Accounting for Apple's New Respect

Apple Computer (Nasdaq: AAPL) is used to name-calling. Macs have been dismissed as geek machines, used by members of a cult-like community who appreciate design over function and an eye-candy interface over simpler, more humble graphics.

However, that image has slowly begun to fade. Now, Apple is going after its toughest audience yet: IT managers.

This is not the first time Apple has tried to crack the corporate market, but in this round, the company has eschewed splashy, dramatic efforts. It is focusing instead on quietly gaining respect among Windows-centric customers.

The company's not-so-secret weapon is Xserve, a powerful and inexpensive server that could land on IT wish lists -- if Apple plays its cards right.

Fresh Fruit

Recently, Apple announced a new advertising and marketing strategy designed to lure consumers away from Windows. Heavily dependent on footage of "real people" wrinkling their noses with disgust at using Wintel-based machines, the ads could spark more interest in Apple's consumer line.

But the company is taking a more low-key approach to targeting corporate users, hoping that the technology speaks for itself.

"We want to be humble going in," Alex Grossman, Apple's director of server and storage hardware, told the E-Commerce Times. "We think we're going to have the best system going, but we want to make sure we position this correctly."

Although the company is cagey about its marketing strategy, it is eager to boast about its product.

The Xserve possesses nice specs: The top-of-the-line model comes with dual 1 GHz G4 processors, 2 MB DDR L3 cache per chip, 480 GB storage capacity and a Unix-based server operating system, all in a rack-mounted machine that looks vaguely like a control panel from the movie "2001: A Space Odyssey."

Take My Server, Please

The most compelling number for IT departments could be the Xserve's price tag. At US$2,999, the server is competitively priced, and it comes with a cost-savings kicker: an unlimited client license.

Other servers charge per user, which means companies often end up paying more for licensing than for hardware.

Tom Goguen, Apple's director of server software, told the E-Commerce Times that such an arrangement could make a big difference in IT managers' minds. Also, he said, managers might be swayed simply by being around Macs in the enterprise.

"In reality, Apple already has a presence in larger corporations, mostly in creative departments," he said. "The thing is that most larger companies use Unix, and Mac fits right into that environment, so it should be getting attention in other departments as well."

Worm in the Apple

But having a great product does not confer automatic recognition.

"Enterprise customers are accustomed to buying servers from places like HP (NYSE: HPQ) and Dell (Nasdaq: DELL)," Michael Gartenberg, research director at Jupiter Media Metrix, told the E-Commerce Times. "Apple is not even on their radar."

The problem, it seems, is with perception rather than technology. To sell the latter, Apple will have to change the former.

"The truth is," Gartenberg said, "enterprises could easily adopt Apple if they want."

Tough Challenge

So, even with its technology and design strengths, Apple still faces a tough challenge in convincing IT managers to sign on the dotted line.

"Mac users used to view computing as a religion, not a business plan," Gartenberg said. "Many IT managers still think of Apple in that way, and in a very tough economic situation like we're in, you're not going to see them taking a risk to adopt a technology they still look at with disdain."

Does that mean Apple should forgo its enterprise ambitions and content itself with keeping graphic designers and school principals happy? Not at all, according to Gartenberg.

"The way they're going about this makes sense," he said. "They're dipping their toe in the water this time, taking it slowly. It's going to be a very tough battle, but there's no doubt that the enterprise is where the big money is, so it's logical that they're headed in that direction."