Can Apple Compete in the Enterprise?

Once upon a time Apple had an incredible opportunity to play in the data center space. When the XServe RAID came out not only was it beautiful to look at (something you don’t normally think about when it comes to storage) but as a low-cost, Tier-2 or -3 array it made a very popular splash. At one point (in terms of TB shipped), Apple was the 4th largest storage vendor in the world.

Now, however, it’s a different story. The industry has changed drastically, the players have shifted and converged, and Apple is restricted in playing in the data center sphere where it once had promise (no pun intended). While it’s sort-of-in, sort-of-out at the moment, it doesn’t have to be that way. Apple could once again play a significant role in the Enterprise space… by breaking itself apart.

Heresy! I hear you cry! Heathen! Heretic! Patience, child, and I shall explain.

Since Apple played out its hand in the Enterprise data center space, tremendous changes have taken place. Cisco has unveiled the UCS “California” project, VMware is in 100% of the Fortune 100 companies, and HP has dominated the server space (and declared war on Cisco).

Apple’s Xserve are beautifully constructed boxes, extremely powerful, very pretty, and highly cost-effective. They’re also completely ignored in the data center.

Apple’s administration tools are the best I’ve ever seen. Elegant, intuitive, easy-to-use… and completely ignored in the data center. If convergence is the key, with virtualized servers, storage, and networks dominating the “green initiative” in the data center, where could Apple possibly fit when they don’t play well with virtualized environments?

Part of the reason why Apple lost any inertia within the DC has been because of the way it handled its DC approach. In the enterprise world, OEM vendors work through a interconnected series of VARs, channel partners, as well as direct sales. They provide tiered-levels of relationships that include long-term roadmaps, technology refreshes and updates, joint promotions, and a communication style that facilitates a (relatively) open dialogue.

Does this sound like Apple? Not just no, hell no.

The idea that Apple would provide a technology refresh to its channel partners (what channel partners, exactly, would that be?) is laughable. Apple doesn’t even tell its own Salespeople and System Engineers what’s going to be announced in the Enterprise product launch. Why the hell would it tell a channel partner?

No, the entire model does not lend itself to adequate competition within the Enterprise space. What this means is that given the trends of DC – movement towards virtualization-centric technology (servers & storage), converged networks, and the role of VARs in making it all work together – Apple will ultimately wind up creating ad-hoc tools for an increasingly niche market (moreso than it does already). Ultimately Apple will wind up realizing that the cost-benefit ratio is no longer in their best interest and drop the Enterprise line.

It doesn’t have to be that way, however. There is precedent that can show how Apple can regain a fighting foothold within the DC. It helps if we look at a parallel situation from not too long ago from another industry – Disney.

In the early 1980s, Disney was in trouble. The brand name had rusted a bit, as the company had lost its creative direction and vision after Walt’s death in the mid-’60s. By 1984 the company had barely fought off a takeover attempt from a corporate raider, and seriously needed to broaden its vision in order to successfully compete (and, ultimately thrive).

There was an internal cultural battle, however. Much the same way Apple sees itself, the Disney culture was perceived to be unique, untouchable. Whatever happened the brand name of Disney meant oodles of cash only if it remained pristine and undiluted.

The plan was radical. Start making movies that adults would see, branch out into areas that the Disney name couldn’t normally go, and pick up on markets that had been ignored. Wholly-owned subsidiaries Hollywood Pictures and Touchstone Pictures were created. Disney didn’t hide the fact that they were owned by the Mouse House, but they didn’t promote it either.

In the mid-’80s, Touchstone released a string of hits that would never have been possible under the Disney brand name. By separating out these additional companies Disney was able to play in television, radio, film, newspapers, and online content in ways that cemented the company’s place among media conglomerates, going from a niche studio to a media monolith in less than 10 years.

See the parallels?

If Apple were to break off the Enterprise group into its own company with heavy R&D funding, not just for the technology but also for the cottage industry infrastructure, invest in a true channel program, invest in virtualization roadmaps, and qualify some storage that actually works (*ahem* Active Storage *ahem*), Apple would actually have a chance at influencing the DC market. After all, most admins are dying for set-and-forget-it technology.

A subsidiary would be able to make its own relationships without being forced into the cone of silence that is the consumer division. An obvious speedbump would be OSX, which runs both the consumer and enterprise Macs, but at this stage that’s practically a mere logistical problem.

The bigger problem, and why the likelihood of this happening is next-to-nil, is because it would require Apple to see itself as something other than what it is (culturally). Apple is not a computer company, and has never been one. Apple is a style company, and a lifestyle company. Apple is a company that demands quality control (control being the operative word), which gives them pause when engaging in interoperability agreements with other vendors.

Nevertheless, at some point soon Apple will have to make a go/no go decision about the Enterprise, and it would be a shame to see such brilliance shut down due to capriciousness.

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1 Comment

  • No More (Apple) Kool-Aid For Me, Thanks « J Metz's Blog June 8, 2010 at 11:56

    […] had a few thoughts of my own about how it might be able to compete in an area they currently only barely acknowledge they serve. But one of the reasons why I’ve loved the company – and its products – is […]

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