The 143 largest enterprises in the survey -- those with more than 1,000 employees -- had the same ratio: 73 percent support an Apple product; 27 percent don't.
Although many enterprise IT organizations are accommodating user-owned or company-issued iPads and iPhones, they're providing carefully controlled access to a limited set of corporate IT resources, such as the Internet and corporate email.
Apple is also making headway with corporate desktops and laptops: 55 percent of the survey respondents support at least one Mac, and 60 percent support MacBooks. But in most of those cases, the IT shops are supporting 100 or fewer Apple machines. And the Mac's penetration into large businesses is miniscule when compared with the number of Windows-based machines ordered each year.
Furthermore, IT managers say Apple isn't always supportive of their needs, and the Computerworld survey shows that many of the obstacles Macs have always faced in large organizations still exist, including the following:
- Mac versions of enterprise applications either don't exist or lag behind releases for Windows.
- There are few tools for managing Macs on a large scale and integrating them into a Windows-centric enterprise.
- The perception remains that Apple products are expensive.
- IT managers say that service and support options aren't up to enterprise standards.
- Apple doesn't provide a product road map to help IT managers make plans.
- Enterprises have limited opportunities to negotiate prices for Apple products.
At the same time, the survey and interviews with enterprise IT executives indicate that Apple's position has improved in some areas:
- More businesses are buying or building platform-agnostic applications that can accommodate Apple products.
- Enterprise-class management tools for Apple products continue to evolve.
- Apple's prices are becoming more competitive.
- The trend toward Web-based enterprise applications has made integrating Apple products easier.
- In the tablet market, competitors arguably have yet to offer a product that's a better value than the iPad.
Apple still doesn't play in the low end of the desktop and laptop markets, but it's much more competitive than it once was on the types of units enterprises tend to buy, says Laura DiDio, an analyst at market research firm Information Technology Intelligence Consulting (ITIC). Mac products, which once sold for a 30 percent premium over comparable PCs, have come down to earth. "Apple doesn't get a lot of credit for that," she says.
But IT executives tend to see Apple as a provider of consumer-oriented devices, not a full-on enterprise partner. "In the Windows space, we've got a full-time Microsoft support team that is very engaged in what we do. With Apple, they haven't matured into that yet," says USAA's Pansini.
On the desktop side of the business, an iPhone/iPad "halo effect" may have been partially responsible for a 255 percent increase in Mac desktop and MacBook sales to enterprises in 2010, as reported by IDC. But that figure is somewhat misleading. Shipments of Mac products to large businesses still represent less than 2 percent of the overall enterprise PC market in the U.S., according to IDC figures. "Apple's market share is absolutely insignificant," says IDC analyst David Daoud.
Nonetheless, Mac sales to the enterprise are up sharply, relatively speaking. More than a quarter (27 percent) of the Computerworld survey's enterprise IT respondents who support Apple products said support for iOS devices had either sparked interest in adopting Macs or had resulted in greater adoption of Macs. "I wouldn't say they're buying Macs in droves," says Gartner analyst Michael Silver. "But more Macs are being supported as part of bring-your-own-computer initiatives."
However, when it comes to media tablets, Apple's iPad owns the category, accounting for more than 90 percent of the 300,000 units shipped in the U.S. for commercial use in 2010. Increasingly, users are picking their own smartphones and tablets and are asking to use them for work. IDC expects the number of commercial shipments of media tablets to jump to 1.3 million this year. "It's become an unstoppable force," says Silver. "It's gotten harder to say no."
While most large organizations aren't supporting large-scale deployments of Apple products, Genentech is an exception. The IT department at the South San Francisco-based biotech company supports more than 2,500 Macintosh computers -- about half of the desktop population -- and some 8,000 iPhones. And it has made the most of user interest in iPads and iPhones, developing apps for tasks ranging from CRM to purchase order approvals and expense reporting.
That's driven in part by the fact that Genentech allows users to choose their own desktop computers. Even so, Macs tend to be used in groups that are less dependent on Windows applications, such as sales, marketing and research. "It's more challenging to deploy the OS X platform in other areas," says enterprise architect David Lee, although Genentech does support some Macs that need access to Windows applications by using virtualization software such as Citrix XenDesktop or VMware Fusion. That software layer, however, adds complexity and cost.
"Our No. 1 recommendation is to look at the applications first," Silver says. "If users need access to Windows applications, they should be running a Windows machine."
Mike Reed, an Apple solutions practice manager at IT services provider Forsythe Solutions Group, sees it differently, arguing that having parallel applications isn't always necessary. For example, Microsoft Vizio files can be read by OmniGraffle on the Mac. "It's less about the app and more about interacting with the data," he says.
Whispering to the enterprise
Faced with the need to respond to a steady uptake of its products by large businesses, Apple has quietly restructured its enterprise division, focusing more narrowly on "Fortune-level" companies and pushing more of its enterprise business through the reseller channel and its own online sales group, according to an executive at one of Apple's business partners, who spoke on the condition that he not be identified. "They don't have as large a sales force focused on the enterprise as they used to," he says.
Unlike the way other vendors approach the enterprise market, Apple's strategy is to pursue more of a "whisper" campaign. When contacted for this story, Apple declined to comment or even acknowledge the existence of its enterprise program, let alone explain the services it provides to its largest business customers.
Although Apple doesn't want to talk about it, enterprise customers and service providers say that the company does indeed have an organization that caters to the enterprise and that it typically assigns a dedicated account representative, sends an engineer to the customer site for an initial assessment and provides some integration services.
"Apple does a terrific job of tech support for its own devices in a corporate setting, but integration and interoperability with other platforms can be problematic," DiDio says. "They realized that they had to have an enterprise strategy." Last year, Apple created a new business partner certification, the Apple Authorized System Integrator, and anointed four companies -- Forsythe Solutions Group, Milestone Technologies, Agilex and Unisys -- to handle most of that integration and support work.
For technical support, however, corporate IT shops still need an AppleCare Preferred or Alliance agreement. "They'll fly an engineer out to our business to get the lay of the land. But they're not stopping on your doorstep any time you have a problem," says Ben Greisler, principal at Kadimac Corp., an Apple professional services provider. Some enterprise customers work with Apple's telesales group or Apple's retail stores.
"We're seeing an expansion of business-related services across all touch points, whether it's service or sales or retail," says Reed. Taken together, he says, "it's the 'enterprization' of Apple."
Perhaps. But Apple's enterprise strategy is still immature, IT executives say. "They're most interested in selling product and not in adapting how they do business to meet the needs of the enterprise," says a vice president of IT at a Fortune 100 company that uses both Apple mobile and desktop products, who declined to be identified.
Mum's the word
Apple's legendary secrecy -- its unwillingness to share its product road map, even under nondisclosure agreements -- makes Andy Wang's job harder. Wang is an enterprise architect at Genentech. "Part of my job is to plan 12 to 36 months out. When you don't get anything from Apple, that makes for challenging planning," he says. IT executives regularly receive such briefings from vendors like Microsoft and Hewlett-Packard.
"With HP, we know what's coming out six to 12 months from now. With Apple, you don't have a clue," says Michael Kamer, manager of technology integration services at St. Luke's Health System, a healthcare provider in the Kansas City, Mo., area that's testing a system that would let doctors access clinical apps from their own iPads.
"We're guessing which capabilities will be available when," adds Greg Schwartz, senior vice president and CIO at USAA. After the iPad 2 was released, USAA began work on a new version of an online banking app that lets iPad 2 users photograph and submit checks for deposit using the built-in camera. "We didn't know when the iPad 2 was going to be released. Otherwise, we would have had it ready," he says.
Apple's consumer-focused approach to product licensing and support also creates headaches. Although Genentech has developed its own iPhone apps and delivers them through an internal app store, it still must renew its certification for those applications with Apple every year. "That's very tedious," says enterprise architect David Lee. "We have a cordial and collaborative relationship, but enterprises are treated more like consumers."
Apple also lacks a corporate account model that enterprise customers can use to centrally manage the acquisition of software from its Mac App Store. Instead, each purchase is tied to an iTunes account, which in turn is tied to an individual and that person's email address, rather than to a role or physical device. (Apple does have a corporate purchasing system for iOS apps, which it debuted in July for U.S. customers.)
"The enterprise has fundamental issues here. You don't want to have an individual account per device for the licensing and management of apps," says Mark White, CTO of Deloitte Consulting's technology practice.
But for now, that's exactly what many businesses do.
Other businesses have negotiated directly with software vendors, bypassing the iTunes store. "It's not a generally solved problem yet," says White -- for any of the mobile vendors.
Enterprise-class security is another concern. At St. Luke's, protecting data on iOS devices is a big issue. Kamer says the iPad doesn't natively support the FIPS 140-2 encryption standard, so he has to work around that. "That's one reason why we don't allow them on our internal network," he says.
Management tools: A big obstacle
Unlike Microsoft, Apple doesn't offer a suite of management tools for its products, relying instead on third-party vendors and integrators to pull together a framework for securing and managing Apple devices at the enterprise level.
"Many of the Mac-based tools are built by small or lesser-known third-party ISVs, and many of those are smaller, point-type solutions, which may not scale in an enterprise setting," says ITIC analyst DiDio.