Can Macs conquer the enterprise?
If Apple were a football team, the New England Patriots would have had some serious competition this year.
The company is the undefeated king of cool in the consumer electronics and home computer markets. It is rapidly gaining yardage in the broader personal computing market and is experiencing a resurgence of popularity in traditional Macintosh niches such as education, marketing and creative departments.
With all of this momentum, you'd think that the Mac might be ready for a come-from-behind win in the enterprise. But on that field of play, Apple remains 1st and 10 at its own 10-yard line.
That's ironic, because corporate interest in a broader role for Macs is up dramatically among IT executives, driven by changes in what the Mac has to offer, by Apple's success in the consumer market and its other niches, and by corporate trends where, thanks to virtualization and a migration to Web-based applications, Windows' grip on the desktop may be starting to loosen just a bit.
"I'm getting more and more questions about bringing Macs into the enterprise and what it would take," says Tim Bajarin, president of strategic consulting firm Creative Strategies in Campbell, Calif.
Charles Smulders, an analyst at Gartner in Stamford, Conn., says he too has experienced a substantial increase in Mac inquiries from corporate customers.
There's just one problem. "Apple will tell you that they are focused on [the commercial business market], but at the end of the day, it's not a big priority for them," says David Daoud, an analyst at IDC.
An Apple spokesperson said the company does support corporate customers but declined to articulate a corporate strategy, saying only that Apple "tend[s] to focus on the product, not the strategy behind it."
That ambivalence is a concern for IT managers like Dale Frantz, CIO at Auto Warehousing Co. (AWC) in Tacoma, Wash., which last year began a corporatewide project to migrate to Macs across 23 locations. "The biggest weakness at this point I'd say is the lack of a cohesive enterprise strategy on the part of Apple," he says.
Outside of a few large media and advertising firms, corporations are simply not one of Apple's core markets. "There is no pretense on their part that the next mountain they have to conquer is the enterprise," says Bajarin.
Apple's attitude is simple, says Charles Edge, director of technology at IT consultancy 318 Inc. in Santa Monica, Calif. "Their strategy is to make a great computer that's standards-compliant. If enterprises want to use it, great, but if they don't, that's fine too."
But it takes more than a great product to succeed as the primary personal computing platform in large businesses. "To go after the major corporate accounts, you need a savvy direct sales force [and] a dedicated service organization to take care of enterprise accounts. That's not Apple's heritage," says Bajarin.
And on the record at least, it doesn't appear to be Apple's future either.
Rethinking the Mac
The Mac attraction is easy to understand. On the client side, the Mac's OS X is relatively easy to use. The addition of new features in the latest Leopard release -- such as the slick Time Machine backup utility and Spaces, which lets users create multiple, task-centric virtual desktops -- only serves to burnish that reputation.
And Macs are considered more stable than Windows, with fewer spyware and virus problems, which translate into fewer help desk calls.
But that's not what has IT's attention.
The surge of interest in the Mac is a direct result of two developments from 2006: first, the evolution of more Windows-friendly, Intel X86-based Macs, and second, the introduction of Boot Camp, which allows a full Windows environment and its complement of applications to run natively in a separate hard drive partition on any Mac.
Boot Camp, in particular, garnered a lot of attention out the gate. According to Apple, 1.5 million copies of the beta version of Boot Camp were downloaded before the program's release as part of the Leopard version of OS X. The full integration of Boot Camp into Leopard has spurred some IT managers to actively review the potential of OS X as an alternative for general business computing.
While most of 318 Inc.'s clients that use Macs extensively are in the video, sound and advertising realm, Edge says he is seeing more nontraditional customers willing to make a move. "We have two energy companies and a fountain design company that switched [from Windows] to Macs last year," he says. None of those, however, were large companies, meaning those with more than 500 employees.
Geiger Bros. already has 25 people in its marketing group using Macs, and that number could increase, says Joe Marshall, business analyst at the Lewiston, Maine, promotional products company. While most of the firm's 300 personal computers remain on Windows, a few Macs do use Parallels's Parallels Desktop for Mac virtualization software to allow access to Windows business applications, Marshall says.
Gains on the server side?
The situation is a bit less clear on the server side.
Apple's constellation of server products -- Xserve, Leopard Server and Xsan -- are intended to service the small business and departmental islands of Macs in its core markets rather than corporate at large. Improvements in the operating system on the desktop and server products have been mostly consumer- and small business-oriented. Leopard Server, for example, focuses heavily on ease of setup for small business and offers a suite of workgroup-oriented tools.
But Apple has beefed up some features that are important to corporate users. Integration problems with Microsoft's Active Directory -- a big sticking point that required third-party tools and work-arounds -- have been resolved in the Leopard release. Users can now update their own directory profiles, and digital signing is now supported, allaying the fears of security-minded IT folks.
Adding to its appeal with administrators is the fact that OS X, unlike Windows, is based on the Unix operating system and open standards such as Samba file and print services, the NFS file sharing protocol, RADIUS secure remote access and LDAP directory services.
"The biggest attraction for the Mac as a client machine is the stability of the Unix foundation for OS X as an operating system," says AWC's Frantz. And using Macs as clients on an OS X Server network offers several other benefits, he says, specifically in the areas of remote client administration and service, remote disk imaging and system configuration. Finally, improved communication tools like video iChat also make support easier, he says.
In his consulting practice, Edge still runs across a few lingering problems. "There's still no way to cluster file-sharing services, which is a biggie," Edge says, and he's had some issues with fail-overs in active/passive clustering configurations.
But on the whole, it's much easier to plug Macs into a corporate setting than it was just 12 months ago.
And it may be cheaper, too. On the server side, Apple has a licensing cost advantage over Windows. Apple's software licensing model was "a primary reason" why Frantz decided to standardize on Mac servers.
Apple licenses Leopard Server on a per server basis -- no client access licenses (CALs) are required to access file sharing, e-mail, chat, shared calendars and other basic features. (However, its management tool, Apple Remote Desktop, is sold either as a 10-concurrent-user or unlimited-user license). "The soft costs of CAL administration and tracking is also a factor," Frantz says, explaining that managing client access licenses can be a headache.
Still, AWC aside, Apple servers have made few inroads into larger organizations outside of serving Macs in traditional departmental niches. MIT has about 3,000 Macs on campus, but just a few isolated Apple servers. It mostly uses Dell hardware running Windows or Linux. "I don't see [Apple] taking over the data center anytime soon. There's a bias there. You go with what works" -- that is, with the server technologies that are already proven and working in the data center -- says Don Montabana, director of client support services at MIT.
Selling hard and fast
With its server and desktop products, Apple is now in a good position to tempt corporations. And it's got something else going for it: an incredible amount of goodwill among rank and file computer users.
Apple is selling plenty of hardware to prove it. Not long ago its share of PC shipments in the U.S. hovered around 3 percent. How times change. In the third quarter of 2007, the Mac's share of PC shipments climbed to 6.9 percent, with year-over-year growth of 29 percent, according to IDC.
In the laptop space, which is steadily eating away at the desktop market, Apple is rushing ahead. In the same period, it ranked fourth in laptop shipments, with a 9.7 percent share in the third quarter and year-over-year growth of 43.6 percent.
To be sure, most of those machines did not ship to large businesses. "You have a really strong education market in the U.S., followed by a pretty good consumer market. The rest is pretty small," says IDC analyst David Daoud.
That said, success in the home and education markets is creating a grass-roots lobbying effort that is starting to hit some IT organizations from all sides.
More college grads are joining the corporate workforce with Mac experience -- and expectations -- in tow. At Georgetown University Law Center, nearly 50 percent of the college's 30,000 students are using Macs -- up from less than 1 percent just a few years ago, says CIO Pablo Molina. The same phenomenon is occurring at technical schools such as MIT, where Macs now represent 30 percent of all personal computers on campus, up from 20 percent last year.
"This incredible rise in the use of Macs by college students is going to put pressure on IT departments to support Macintosh PCs [in the workplace]," Molina predicts.
Both Bajarin and Edge say their corporate clients have been approached by new hires lobbying for Macs. Says Bajarin: "The younger kids who grew up on Macs are frustrated with the tools they're being given."
And it's not just Macs that are turning employees into Apple fans: About 5 percent of the Law Center faculty has purchased iPhones. "I find that number shocking. I've had to modify our e-mail system so they could hook into it," says Molina.
In some situations IT organizations also face pressure from the top to support Macs and even iPhones. "You now have executives who have cut their teeth on Macs and they're coming in at relatively high levels," Bajarin says.
The Mac's cachet extends even to influential IT professionals, from hackers to corporate IT consultants. Edge says the visibility of Macs at the annual DefCon hacking convention has increased noticeably in recent years, for example.
And in a December 2007 e-mail poll of 1,400 IT consultants at Deloitte Consulting, 45 percent said they own a Mac. "We have a whole new generation of very tech-savvy super users saying, 'No, we won't use that. I'm not going to take a giant step backward on technology to come work for you,'" says Doug Standley, principal and lead in Deloitte's technology innovation strategies group.
A few unresolved issues
While this "consumerization of IT" is leading Apple into the corporate setting, albeit through the back door, in Smulders' opinion it's not enough to push most companies to deploy Macs more broadly. That's because, ultimately, the choice of personal computer is not a popularity contest but rather a business decision based on cold, hard logic.
"I don't believe we've gotten to the point where users are deciding," Smulders says.
Aside from cost, the primary reason that IT executives are keeping Macs out of the corporate setting is that they don't want to "break" the legacy environment, according to Standley. Deloitte's surveyed consultants estimate that 10 percent of its business clients are using Macs as a primary corporate tool, but if legacy issues were not a factor, perhaps 50% to 60 percent of that group would at least consider the Mac as the primary personal computing platform for general business use.
Those legacy concerns may be starting to fade. Traditionally, desktop hardware and operating systems were closely aligned with corporate applications built around Microsoft Windows. Now, the migration toward more desktop virtualization and Web-based technologies means corporations can operate in a more platform- and operating system-neutral manner. That has created a small opening for alternative platforms such as the Mac.
Some legacy programs are being rewritten as Web-based applications. In other cases, the "fat" client that normally runs on a Windows computer is being moved to a virtual PC environment, such as Citrix Presentation Server. The latter executes the user's desktop applications on back-end virtual PC servers and requires only a browser plug-in on the client for full access from any machine, be it a Windows, Mac or Linux client.
Geiger Bros.' IT staff recently rewrote a shipping application to support a Web front end -- the company's new standard. "Most of our internal applications, anything new, is being coded to a browser as opposed to [Windows] for cross-platform compatibility," says Marshall.
And at AWC, Frantz is overseeing the rewriting of its Vehicle Inventory Processing System in Java, which will allow any client equal access to the application.
In the future, some corporate applications may be encapsulated into platform-agnostic virtual machines -- much like today's virtual appliances that can be distributed to and run on any personal computer that has a virtualization stack, whether it runs Windows, OS X or Linux, says William Shelton, director of products and solutions at VMware Inc., a maker of virtualization software.
Eventually, as the majority of the corporate PC environment becomes virtualized, Smulders predicts, employers won't worry about the underlying hardware and operating system and may begin asking employees to choose and buy the personal computers of their choice. But, he cautions, "We're still a few years away from that."
Cost of support and ownership
In addition to legacy issues, managers are concerned about Mac supportability and total cost of ownership. "These issues will be the deal killer," predicts Guido Sacchi, chief information officer and senior vice president of corporate strategies at CompuCredit in Atlanta. "Can Apple make the case for itself, understand all of the CIO issues and help me solve them?" For now, Sacchi says, for him, that answer is no.
Usually, Macs are more expensive when the purchase price and cost of support are factored in, he maintains. So while he's changed his philosophy about allowing Macs here and there within his organization (currently, 15 of 3,500 employees have a Mac), he hasn't changed his corporate-level purchase plans. "Because of the higher costs in an enterprise-level deployment, you have to have a justification in productivity. Right now, I see that only in specific niches."
In terms of initial hardware costs, the price gap between Macs and PCs may be closing in some segments. Geiger Bros.' Marshall says the Mac is much more cost-effective for graphics work, the classic Macintosh stronghold. But according to two Computerworld comparisons, one looking at hardware and the other at software and reliability, the Mac can be a better value in some other areas as well, particularly the higher-performance Mac laptops.
Even if that's so, Smulders cautions corporations to think carefully about large-scale Mac deployments. "There are three things enterprises require to be comfortable with deploying an operating system, and none of those have been addressed," he says. These include lagging support from middleware and corporate software vendors; the complexities of adding another client hardware and software platform to the mix; and the lack of a second source for system hardware and parts.
Are third-party software vendors on board?
MIT's Montabana confirms the first point. "For Oracle, SAP and [other corporate software], the Mac clients always lag behind," he says. "The piece that's left is to get all of the ERP packages compatible with the Mac."
Limited availability of Mac versions of the software FedEx needed was a key reason why the shipper abandoned the Mac in its sales organization in the mid-'90s, says David Zanca, senior vice president of e-commerce technology at FedEx Services, and he doesn't think much has changed since.
Edge says the third-party software situation has improved, but only somewhat. "There's more software available today, but it's still a problem," particularly in the case of some applications used in large businesses, he says.
The complexity factor
"Complexities are introduced by having yet another operating system in your environment," says Smulders. These range from management and integration issues to training and support.
Like many other shops, Geiger Bros. uses Microsoft's Systems Management Server to manage the company's Windows PCs, but SMS doesn't support Macs.
While programs like Altiris are available that support both Windows and Mac OS X, Geiger Bros. isn't about to throw out SMS. So instead of having one tool to manage all machine updates, Marshall must use a second tool, Apple Remote Desktop, to help with Mac updates.
That may not be a big deal for small numbers of Macs, but it can quickly add to the complexity of managing larger environments, says Smulders.
Configuring Macs to support Windows also adds complexity, with two operating systems and possibly emulation software to support. While Boot Camp and virtualization software are a good interim solution for small groups of Mac users that need access to a few Windows applications, Georgetown's Molina says, he doesn't see that as a long-term strategy for larger populations of machines.
"It's not the cost of the software license, but the complexity of maintaining all of those environments" that's of concern, he explains. "I don't see that as a viable mainstream option. You either stay in Windows or you switch to Macs," he says.
No second source
Second sourcing gives the buyer competitive leverage and a second avenue for equipment and parts if the primary vendor is having trouble meeting demand -- something Apple has been noted for in the past. And Apple's forays into licensing its hardware to third parties -- first with the Mac and more recently with its iPod -- have not fared well.
Sacchi says having a second source is not a big deal with just a few Macs in one department. "But if somebody is thinking about a complete enterprise replacement, that would be a concern."
When deploying Macs at scale, IT can't afford to be held hostage to a single vendor's supply chain problems. "Compared to where they were five years ago, [Apple's] supply chain and manufacturing is much tighter," Bajarin says. But those improvements still might not be enough to allay the fears of corporate-level organizations.
MIT is experiencing problems right now. "Getting parts from Apple can be a very, very difficult process. It can take weeks," Montabana says. Currently, MIT is having trouble getting some hard drives and motherboards from Apple. Such problems, he says, have only gotten worse over the past few years. In contrast, Montabana's PC vendors deliver parts the next business day.
Service and support
Service and support are another hurdle. "You're transferring to a platform from a vendor that's not committed to supporting large enterprise needs. From what we've seen, the tools available and the support [to enact that change] are not enterprise-class," Smulders says.
On the support side of the equation, small and large companies with just a few Macs to support can find themselves caught in between Apple support offerings. Apple does offer enhanced support for larger customers. "There is an enterprise agreement where you pay $50,000 and you get stellar support, including a dedicated support guy," says Edge. "They really go all out."
But that kind of money may not fit into the budget of companies with just a few dozen Macs in the marketing department or that of smaller companies like sporting goods retailer Jax in Fort Collins, Colo., which runs its business on Mac hardware and software.
With just 80 Macs to support, company president Jim Quinlan says the firm is forced to stick with the less-expensive AppleCare plan rather than fork out for enhanced support.
"In my mind, [that] service level has dropped from what it used to be," says Quinlan. With no local Apple reseller, Jax must either ship equipment back to Apple or, if he needs it sooner, travel 70 miles to the nearest Apple store and then wait to speak with an Apple genius. "This whole 'if you want to talk to a genius you have to make an appointment' thing irritates me to no end," he says.
Frantz has also had some issues. Sometimes, he says, the left hand at Apple doesn't know what the right is doing. "We have had great support from the enterprise group within Apple. However, we usually have to go looking for that support, and in some cases, it is dependent on us to track down who the appropriate person or department is within Apple to get our questions answered.
Despite that, Frantz says he's always gotten the support he needed in the end, and remains committed to the Mac platform. "AWC has been able to accomplish many great things with our Apple project," he says. The Mac's lack of malware problems, ease of use and increased reliability translate into increased productivity. "We are definitely committed to [our Mac] strategy, and strongly believe it is the best technology decision for AWC," he says.
But most large businesses will probably remain on the sidelines for the foreseeable future. "I don't think you'll see a significant penetration into the traditional enterprise until Apple makes the strategic decision to go after that," says Bajarin.
Then again, Apple does like to play its cards close to the vest, and with the advent of Macworld next week, everything could change in an instant. It wouldn't be the first time that Steve Jobs has surprised the skeptics.
Hasta la Vista?
Could IT managers, facing a major Vista migration, be rethinking their commitment to Windows in favor of the Mac?
Although it's common for IT to be slow to adopt a new version of Windows, a recent survey of 961 IT professionals working in small, midsize and large companies by King Research -- commissioned by desktop management tool vendor KACE Networks -- shows that some organizations may be considering doing what was once unthinkable, abandoning Windows altogether rather than investing the time and money into a Vista migration.
More specifically, 44 percent of respondents said they would consider an alternative to a Vista migration. Of those, 28 percent said the Mac would be their first choice. Surprisingly, the results were similar whether respondents worked for large companies or smaller ones.
That doesn't mean a wholesale replacement of Windows PCs is coming -- the study didn't go into why users would consider Vista alternatives or how many machines they might migrate to an alternative operating system. But it does show that IT is at least thinking about the alternatives.