Stuck on the enterprise
Keeping Apple off the IT guy’s radar.
As Jobs proudly reported this Tuesday, the Mac is doing well. Quibbling over exact numbers aside, the iPhone launch was also a success. Despite stagnating for a bit, design-wise, the iPod continues to be a mass-market monster. Yep, Apple looks like quite the industry giant these days. But there’s one segment that these products essentially ignore: the so-called "enterprise" market.
Sure, Apple makes periodic overtures in to big business. It even redirects apple.com/enterprise to someplace sensible. But nearly every Apple product or service ostensibly aimed at enterprise customers can also be seen as a natural part of some other, “non-enterprise” market where Apple is strong (e.g., creative professionals).
If you need further reinforcement of this point, just ask your local IT guy at work how much Apple is on his radar for future purchases. He’ll likely know a lot about Apple, and may even be a Mac user himself, but his next purchase order for 200 desktop computers will probably be from Dell.
You can rattle off a list of things that Apple does not do that makes its products and services a poor fit for corporate IT, and this list has not changed for years. To the extent that Apple products have actually infiltrated big businesses, it’s been through small groups of enthusiasts—the canonical example being the art department that somehow manages to get themselves Macs, despite a company-wide standardization on Windows. We’re seeing some of the same phenomenon today with the iPhone: employees purchasing iPhones because they’re cool, despite corporate IT’s prohibition against them.
Some see this as the seeds of an uprising. Here’s Gruber’s take:
Self-important IT experts will continue to insist that the iPhone “must” or “needs to” support “business software systems”, but in the meantime, their employees will be buying iPhones on their own. […] Like many successful revolutions, this one might come from the bottom.
This “revolution” certainly didn’t take place with the Mac, but Apple today is quite different than the Apple of the 1990s. Maybe things will work out differently this time. But to me, the more interesting question is why Apple has chosen to (mostly) ignore the enterprise market for so long.
Consider the sticker guy from Tuesday’s Apple event. (Macworld has the audio.) Okay, hold that thought. Now think about what defines the enterprise market, and what makes it different from the home market.
Sure, home users are more willing to pay extra for fashion and reputation, and even the wallets of creative professionals fall open a bit wider in service of style. But the biggest difference is more fundamental. In the enterprise market, you must sell to the business as an entity, usually through an IT department whose job it is to manage technology products and services that are actually used by everyone else in the company. In the home market, you sell to the end user.
Small businesses are similar; the people making the purchasing decisions and managing the products are more likely to be the same people using them. The further removed these two groups become—the users and the purchasers—the more “enterprise-y” the market, and the less Apple is interested in serving it.
Unfailingly, Apple markets only to the end user these days. Even with its few enterprise products, Apple sells to the primary “users” of the hardware: the IT guys that set up and manage the Xserves and RAID arrays. What Apple does not do is sell products to corporate IT that are meant for direct use by non-IT employees. That is, desktop PCs, and more recently, cellular phones.
This gets back around to one of my favorite dumb questions from the iPhone launch: “Why hasn’t anyone made a phone like this before?” The answer is that every other phone manufacturer is tied up in the enterprise market in one way or another.
The “dream phone” for the enterprise looks quite different than the iPhone. It works with the corporate VPN. It does Exchange. It supports device-wide encryption and remote deletion of data on lost devices. It’s available in several compatible forms from multiple manufacturers. It has a well-defined public roadmap for hardware and software. It can be backed up and restored en masse, preferably over the network. If it has a camera, it can be disabled. The battery can be removed and replaced. And on and on.
Maybe around item two hundred in this list there might be a bit about the people who will actually use these enterprise dream phones tolerating the things. Really, as long as they don’t openly revolt, it’s fine. The people you have to please in the enterprise market are the ones purchasing and supporting the products, not the poor schmucks who actually have to use them.
Still holding that thought about the Intel stickers? Listen again to Steve’s final words on the subject. “We put ourselves in the customer’s shoes and say, what do we want?”
This is why Apple does not compete in the enterprise market in the traditional sense. This is why no other company created the iPhone. This is why most desktop PCs are pieces of crap. When you don’t focus on the user, the user gets shafted.
Want more? Here’s Jobs’s response to a question about Apple’s neglect of the low-end of the market (e.g., $500 PCs, $100 phones, etc.):
There’s some stuff in our industry that we wouldn’t be proud to ship. And we just can’t do it. We can’t ship junk. There are thresholds we can’t cross because of who we are.
This can all sound pretty smug. For a more grounded interpretation, you can try to look at it from a business perspective—profit margins, avoiding commoditization, the potential for growth and so on—but there’s no getting around the results. And no matter how you slice it, the decision to ignore markets where you must sell to someone other than the end user is pretty high-minded (for a corporation). It’s also perhaps the only way to ever create great products, products that customers actually love.
Think about this the next time you’re peeling stickers off your new laptop at work.
This article originally appeared at Ars Technica. It is reproduced here with permission.