Apple Follows the Money

Ephraim Schwartz at Infoworld is writing the free thinking, wide ranging but largely fact-based columns that one has thirsted for in the major IT media. Ephraim is making the case that Apple is moving towards an IBM strategy . Be the facilitator, the infrastructure/middleware provider and essential glue that makes things work – but on the consumer/desktop side of computing. IBM, of course, is claiming the enterprise/server side. And I essentially agree with Ephraim but have two key “I beg to differs”.

First, Ephraim cites the recent MacWorld Expo as proof that Apple is only making a feint toward the enterprise market. Because there were no Xserve storage or networking announcements and no enterprise vendors at the show that must be a fake move. Some colleagues work in the highly competitive graphics design field would beg to differ. They see Apple as trying to maintain their graphics constituency by supporting not just super-workstations but also the inevitable need for network and large storage capabilities that are a prerequisite on the professional side. Also one can also as a defense against the Linux-based render-engine farms that that could give Linux Open Source and newly accumulating Linux graphics vendors an opening. But they also agree with Ephraim and rue the abandoning of the PowerPC chip for the loss of its floating point prowess. What they see as the current Apple-speak-with-forked-tongue on Intel-Macs benchmarks is a bad sign in their eyes.

Apple as Facilitator ?

The second area that I agree-and-disagree is the facilitator strategy that Apple is taking on the consumer side in lock step with IBMs similar enterprise IT strategy. I think IBM has the facilitator role much more clearly defined and with more IBM stakeholders benefiting than Apple has on the consumer side. Yes, both IBM and Apple recognize that Open Source has put the emphasis on service – just making your IT products work for the client – hardware, software and support. They both also know that Microsoft is currently weak in this regard requiring greater and greater dependency on Microsoft-proprietary technologies and even hardware while still having the embarrassing problem that Microsoft still just cant get it to all work the way customers want. IE and Windows desktop OS continues to fault short with headline security problems and Windows Bloat, Clot and Rot. Also Bills infallible third time charm in major markets like Media Center PC, Pen/Tablet PC and MSN/Web Live Services is really strike five and strike six – Microsoft only getting to whiff many times more than Natural Selection would allow because of Redmonds desktop monopoly. So I agree with Ephraim, both Apple and IBM certainly want to appear to frazzled CIOs and beleagured consumers respectively as best friends and facilitators.

Also both want to be the glue agents – providing the infrastructure and middleware that just makes things work on the ever more sprawling desktop-Apple and on the server and enterprise-IBM. However, as noted, IBM appears to have a more inclusive role as facilitator than Apple. Lets look at their respective roles in hardware, software, suppliers/partners, and “support”.

On the hardware side, IBM has since the mid-nineties taken a much more agnostic approach. IBM has largely implemented the old and abandoned Microsoft line ” when numbers and market size warrant we will support that hardware and software”. True Armonk can be Machiavellian in its timing – but BEA, JBOSS, Oracle, SQL Server, EMC, HP-printers and devices, Windows desktop and Server all get supported and interoprated with such that customers largely get what they want. On the hardware side for Apple, this is also largely true as long as the device is graphics oriented and does not have an OS – until the iPod phenomenon. Now graphics colleagues say the ability to move among devices is delayed either by the old device driver and/or software support for new Mac/OS problems – or waiting for Apples iPod and other Mac devices to skim the cream from the market.

I certainly agree with Ephraims analysis – “If Apple can convince consumers that the Mac is the link that allows them to easily access all of their electronic gadgets, they will have pulled off quite a coup. By blending high tech and consumer electronics like nobody else, Apple reduces vendors like Hitachi, Samsung, and Sony to mere hardware shadows, waiting to be commoditized.” This is a rip out of the Microsoft play book – make your partners dependent vassals. And that “facilitator” strategy will certainly have Apples hardware “partners” a tad less likely to say and do good things with Apple.

On the software side, the situation is even worse. With Garage Band, iPhoto, iTunes, Final Cut and other media programs Apple is competing fiercely with its own Graphics Golden Geese. Shades of another Microsoft smooth move – where Redmond waits for a software segment to reach critical mass – and then invades with strategic buyouts, bundling and giveaways to take a commanding if not dominant position (think SMB accounting and ERP, BI, and even games). This “facilitation” presents Apples media software partners like Adobe, Pinnacle, Sony, Ulead and dozens of others with some tough choices. With Tablet, Media Center and the new Vista with its WinPF and very Adobe/Corel/Ulead chalenging Expression Suite, Microsoft has put the “Notice to Vacate” sign on the wall for many media vendors. But Apple has been increasingly doing the same thing with iTunes, iPhoto, iMovie, garageband, iLife, etc. Looks like Linux is the only place to go but watch out for the reception there if you dont Open Source the code.

In sum, Apples software partners might yearn for the IBM approach to software vendors – one part heavy-handed uneveness and one part benign neglect. But do give IBM credit – they interoperate better with their major competitors . And IBM is acting more or less as gruff facilitators in major software segments such as Linux, Java, development IDEs, grid computing, UIMA-unstructured data handling, etc. Apple is definitely has definitely bruised its ISV almost as much as Microsoft and when compared to Big Blue on software facilitation.

Finally, lets take a look at Apples suppliers. They have periodically have had to put their businesses on the line as Apple has switched both fundamental chip design and /or OS software about once every 4-5 years. I suspect Apple suppliers are not happy campers at having to absorb the Apples risks given Steve Jobs infamous loyalty to his providers.

In sum, Apple and Jobs could afford to sit in on Facilitator 101- It is really Win-Win. Big Blue is no Saint Sam outfit, but with IBM already have become a services firm, Mr. Palmisano knows better than all the other players how to spread the wealth. As Mr. Cringely pointed out in his book on the other major titans of IT, Accidental Empires, the other major shapers and players in Computing may not have an ounce of Win-Win in their DNA.

(c)JBSurveyer 2006

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