Why Apple Wins in the Enterprise Today

Over the course of its nearly 30 year history, Apple has gone from early innovator to niche player to near bankruptcy to marketing success to enterprise dabbler to consumer product giant. This week Apple announced its first foray back into the enterprise space, AppleCare for Enterprise.

For many companies, a pivot from massive success in the consumer space to uncertain success in an entirely separate market would be a dubious proposition at best.  Apple, however, has chosen to extend into the enterprise in a manner that will not cause it to lose focus on its current consumer-based success, by partnering with existing enterprise services giant, IBM.

In the mid 2000’s I worked for a colocation/managed hosting company, whose roots were as a mid ‘90s ISP for Apple users. As a result, when we transitioned to hosting, we did it on Apple products.  First on ‘90s Power Mac G3s like this:


Which then led to racks full of late ‘90s to early 2000s G4 Power Macs like this:


And culminated in the peak of Apple datacenter hardware in the mid ‘00s with the Xserve and Xserve RAID:  


Though early Xserves were PowerPC based, later versions were Intel.  This made the Xserve a high-priced, aesthetically pleasing (because even though it was datacenter hardware, it was still Apple designed) commodity server. We were willing to pay the premium because they were the easiest way to implement some of the niche technologies we serviced, and because we loved Apple.  The Xserve RAID was equally pretty, but actually delivered a considerable cost savings over similar fiber channel storage devices of the day.

Unfortunately, not many operators of data center hardware were in a position to appreciate the beauty of the Xserve.  Sales languished, product refresh slowed, then stopped completely.  The Xserve RAID was discontinued in 2008 and the Xserve in 2011 (after going 2 years without an update, an eternity in the fast-paced world of server innovation). We were stunned by Apple’s abandonment of the enterprise space. 

In 2008, when the Xserve RAID was discontinued, Apple stock was $13 per share.  Today it’s over $100, after a 7:1 split. What’s driven this 60X increase in share value?  Focus on consumer excellence.  Apple makes the best consumer products in the world. Just before it dropped the Xserve RAID, Apple released the iPhone and has ridden that innovation and focus on producing amazing consumer products to become the largest company in the world.

Apple’s iPhone and iPad have been such a huge success that consumers have brought these favorite devices to work and forced their IT departments to integrate them, a process which now has its own acronym, BYOD. While Apple made some effort to support enterprise functionality (enhanced integration with MS Outlook, enterprise security capability) it did not waver from its consumer focus.

How then, to best support these users and their organizations with requirements outside the standard consumer experience? Instead of shifting the company, or rolling out a new corporate strategy, Apple opted to partner with IBM. The newly announced AppleCare for Enterprise enables enterprise users to have their devices serviced at an Apple Store by Apple employees or onsite by IBM Global Technology Services. Kudos to Apple for sticking with what they do well and leveraging an experienced partner to do something new.

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