Why Apple needs to foster more partnerships?
By Paul Shields

No one company can provide the solution for every situation. Customers come in all sizes and shapes, especially in the computer market. Consumer users want games, educational titles and personal finance applications. Small businesses need E-mail, accounting packages, and contact managers along with the software that makes their business unique. Enterprise customers want high-end servers, collaboration tools and advanced database applications.

Not only do the software demands of these markets differ; they also represent different kinds of customers. Consumers tend to buy individual packages because they see a new product that offers potentially enticing features and capabilities. Businesses focus on comprehensive solutions. No intelligently managed enterprise buys server hardware without first deciding which application will run on the machine.

Apple is playing very conservatively these days and in some cases justifiably so. They are focusing on established markets trying to ensure that they do everything to satisfy those customers. Senior executives have been quoted as saying that they don't have the resources to address every market segment and therefore they will continue to focus on those where they already have a presence.

The problem with this view is that it represents a very narrow focus that has far reaching consequences. While these markets are distinct in many ways, there is overlap. A graphics design company needs accounting software and customer management tools. These are business management tools. Without Apple focusing on the core business market, there is little incentive for third parties to create these tools.

Many companies use Apple products for their core activities, but run business operations on a PC. There has not been a significant change in this picture since Apple started making its comeback almost two years ago. I'm not trying to suggest that there are no solutions available in these market segments, just that the selection is limited and packages tend to evolve at a slower rate.

How can Apple solve this problem?

The solution is easier than it seems. Apple doesn't need to be the one-stop shop for every customer, what they need is to be able to provide solutions for customers. The best way to accomplish this: develop stronger relationships.

An enhanced partnership strategy would allow Apple to address a wider market segment, expanding the number of Macs sold directly and indirectly. Computer sales have a tremendous snowball effect. The more machines sold, the more software developed which leads to further gains in sales.

What area should Apple target?

Servers

Apple sells one basic server with a few minor options, hardly enough to meet the demands of a varied marketplace. AppleShare is a great software solution but the hardware Apple sells is lacking. Apple needs to bless a partner to demonstrate a stronger commitment to this market segment. That partner would provide built-to-order configurations that include large disk arrays, UPS, multiple networking options, and most importantly integration and support.

I would suggest that Apple go one step further and begin to explore the possibilities of OEM agreements with a vendor who can provide customized systems that might include rack-mount kits, more internal storage options, and better redundancy. This is not quite the same as clones; instead, the partner would use all Apple manufactured motherboards to build customized systems. The impact to Apple's sales would be minimal because Apple does not have a server market to protect. Apple would still realize a gain from each machine sold using a motherboard and related components along with an AppleShare license.

E-mail

While AppleShare is a capable E-mail server, Apple needs to collaborate with a partner who has experience selling into large environments. Mac OS X server is a suitable platform as an E-mail server if someone takes the time and effort to configure it. E-mail is becoming a business critical application that requires high levels of reliability. Mac OS X server has the potential to deliver this, but no one is selling it as a solution.

The increased sales would benefit Apple and serve to introduce system administrators to Apple hardware/software. The Mac server solution works because it will support either Mac or Windows clients, thus being independent of the platform used for desktops.

Customer Care

This is a market where Apple had a ton of potential but ignored it and lost everything gained. Call centers buy tens of thousands of machines every year; most of which run a single client/server application. The software demands of this market are relatively easy to satisfy. There were even a number of solutions like Vantive, Clarify, Scopus, Remedy, etc., all of which offered some level of Mac support. Almost all of these are now gone primarily because Apple never delivered the missing pieces (software or marketing).

The missing software piece was Computer-Telephony Integration (CTI). The Windows-based TAPI solutions became the de-facto standard and Apple failed to deliver the modules needed to communicate with a TAPI server. When Apple delivers a TAPI solution, the call center market will be wide-open again. These applications evolve at such a rapid rate that lack of support today is a minuscule problem. A partnership with any one of the leading front-office developers could result in an updated application in a matter of months.

From a hardware perspective, the iMac is almost the perfect solution for a call center. The compact design, low price, high reliability, and ease-of-use make it a very inexpensive platform to deploy and maintain. Combined with NetBoot, the Total Cost of Ownership (TCO) in an iMac-based call center could easily fall below 50% of the TCO in a traditional Windows-based call center. Call centers run on very tight budgets and such saving would be enough enticement to get several of them to switch platforms.

There is even more potential

These represent just three areas where Apple could develop partnerships and significantly enhance their position in the marketplace. Adding more consumer outlets only addresses a single market and limits the potential for long-term success. Apple executives are right; they can't be everything to everyone, but they also need to step-up to the plate and begin collaborating with those companies that can expand Apple's horizons. All of the above are low-risk ventures that represent a potential for a steady increase in the Mac's presence. If Apple is careful in selecting its partners, there is almost no way they can lose.

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February 09, 2010