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Most Apple (Nasdaq: AAPL) fans will remember 2004 for the iPod and Apple's presence in the digital entertainment sector. However, while Apple's resounding success in that sector is starting to etch away at the mentality that the company is a minor player in technology, it has also overshadowed its burgeoning play in the enterprise market.
Certainly, enterprise is nothing new to Apple, considering its penetration in academia, entertainment and the sciences. However, until recently, market share among those Apple loyalists was largely considered a niche play, with Apple seen as a specialist in these sectors without serious competition.
Now that perception might be changing.
OS X Success
In large part it's all thanks to the success of Mac OS X and the emergence and steady growth of the Xserve line. The UNIX underpinnings of OS X and Apple's competitive server-side solutions have proven that the Mac maker can expand its established customer bases and pursue new markets.
Although the numbers show that Apple sells a fraction of the servers that HP (NYSE: HPQ) or Dell (Nasdaq: DELL) do on a quarterly basis, analyst coverage from organizations such as Gartner and IDC are taking note.
In addition, several important enterprise veterans started paying attention to Apple in the past year by bringing third-party solutions to the platform, which is critical for driving growth and drawing attention from corporate IT managers.
Important developments include: Oracle's (Nasdaq: ORCL) announcement of its flagship 10g database and grid computing solution for OS X; certification of the Safari Web browser by PeopleSoft and NetSuite in the CRM field; and a move by Sybase (NYSE: SY), the number four database maker in the U.S., to bring its relational database to the platform.
Pricing Policy
Apple representatives declined to comment on its current enterprise pursuits for this story. However, company officials have gone on record this year revealing strategies that will help them gain ground in the elusive corporate enterprise -- just in time, as IT managers recover from several years of constrained budgets.
Central to Apple's attack is pricing. That means eliminating licensing worries by offering unlimited seat pricing on OS X server; introducing an Xserve hardware package that puts its Intel (Nasdaq: INTC) counterpart's feet to the fire by way of technical specifications and cost; and a pricing package for a hardware/software based SAN (storage area network) that one analyst has called "spectacular."
Also, Apple might be looking to take its enterprise case even further with the upcoming desktop and server release of OS X Tiger in 2005.
When combined with the G5 Xserve and Macintosh, Tiger brings serious 64-bit computing to the market. Moreover, Tiger brings a new level of interoperability with multiple platforms, including perhaps most importantly what looks to be a rock solid implementation of Open Directory for integration with Microsoft's (Nasdaq: MSFT) Active Directory services.
With competition for market share as heated as ever, Apple's peers are looking to retain, regain and/or survive. There's Microsoft's battle with Linux, as well as Sun Microsystems' effort to rebirth Solaris as a serious option for a larger crowd.
IBM's Refocus
Perhaps the most interesting move, though, is IBM's (NYSE: IBM) departure from the desktop PC market. While PCs have been a revenue channel for IBM, the company has shifted its vision to the Power PC platform and its massive services arm. Since Apple is based on the Power PC platform, one could speculate that IBM's concentration on this area means that more companies might begin to adopt IBM's architecture. That could lead to a great deal more enterprise opportunities for Apple's own wares, considering OS X's close ties to Linux, the apple of IBM's eye.
Though the numbers do not yet come near other seasoned competitors in the enterprise space, Apple can no longer be dismissed as a poseur. Its hardware and software offerings match or exceed its competitors' and the company is slowly becoming a darling to the open-source community -- a critical factor in an evolving enterprise universe.
