SPECIAL REPORT
Shedding Light on Apple's Enterprise Movements

Analyzing failures, successes and statistics surrounding Apple can be an inexact science due to the powerful shroud over company data delineating business versus consumer business. However, a close look at its SEC filings, IDC market data and comments from Apple watchers may shed some light on a fuzzy picture.

The Numbers in 2004

For the first six months this year, Apple saw growth in its product lines positioned for enterprise use, including notebooks, desktops and servers. The company shipped 377,000 Powerbooks, 441,000 iBooks and 347,000 PowerMacs, Xserve sales being lumped into the latter category.

For its third quarter, the company disclosed it had sold 13,000 Xserves, a number sure to rise in light of the recent high-profile sales like the MACH 5, a G5 Xserve cluster of 1,566 servers sold to COLSA of Alabama for US military research.

Apple's desktop market share continues to dance between 2 percent and 5 percent depending the markets evaluated. According to IDC research, the worldwide market for PC's in the commercial marketplace was 17 million in the first quarter of this year (29 million when adding in consumers), which puts Apple's PC shipments during this period at around 2.5 percent.

An Apple spokesperson suggested to MacNewsWorld that the company does not break down statistics by business sectors, only tracking total units sold.

Unfamiliar Territory?

Much of Apple's successes have come through leveraging traditional channels that welcome Mac hardware and software, namely academia, research and science, and the creative entertainment industry.

Gordon Haff, senior analyst at Illuminata, said he believes some of that company's recent high performance computing wins may help it bridge a path to traditional IT buyers outside of the company's safe-haven markets, but cautions that the corporate enterprise is still new ground.

"High-performance computing has historically been quite disconnected from corporate IT as a whole," Haff said. "So, while Apple has enjoyed considerable, and some would say surprising, success in HPC that won't necessarily translate to other areas of the enterprise where the buying criteria and behavior are quite different."

Haff does suggest they can leverage the credibility being built around their product line to turn smaller wins.

Linux Advantage for Apple?

Apple's commitment to the open-source community was cemented with the release of OS X, and by releasing Darwin, the custom Unix variant powering the operating system (OS). The company has since cultivated a large portfolio of well-known open-source tools that includes OS X. Some commentators over the past few years have even suggested that Linux running on Apple hardware might be a doorway into corporate IT environments.

IDC analyst Al Gillen, coauthor of a report projecting server operating system sales from 2002 through 2007, suggests in the data that Apple's Mac OS share will drop during the period. However, Gillen also paints a picture of opportunity for Apple in seasoned IT staff capable on Linux and Unix who could be lured to OS X.

"IDC expects the pool of IT professionals with Linux skills to increase substantially during the forecast period. Professionals in Unix environments can easily make the transition, which is built on a similar -- but not identical -- kernel," Gillen wrote.

Communicating a Roadmap

Recently, much has been made of the "veil of secrecy" at Apple, which holds back key announcements and future product plans from public consumption, and in turn also from the enterprise, in many cases.

Apple recently broke somewhat with that tradition and spoke publicly about the G5 iMac, a previously unannounced product. However, according to Haff and Yankee Group senior analyst Laura DiDio, current and future plans with detailed depth are the only way into the hearts of corporate IT buyers.

DiDio, commenting on Linux rather than Apple, suggested that non-traditional OS platforms will find their way into the enterprise only at the periphery until a strong proposition exists to drive migration.

"The costs of migrating away to a new platform are substantial and may not find themselves in the corporate IT budget process until substantive due diligence has been performed on them in the enterprise," DiDio said.

Haff said while buzz and mystery may work with consumers, those with corporate budgets and checkbooks want future planning mapped out for them to consider.

"With respect to marketing, the techniques that sell iPods are quite different from the techniques that sell Xserves. Consumers are fine with buzz-generating surprises. Server buyers want roadmaps and predictability," Haff added.