Apple lacks broad corporate strategy but sees gains

Apple's iPhones and Macs are gaining in the enterprise despite the company's consumer focus.

You won't hear much talk about corporate IT at Apple's MacWorld Conference this week, but the maker of the iPhone and the Mac is nonetheless making steady progress in the enterprise technology world.

More companies are bringing Macs within their networks and increasing support for the iPhone, recent surveys show. Macs are generally pricier than Windows PCs but an increasing number of companies are letting employees choose their own desktops and many of them are choosing Macs, says Pund-IT analyst Charles King.

"We're seeing an increasing number of companies that are allowing their employees much broader latitude in the computers they use for business," King says. "Personally, I'm seeing more and more Macs on the road when I travel."

Several surveys back up King's statement. In one report Forrester Research chided Apple for not having an enterprise strategy, but said Mac usage among Forrester clients has still quadrupled since October 2006, moving from 1.1 to 4.5 percent of desktops.

"Apple's singular focus on user experience has resulted in some success in the enterprise -- without even trying to break into the market," Forrester analyst Benjamin Gray writes. Gray says the success of the iPhone is driving desktop operations professionals to seek better end-to-end experiences with the Mac, and younger, tech-savvy workers are choosing Macs because they feel the Apple computers enhance productivity.

While Macs represent fewer than one in 20 corporate desktops, more than two-thirds of companies responding to a survey by ITIC analyst Laura DiDio say they are likely to let users deploy Macs within the next year. Nearly one-quarter of the 700 survey participants had at least 50 Macintoshes in their organizations, DiDio writes.

Moreover, 50 percent of ITIC survey respondents plan to increase integration with Apple consumer products such as the iPhone to give users access to corporate e-mail and other applications, DiDio writes.

When the iPhone first appeared, analysts at Gartner warned enterprises that the device lacked crucial security features and support for widely used e-mail systems such as Microsoft Exchange.

King says he's not convinced the iPhone offers productivity benefits over the BlackBerry, but says concerns about merging the iPhone with existing e-mail systems seem to have disappeared.

Forrester predicts that 10% of small and midsize businesses (SMB) will deploy iPhones in 2009, but adoption won't be as strong among large enterprises, which have stricter IT requirements.

"Now that the iPhone 3G supports Microsoft Exchange ActiveSync, push e-mail, contacts and calendar, and can be remotely wiped if lost or stolen, it does indeed address key business mobility requirements," Forrester analyst Michele Pelino writes. "As a result, we believe that the iPhone will make a more significant dent in the enterprise mobility market, primarily among SMBs, which typically don't have as strict IT requirements as large enterprises or widespread line-of-business application deployments."

Apple has not had as much success with its line of business servers, including the Mac OS X Server, the Mac Pro and Xserve.

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Apple's server revenue market share was just one-tenth of one percent in the third quarter of 2008, with revenue of US$13 million on 7,403 server shipments, according to Gartner data. Apple's number of shipments was higher than in 2007 but revenue still dropped slightly.

Apple recently lured server expert Mark Papermaster away from IBM, where he had worked for 26 years and was the company's top official working on Power microprocessors and the vice president of IBM's blade server development unit.

IBM sued Apple to block it from hiring Papermaster, saying he had signed a noncompetition agreement and that Apple competes against IBM in developing servers, PCs and microprocessors.

The case is still working its way through court, but Apple says it hired Papermaster not to help it develop better servers but to lead engineering for iPods and iPhones. Apple may want to tap Papermaster's market and partnering expertise to broaden the reach of the iPhone further into the enterprise, says Gartner analyst Jeffrey Hewitt.

In terms of servers, Apple has made multiple attempts over the years to penetrate that market with limited success, says Forrester analyst James Staten. The servers are attractive for needs such as video and photo editing and publishing, and video game development, he says. IT folks who already use Mac desktops sometimes want a "Mac-like server" that's easy to use and install, Hewitt adds.

But while Apple servers are competitive in terms of horsepower they don't meet typical enterprise standards, according to Staten, who notes a lack of integration with remote management tools that make it easier to identify failures and potential fixes.

It's a big leap to assume an Apple would be able to become a Tier 1 server provider," he says.