Apple, success, corporate market: words rarely seen in the same sentence

At one time or another, Apple has been riding high on its success in every market sector except one: the corporate market.

For a long time, ‘corporate’ (or ‘enterprise’) has been dependent on winning over the IT department, which means servers. Although Apple has sold no end of different models of servers, none has made any impact on the market.

Its first intended server was a special version of the Macintosh II running Apple’s own port of Unix, A/UX, way back in 1988. Although it attracted a dedicated following in education and among some engineers inside Apple, it failed to capture the government and corporate sector for which it was intended. Apple’s new business division was formed in 1991, when the preferred platform was the Mac IIfx, and the following year A/UX was dead.

In 1993, it tried its first dedicated server models, the Workgroup Server 60, 80, and 95. These were replaced by more powerful versions over the following years, and in 1996 Apple went into partnership with IBM to sell the Network Server 500 and 700, huge systems with hot-swappable hard drives, running IBM’s AIX. Again they attracted a dedicated following from a tiny number of customers.

Apple retreated to tweaked versions of its higher-end Power Macs from 1997, licking its wounds and pondering its next move. That came in 2002, with the first of the Xserve systems, running Mac OS X Server 10.1.5. Flat rack-mounted units, they were over-engineered in some respects, but lacking in others. I still have one, in a rack, upstairs.

Again there was a dedicated following. Special ‘cluster node’ versions were assembled into supercomputers, which briefly caught the IT headlines. In 2006, the first Intel-powered Xserves shipped, and hopes were still high for their success. Despite all their virtues, Apple pulled the plug on them in 2011, and transformed OS X Server 10.7 by slashing its price to 10% of the previous version, and wrapping it all up in a neat app for small business.

Over those years, Apple has bought in corporate sales specialists, hired server engineers, turned a deaf ear to most of what they said, drifted away, and then shut them down.

Ironically, Steve Jobs’ NeXT workstations – sold from 1988 to 1997 – were far more successful in the corporate sector than Apple ever has been.

Until this year.

Back in late October, during Apple’s quarterly earnings conference call, Tim Cook revealed that over the previous year, Apple had sold $25 billion of products into ‘enterprises’, up 40% on the previous year.

It has done so using a completely different strategy: partnerships with others with existing high penetration of the corporate marketplace, such as CISCO, IBM, and Box, and by making other Apple products such as iPhones and iPads the preferred choice. Integrating iOS systems into a business is inevitably so much easier when desktop and laptop computers are also supplied by Apple. Net savings quoted for IBM are $270 per computer, compared against Windows PCs. With IBM now intending to provide up to 200,000 MacBooks to its employees, Apple’s side of the partnership looks very rewarding.

But there is more to it than that. With businesses emptying server suites and switching to cloud services, selling them server hardware and operating systems has almost become an irrelevance. Integrating phones, tablets, and computers with a business’s cloud systems is far more important, and an area in which Apple is, for once, in the front row.

The final twist is the one that puts Tim Cook and Apple in another front row, the fight to keep robust encryption and secure communications. For without those, businesses cannot secure their cloud connections, and everyone’s future growth in the corporate sector collapses, just as did A/UX, Network Servers, and the Xserve.

If you think your life would suffer with backdoor vulnerabilities in encryption, think what it would mean for enterprises.