Apple and the Danger of the Corporate Market

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Steve Jobs shut down Apple’s corporate-focused sales efforts when he took Apple over and at one point even referred to CIOs as “orifices.” However, despite this dislike, the trend many of us call “the Consumerization of IT” – which is driving consumer products into corporations – is largely led by the iPhone and iPad, and is heavily populated by Macs.

Compared this to Microsoft. While Microsoft was taking focus away from users in the late 1900s and early 2000s and putting it on IT, Apple was closing down its IT operations and focusing on end users. Eventually, that appears to have resulted in a non-intuitive outcome: Apple is gaining massively in companies.

Apple apparently is increasingly seeing the enterprise as a growth opportunity, much like John Scully and Bill Gates did in the 1990s. But both showcase the danger of becoming too focused on IT.

Let’s explore that this week.

User Focus

While we divide the PC, Tablet, and smartphone into different categories, I think they are all personal computers, just with different sizes and capabilities.The emphasis, for the successful product, is on the word “personal.” Apple has been rewarded by being the most focused on the user and the least focused on resellers, service providers, carriers, and IT buyers.This should have been intuitive: tools designed with a tight focus on users should be more successful because the users get a vote.

However, for a while, PCs were treated a bit like terminals. They were bought for companies in bulk and the requirements of the bulk buyer were predominant.This is because initially they were too expensive for the average buyer and had to be purchased by companies.

Cell phones initially started out much the same way with the first large models being purchased by companies. Yet prices dropped down quickly to price points that were user-affordable and sales went vertical as a result.From then on, most cell phones, even those paid for by companies, were selected by users.

At a recent EMC user council meeting I heard a number of CIOs talk about how they had finally agreed to support Apple products in their enterprises and hadn’t found them to be much of a burden. They saw their decisions to allow the products as critical to attracting and retaining new employees, showcasing the power of this Apple user focus.

IT Focus

IT buyers buy in bulk and dislike change. This combination has resulted in them both being a more powerful voice in companies like Microsoft and in largely outvoting users.The danger, one that I think defines why Microsoft has more trouble moving users from version to version of Windows than Apple appears to have moving them from version to version of the MacOS, is that the product increasingly becomes uninteresting and generic.

As a result the user doesn’t see the improvements in new versions as something they want. They are more likely to lock down on what it is they already have.We initially saw this with Windows 95 and then again with Windows XP. Users just didn’t want to face the aggravation of change with Windows. We saw these same people line up for new iPads and iPhones, and similar folks buy new PCs with the latest Apple operating system on them.

In short, IT likes stability but the successful PC company drives an aggressive replacement cycle. And by not focusing on IT, Apple appears to have been more successful in getting people to buy their latest products.

Finally, IT likes roadmaps, yet when presented to a lot of people these roadmaps get leaked and that means new products look old when they arrive, having been talked about in the months prior extensively.Apple thrives on the speculation of a new product and the surprise when it is released.Losing that alone could turn back the clock to something more similar to what they were in the troubled 1990s.

Wrapping Up: Promise and Danger

Doing some things like providing hooks for management and centralized control of Apple products could actually make Apple more successful in the short term.But if they become overly enamored with IT, and lose the user in the process, then the same trend that eliminated the lines for Microsoft could take place.Apple doesn’t have the broad OEM base that Microsoft enjoys and this outcome would likely put Apple at a disadvantage again.

The trick for Apple will be to find a new balance between the needs of the IT buyer and the user focus that has made them so successful.Done right this could lead to a more powerful Apple; done wrong, a return to the 1990s for them.

Apple is one of the smartest companies in the world. Unfortunately the same could have been said of Microsoft in the 1990s and I have yet to see a firm perfectly balance between user needs and IT buyers. But if anyone can do it you’d think Apple would be on the short list.

We’ll see.