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Apple follows the money

Apple follows the money

The Mac maker knows which side its bread is buttered on, and it's not the enterprise.

I recently attended the latest Macworld Expo in San Francisco, and the good news is Apple is no longer pretending it is interested in becoming an enterprise player. There were hints from previous events that with Xserve, new disk arrays for storage, and Mac OS X as Unix in disguise, Apple was slowly and steadily tilting in the enterprise direction. This year's show put the lie to any such thoughts.

There were no Xserve, storage, or networking announcements from Apple this year, with the possible exception that CEO, Steve Jobs, said all Mac products would transition to Intel processors, which might tick off the fairly sizable group of Mac users in the scientific community who like the PowerPC chip just fine. Neither were there any major enterprise software vendors in attendance in support of the Mac platform.

Rather, Jobs was 100 per cent focused on consumers, showing new features in Apple's iLife '06 package, including iPhoto, iTunes, iMovie, iDVD, GarageBand, and the new iWeb for creating Web pages.

The only other vendor onstage was Intel, another company that has seen the light and is now targeting consumers in a major way. As part of a company-wide reorganisation in January, Intel formed the Digital Home Group to focus on developing consumer products.

I quickly realised that Apple's consumer strategy is not unlike IBM's enterprise strategy; both see their future as facilitators, by which I mean each wants to be the premier middleware vendor for its marketplace. IBM claims that by using "WebSphere Everything", companies can connect and integrate any enterprise application and any data to any other application or Web service, making the actual apps themselves far less important.

Apple is doing something quite similar. iLife becomes the middleware that works with any digital camera, any DVD, any video camera. It downloads almost every music CD, it works with every musical instrument, and now it allows you to create your own software portal with iWeb. And iWeb does not require Apple feeds; it will work with any RSS technology.

In essence, Apple is saying, "All of that consumer electronics gear is unimportant. Get the equipment you want at the best price. We'll take care of the hard stuff that makes using it worthwhile." If Apple can convince consumers that the Mac is the link that allows them to easily access all of their electronic gadgets, it will have pulled off quite a coup. By blending high tech and consumer electronics like nobody else, Apple reduces vendors like Hitachi, Samsung and Sony to mere hardware shadows, waiting to be commoditised.

And on the high-tech side, any pretence that Microsoft knows how to appeal to the consumer with its Windows Media Center, another facilitator wannabe, was blown away by what Jobs showed off at this year's show. Like IBM, Apple appears to understand that in a world of cheap labour and commoditised products, service becomes the competitive differentiator.

But there is also a darker interpretation of what Apple and Intel are doing. Is it too far-fetched to imagine that the titans of high tech are enviously eyeing the money to be made from millions of consumer customers, rather than thousands of enterprise ones? Will this result in enterprise innovation taking a back seat to R&D dollars spent on finding the next iPod? Stranger things have happened.


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