Apple: Kicking Down a Back Door to the Enterprise

Sacchi's attitude is a tacit acknowledgment that innovative technologies and those offering "superior user experience" are evolving in the home market, not the business arena. "The winning strategy is about providing tools to the users that pretty much resemble what they're doing at home," he says.

This "consumerization of IT" is leading Apple (Nasdaq: AAPL) into the enterprise, albeit through the back door, says Gartner (NYSE: IT) analyst Charles Smulders.

However, might this also signal the stirrings of a bigger change -- a Mac insurrection at the enterprise level?

If there are such stirrings, they're tentative, and Apple doesn't seem to be doing much to rally the troops. "We haven't seen a pledge by Apple to increase the level of support to the enterprise," says Smulders. "They continue to say that's not a market that they're focused on."

That didn't stop Dale Frantz, CIO at Auto Warehousing, which began migrating to Macs across 23 locations enterprisewide last year. Even so, Apple's lack of corporate focus concerns him. "The biggest weakness at this point I'd say is the lack of a cohesive enterprise strategy on the part of Apple," he says.

Apple itself appears confused. Asked to discuss its enterprise strategy with Computerworld, the company vacillated for several months but finally declined. According to a spokesperson, the company does support corporate customers, but he declined to elaborate on Apple's enterprise strategy.

Apple may also need to keep its resources focused on those core areas -- the consumer, education, creative, IT, science and small business markets -- where it's seeing rapid growth. The company's strategy is simple, says Charles Edge, director of technology at 318, an IT consultancy: "Make a great computer that's standards-compliant. If enterprises want to use it, great, but if they don't, that's fine too."

It takes more than a great product to succeed as the primary personal computing platform in large businesses. "To go after the major corporate accounts, you need a savvy direct sales force [and] a dedicated service organization to take care of enterprise accounts. That's not Apple's heritage," says Tim Bajarin, president of consulting firm Creative Strategies. Even so, he says, "I'm getting more and more questions about bringing Macs into the enterprise and what it would take."

Smulders also reports a rise in inquiries from enterprise customers. The increased interest is being driven by changes in what the Mac has to offer; by Apple's success in the consumer, small business and IT professional markets and other niches; and by broader trends in the enterprise, where Windows' grip on the desktop may be starting to loosen just a bit.

Rethinking the Mac

The Mac attraction is easy to understand. On the client side, Mac OS X is relatively easy to use. The addition of new features in the latest release, Leopard, only serves to burnish that reputation. Macs are considered more stable than Windows PCs, which means fewer help desk calls, and the machines currently present fewer security problems.

However, that's not what has IT's attention.

The resurgence of interest in the Mac is a direct result of the evolution of increasingly Windows-friendly, Intel (Nasdaq: INTC) x86-based Macs and the introduction of Boot Camp, which allows a full Windows environment and its complement of applications to run natively in a separate hard drive partition on any Mac. If Apple's earlier move to Intel-based hardware had IT management rethinking the Mac's role, the full integration of Boot Camp into the Leopard release of OS X has some openly talking about it. "It changed the game," says Doug Standley, a consultant in the technology innovation strategies group at Deloitte Consulting.

Geiger Brothers already has 25 Mac users in its marketing group, but Mac use could expand in the future, says Joe Marshall, business analyst at the promotional products company. A few Macs use Parallels' virtualization software to allow access to Windows business applications, but most of Geiger's 300 PCs remain on Windows.

Boot Camp is faster than software emulation packages such as Parallels, since Windows runs directly on the hardware -- and it's free. Its integration into Leopard, Marshall says, may have leveled the playing field at Geiger and other companies. "There's a potential for Apple to make very large gains into the PC environment, and not just for graphic arts," he says.

On the server side, the constellation of Apple products -- Xserve, Leopard Server and Xsan -- is intended to serve the small-business and departmental islands of Macs in Apple's core markets. However, Apple has also beefed up some features that are important to enterprise users. Integration problems with Microsoft's (Nasdaq: MSFT) Active Directory have been resolved. Users can update their directory profiles, and digital signing is supported. The fact that OS X is based on the open Unix operating system and open standards such as Samba, NFS (Network File System), RADIUS (Remote Authentication Dial In User Service) and LDAP (Lightweight Directory Access Protocol) also makes life easier for administrators.

With these changes, says Edge, Apple is "pushing toward bigger environments."

License to Save

On the server side, Apple appears to have a licensing cost advantage. Its software licensing model was a primary reason why Frantz decided to standardize on Mac servers. Apple licenses Leopard Server on a per-server basis -- no client access licenses are required to access file-sharing, e-mail , chat, shared calendars and other basic features.

However, Apple has little momentum in larger organizations. For example, the MIT campus has about 3,000 Macs but just a few isolated Apple servers. It mostly uses Dell (Nasdaq: DELL) hardware running Windows or Linux . "I don't see [Apple] taking over the data center anytime soon," says Don Montabana, MIT's director of client support services. "You go with what works."

However, Apple's success in the home and education markets has led to burgeoning grassroots demand for Macs in many organizations, since more and more recent college graduates have Mac backgrounds these days. At Georgetown University Law Center, nearly 50 percent of the students are using Macs, up from less than 1 percent a few years ago, says CIO Pablo Molina. The same phenomenon is occurring at MIT, where 30 percent of all computers on campus are Macs, up from 20 percent last year. "This incredible rise in the use of Macs is going to put pressure on IT departments to support Macintosh PCs," Molina predicts.

Bajarin and Edge say their enterprise clients report that some new hires are lobbying for Macs. "The younger kids who grew up on Macs are frustrated with the tools they're being given," Bajarin says.

"It's a battle between corporate and the end users as to what is deployed," Smulders says. However, ultimately, the choice of personal computer is not a popularity contest. "I don't believe we've gotten to the point where users are deciding," he says.

According to Standley, legacy integration and the associated conversion costs are the primary factors keeping Macs out of the enterprise. However, those issues may be fading. As the adoption of Web technologies and virtualization increases, PC hardware and operating system are increasingly being abstracted away from existing enterprise applications, which have traditionally been closely aligned with Microsoft Windows. That has created a small opening for alternative platforms such as the Mac.

Some programs are being rewritten as Web-based applications; others have been moved to virtual environments such as Citrix (Nasdaq: CTXS) Presentation Server. The latter execute the user's applications on back-end servers and require only a browser plug-in on the client for full access. Geiger Brothers' IT staff recently rewrote a shipping application to support a Web front end -- the company's new standard. "Anything new is being coded to a browser as opposed to [Windows], for cross-platform compatibility," says Marshall.

Eventually, as the corporate PC environment becomes fully virtualized, employers won't worry about the underlying hardware and operating system. However, says Smulders, "we're still a few years away from that."

Back to Reality

Despite the Mac's promise, it still falls short for broad enterprise adoption today. For Sacchi, supportability and total cost of ownership are deal-killers. "Can Apple make the case for themselves, understand all of the CIO issues and help me solve them?" For now, he says, the answer is no.

Usually, Macs are more expensive when the purchase price and cost of support are factored in, Sacchi says. So although he's allowing Macs in, he hasn't changed his plans. "Because of the higher costs in an enterprise-level deployment, you have to have a justification in productivity. Right now, I see that only in specific niches," he says.

Smulders cautions that problems yet to be addressed include lagging support from middleware and enterprise software vendors, the complexities of adding another client hardware and software platform to the mix, and the lack of a second source for system hardware and parts.

MIT's Montabana confirms the first point. "The piece that's left is to get all of the ERP (enterprise resource planning) packages compatible with the Mac," he says. "For Oracle, SAP and [other enterprise software], the Mac clients always lag behind."

Configuring Macs to support Windows also adds complexity to the environment, with two operating systems and possibly emulation software to support. Boot Camp and virtualization software are a good interim solution for small groups of Mac users that need access to a few Windows applications, but Molina doesn't see that as a long-term strategy for larger populations.

Edge recommends using Citrix Presentation Server, rather than relying on Boot Camp or emulation software such as Parallels or VMware Fusion. "It's a lot cheaper to buy an Active Directory license and a Citrix license than to buy a copy of Parallels and XP or Vista and a copy of the application," he says.

However, companies with enterprise licensing agreements don't have to worry about extra Windows licenses because they've already paid for them, says Marshall. However, Parallels does represent an incremental licensing expense; it costs US$80 per Mac before volume discounts.

Still, that's not Molina's point. "It's not the cost but the complexity of maintaining all of those environments. I don't see that as a viable mainstream option. You either stay in Windows or you switch to Macs," he says.

Another concern is that Apple has sometimes had trouble meeting demand for equipment and parts. Its forays into licensing its hardware to third parties -- first with the Mac and more recently with its iPod -- have not fared well.

Sacchi says finding an alternative source for parts is not a big deal for one department with a few Macs. "But if somebody is thinking about a complete enterprise replacement, that would be a concern," he adds.

When deploying Macs at scale, IT can't afford to be held hostage to a single vendor's supply chain problems. "Compared to where they were five years ago, [Apple's] supply chain and manufacturing is much tighter," Bajarin says. However, MIT is experiencing problems right now. "Getting parts from Apple can be a very, very difficult process. It can take weeks," Montabana says. In contrast, his PC vendors deliver parts the next business day.

Service and support are also hurdles. "You're transferring to a platform from a vendor that's not committed to supporting large enterprise needs. From what we've seen, the tools available and the support are not enterprise-class," Smulders says.

"In my mind, the service level has dropped from what it used to be," says Jim Quinlan, president of sporting goods retailer Jax in Fort Collins, Colo., which runs its business on Mac hardware and software. With no local Apple reseller, Jax must ship equipment back to Apple for service. If he can't wait, he must travel 70 miles to the nearest Apple store.

Edge points out that Apple offers enhanced support for larger customers, but the $50,000 price tag is high.

Quinlan doesn't plan to abandon the Mac. He says he has had no virus problems, the intuitive interface creates fewer support issues, and the hardware has been reliable. However, most large businesses will likely remain insurrection-free for the foreseeable future. "I don't think you'll see a significant penetration into the enterprise until Apple makes the strategic decision to go after that," says Bajarin.

On the other hand, if Apple continues to see more interest at the IT level, he says, "they'll adjust."