Apple: an enterprise giant, hiding in plain sight

Credit: ActiveSteve via Flickr

Apple's earnings report last week generated a lot of interesting events and discussion. The fact that Apple's growth in some key areas appears to be slowing -- lower than expected iPhone 5 sales, a contraction of Mac sales from the year ago quarter, and revenue that was flat compared to the previous year's holiday quarter -- spooked investors. Apple fans, and even Apple's CEO, were quick to point out that Apple's iPhone and iPad sales for the quarter were still record setting numbers for Apple and the technology industry.

As Tim Cook put it to Apple employees  “we [Apple] just had the best quarter of any technology company ever.”

I'll leave the debate over whether or not the decline in Apple's stock price is justified to others. But the fear that Apple's growth has peaked may be justified.

The iPhone and iPad have generated an immense amount of growth for Apple in its core markets, like the consumer mobile technology market in North America (the same can be said for Android and Samsung). At some point, those markets will become saturated, meaning that virtually every person who wants and can afford an iOS device will own one. 

So given this eventual saturation in its core markets, what can Apple do to keep growing?

  • Expand into new geographical markets, which it is doing in China -- Apple CEO Tim Cook recently predicted that China will become Apple's biggest and most important market.
  • Come up with more major market disruptions like the iPad (which turned the consumer PC market on its head), the iPod/iTunes combination, and the iPhone.
  • Make a big play for existing markets where it has made small inroads -- the biggest of which is the business and enterprise computing market, where BYOD programs have helped Apple create a foothold for future growth.

The most interesting of those options is the enterprise market.

The timing couldn't be better for Apple to mount a serious campaign for the workplace. BYOD programs are already integrating Apple products into many businesses, Windows 8 is off to a slow start, many IT professionals still see iOS as a better corporate citizen than Android, and the overarching consumerization trend is still redefining the relationship between employee and technology.

There are, however, three big questions that one has to ask before presuming that Apple can make the enterprise its next big market.

  • How much enterprise potential does Apple possess today?
  • What can Apple do to broaden its enterprise sales?
  • Is Apple willing to make a play for the enterprise?

Apple's enterprise credibility

Having spent much of the past decade covering Apple technologies in the enterprise, small business, and education markets, there's one thing that has always seemed a little odd and sadly ironic to me. The Apple IT experience is unique, but largely invisible.

Mainstream IT professionals have tended to avoid Apple products as much as possible, leaving them without skill sets around Macs and iOS devices. At the same time, Apple fans and even power users rarely pay attention to enterprise IT needs like mass deployment, client or device management, and integrating Macs and iPhones and iPads with enterprise systems like Active Directory or Exchange.

So while Apple has spent years developing enterprise functionality, it didn't get noticed very broadly. The skills, products, and and support needed to integrate Apple solutions with enterprise IT are available, but finding them can be a challenge.

Things seem to be changing, however. Annual events like the MacIT conference that will run this week alongside MacWorld/iWorld, the European Mac SysAdmin's conference, the Penn State MacAdmin's Conference, and the MacTech conference are becoming more high profile events. While none of these events are put on by Apple, they are still excellent resources and most of their content is available even if you can't attend the events themselves (some of it is even free).

The biggest change in the Apple-enterprise relationship began in 2010 when Apple started building MDM and security capabilities into iOS -- and opened that architecture to third party vendors.

Around the same time, Apple announced it was killing off the last of its enterprise hardware -- the rack mount Xserve server. In 2011 and 2012, Apple also morphed its server OS (OS X Server) into a solution predominantly designed for small business. While that was a step back from the days when Apple sold a complete end-to-end enterprise solution, it was a step forward into opening up to third party vendors and a focus on delivering enterprise capabilities directly in its consumer products. After all, there is no "iPhone Pro" or "Workplace Mac" -- the consumer products already support Exchange, device or client management, and other key technologies. What isn't built-in can be added via third party products.

It's worth pointing out here that iPhones didn't become commonplace in most companies until after Apple delivered support for enterprise requirements like whole device encryption, MDM, and security APIs. Those features made it much easier for organizations to accept iOS devices and to endorse BYOD to some extent.

A meeting of minds

The biggest challenge that Apple faces in selling to enterprise IT organizations is the company's reputation.

Many enterprise IT professionals view Apple as a consumer-only company and its products as toys at worst, or at least inferior to products from veteran IT vendors like Microsoft, IBM, or HP. Even when Apple's products are seen as enterprise-grade solutions, most IT professionals feel that Apple doesn't understand or doesn't care about their needs and consider the company to be difficult to work with.

To be fair, Apple has cultivated its public image to appeal to the consumer market -- often to the young, hip, and urban segments of that market. Where other vendors produce road maps about their plans over the next year or two, Apple is silent on future plans. That makes for dramatic product introductions and it helps the company build hype for new products, but for someone determining a long-term technology plan or strategy, that secrecy can be infuriating.

The biggest challenge is that Apple simply doesn't market the enterprise attributes that it does have. For example, the Apple Consultants Network, which allows businesses to find experts certified in various Apple technologies, is relatively unknown. The same is true about Apple's training and certification programs, enterprise support and repair programs, and even the various technical guides, white papers, and other enterprise-oriented resources that it makes available in obscure corners of its website (usually organized by product than by business use cases or underlying technologies).

More to the point, while most Apple products are brought into the enterprise by end-users, there are some huge exceptions. If you look at companies like SAP, whose IT department manages 20,000 iPads and almost as many iPhones, or Barclay's Bank, which bought over 8,000 iPads, it's clear that Apple can -- and does -- scale to enterprise needs from a sales and support perspective.

Changing hearts and minds

If Apple has the resources to sell to the enterprise market, either in itself or through partnerships with partners -- mobile management vendors, enterprise consulting and development partners, trainers and implementation experts, and -- then why isn't the company talking about it more?

Ultimately, that's something that only Apple executives can answer, but I think there are a few points to keep in mind.

Apple's culture is still the underdog company that made it big. It's the company that focuses intently on user experience more than anything else. It's a company that has seen success with business customers with the model that it's using (a model that many companies in the consumerization of IT space are also adopting). Even decades after IBM introduced its first PC, Apple remains culturally distinct from IBM and by extension enterprise vendors as a whole. 

All that said, I have to think that Apple can easily change course. The company has proven it's far more agile than almost any other technology company. If and when Apple truly wants to market the enterprise capabilities of its products, services, consulting partners, and partnerships with other companies, it will. While it might not transform its relationship with many IT organizations overnight, it will probably be very effective over the long term.

Just look at what it did to the music, mobile phone, and PC industries.

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