Will Leopard be a Win or a Loss for Apple?: Page 2

Posted October 27, 2007

Rob Enderle

Rob Enderle

(Page 2 of 2)

Apple’s Possible Enterprise Advantage

One of the things IT has been looking at is dual mode laptops. One mode would be for business and be supported by the IT department. The other mode would be personal and supported by the hardware vendor. This is being most aggressively considered in conjunction with shifting from IT-purchased laptops to employee-purchased laptops subsidized by IT.

In an Apple/Windows dual OS machine the Apple side could be the employee side (where all of their personal stuff resides) and the Windows side could be the IT side (where the software was provided and supported by IT). You could argue that because these are two completely different environments, one can more clearly be kept separate from the other than if you were doing two Windows partitions.

This would create a value proposition unique to Apple. And – this is critical – put them in a clearly advantageous position over the traditional Windows OEM. So where would the exposure be?

Security Exposure Would Need to Be Addressed

Right now Apple does not support the TPM (Trusted Platform Module) and this has become a requirement by most IT shops. Granted most haven’t actually used it yet, but with the advent of the new encrypted TPM-enabled Seagate drives and the continued exposure to SOX and HIPAA disclosure rules, TPMs are starting to get turned on.

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I was just at an event with Wave Systems, the leading supplier of software to manage the TPM, and the company appears to be in much higher demand now because of this trend. So Apple would still need to address this with the hardware they plan to offer to large businesses, or this likely won’t work.

Security, unfortunately, remains very important. And these new encrypted drives are currently the only way to be able to represent that a stolen or misplaced laptop has not been compromised, since the user has no control over the encryption because the key is centrally managed by IT. This is a game-changing technology and currently not available, yet, on Apple hardware.

This mostly applies to laptops though and, while security is important on desktops, they typically are physically secured and are more focused on performance. So this exposure only applies to the potential future opportunity of displacing laptops, not to what Apple could do near term with workstations.

Apple Exposure

Once you create the opportunity to do both on a single system and create a competitive threat to a large hardware vendor there will be a focused response.

For folks like HP and Dell, who sell into environments where Apple machines co-reside, they’ll likely come up with an alternative solution. And they’re more capable of supporting multiple operating systems (given they do that with Linux, UNIX, and Windows already) than Apple is.

Should Apple move to block by using licensing language, the EU is already primed to move against the effort, thanks to the recent Microsoft trial. And it can now move much more quickly (and already has Apple on the list of firms they intend to explore).

If, say, HP were to have a hardware solution which could do a better job of hosting both the MacOS and Windows (or Linux), the end result could be a drop in market share for Apple hardware, with a large hit on Apple’s revenue line (though profit margins would likely go up given the OS has a vastly higher profit margin than hardware does).

If this solution were to move to PCs, recall that HP has the closest thing to an Apple-level marketing team (because many are ex-Apple). They have vastly stronger worldwide channels and better economies of scale, resulting from a vastly larger market share. HP is also still rather pissed at Apple as a result of the HP iPod fiasco, where Apple took advantage of HP’s trust and embarrassed HP badly.

Once this door is opened, and it is open, it then becomes a race for who can execute more rapidly. Apple has some natural protection in their loyal base and in their license. But it isn’t unlimited and risk could result.

Biggest Changes

In the end I think Leopard may represent the beginning of one of the biggest changes we have yet seen in the PC space. One where the OS becomes less tied to the hardware and more tied to the tasks you want to perform, and the OS types and versions more easily free float on top of hardware. This will become vastly more apparent when virtualization becomes more common and that, my friends, is a very few short years (months) away.

Leopard may result in one of the biggest changes we have ever seen, the only question is: will Apple benefit the most from it, or be harmed the most by it, long term?

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