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IBM’s Strategic Interest in Macs Goes Beyond Pilot Program

Welcome IBM, Seriously
Daniel Eran Dilger
The Mac pilot program within IBM Research, outlined in the previous article, is only a small part of IBM’s corporate efforts to diversify its computing platforms and push the adoption of Macs in particular. A number of internal sources wrote to provide additional details on IBM’s current and future plans.


IBM Launches Pilot Program for Migrating to Macs

Macs at IBM and the Enterprise in General.
According to reports from IBM employees, the company’s Mac@IBM intranet site, designed to offer support and assistance to Mac users within the company, now has over 1600 registered Mac users, a dramatic increase over the 930 users cited in the Research Division’s pilot program documents originally prepared several months ago. That number still pales in comparison to the roughly 386,000 employees IBM supports worldwide. It does indicate two interesting things however.

First, comparing Apple’s 6.6% US share of all PC sales, as reported by Gartner for the first calendar quarter of 2008, to the scant few thousand Macs currently at IBM indicates that Apple’s sales are currently almost entirely outside of the corporate enterprise market. Whether officially subscribed to the support Intranet or not, there’s not enough Macs at IBM for Apple to currently claim even 1% share. In other words, Apple’s 32.5% unit growth in US Mac sales year over year for the most recent quarter is occurring almost entirely due to individual purchases and educational sales, not from any corporate adoption.

Certainly, many of those sales are ending up in business roles as executives and other employees bring their Macs to work. MacBook Pros get attention in business presentations; over a year ago, Mark Hurd, the CEO of HP, made news when he demanded to know why so many analysts were bringing MacBook Pro laptops to HP meetings. Retail executives at CDW have insisted that its partners not bring Dell computers to meetings on its premises, but welcomed MacBooks Pros because CDW sells them. However, beyond the showy mindshare of Macs used in business among executives, there’s currently little market share for Macs, even among Mac-friendly companies like IBM.

The iTunes Vendor Lock In Myth

That indicates wide open potential for Apple to expand into business in the future. Currently, that segment isn’t looking very hot. The PC vendors that supply the majority of enterprise desktop computers only experienced minimal growth year over year. That slow growth comes despite the fact that last year’s overall sales were already disappointing in the first quarter, a lull many pundits blamed on the newness Windows Vista. An additional year of Vista patches hasn’t helped. Dell only gained 15.7% year over year in the first quarter, and HP’s sales actually shrank by 0.2%. Third place Acer saw its sales fall by a whopping 18.3%, and Toshiba, in fifth place after Apple, saw only 4.4% growth in US sales.

That indicates that Apple is currently targeting the most optimal markets in its push to deliver desktops and laptops that are desirable to consumers rather than attempting to rival HP and Dell in pushing out cheap, undistinguished boxes to the enterprise. While Apple has seen dramatic success in the consumer market, it has not made major inroads into business. One major reason for this is the overwhelming dependance upon Windows legacy applications in the enterprise, a factor that is much weaker in the consumer market.

 Gartner Apple PC market share 2008 Q1

AppleInsider | Apple snags 6.6% share of US PC market in first quarter

Opening the Floodgates to Macs in the Enterprise.
That’s the second reason why IBM’s interest in the Mac platform is far more significant than a hundred test laptops being put through the paces by IBM Research scientists and administrators, or the few thousand Macs scattered across IBM in general. As IBM works to accommodate cross-platform interoperability in its own software, the barriers that tie enterprise users to Windows will loosen, allowing Apple to promote Macs not just within IBM, but across the enterprise.

For its part, Apple is promoting standards-based web development and breaking down compatibility barriers with Microsoft’s Exchange Server on the iPhone. IBM is promoting Mac support for Notes, adding support for Lotus Symphony productivity apps, and working to resolve other barriers that will not only make it easier for IBM employees to use Macs, but also make it easier for other IBM partners to adopt Macs as well.

Additionally, as the exclusive ties that bind users to Windows are severed, the enterprise will be free to adopt other products as well, including Linux on the desktop. This will promote the use of the best available hardware and software for a given task, resulting in dramatic costs savings for business users and new competition that will accelerate innovative development and new efficiencies of scale as open source software adoption increases. Cross-platform interoperability is good for IBM, good for Apple, and good for open source in general. It is bad for inefficient, anti-competitive monopolies.

 Wp-Content Uploads 2008 04 200804072334

iPhone 2.0: Exchange vs Leopard Server

IBM’s MacBook Pro-Motion.
The Research Division isn’t the only group at IBM actively studying how to accelerate Mac adoption. IBM’s Software Division has similarly initiated an incentive program to encourage its sales force to use Macs exclusively, according to sources at IBM familiar with the matter.

The objective of the program is pointedly to promote the use of Apple’s hardware when demonstrating IBM software to IBM clients. That intent is compatible with the idea of IBM promoting cross-platform interoperability to its clients. It also serves to advertise Apple’s hardware among enterprise users.

Participating employees return their Lenovo-manufactured (but IBM-branded) ThinkPad laptops and purchase a MacBook Pro. The company has negotiated special discount pricing from Apple on MacBook Pros for its employees. Additionally, IBM reimburses those employees who commit to using a Mac exclusively for 24 months with an upfront $750 rebate and an additional $750 payment for the second year.

IBM’s IDS for Mac OS X Server.
In addition to its efforts to use Macs as client laptops internally, IBM is also promoting support for Mac OS X Leopard Server. Earlier this year at Macworld Expo, IBM announced that its Informix Data Server would ship for Mac OS X in May. The first beta of IDS 11 “Cheetah 2″ is already available for download.

Along with its existing support for Linux, Unix, and Windows, IDS 11 will provide online transaction processing (OLTP) data serving capabilities for the Mac platform. Terri Gerber of the IBM’s Informix software group wrote that IDS 11 is ”a great way to start building solutions requiring a blazing fast OLTP database that provides continuous availability and disaster recovery including delivering 99.999% availability.“

A press release for the software noted that ”IDS 11 will offer the high performance, low operating cost, scalability and data availability that have been the hallmark of IDS and the user experience Mac customers have come to expect. IDS provides continuous availability and disaster recovery, including support for multiple secondary servers.“

At the announcement, Apple’s vice president of Worldwide Developer Relations Ron Okamoto issued a statement saying, ”We’re thrilled that IBM is joining the growing number of Mac enterprise application developers by bringing its powerful enterprise-class IDS database to the Mac.“

IDS fits well into Apple’s server business at the intersection of the enterprise and education markets. As Ben Bassett, the VP of Software and Services at Jenzabar, described, ”Our higher education customers have been well served by our partnership with IBM throughout the years and they appreciate the reliability and low cost delivered by IBM Informix Dynamic Server, in combination with the Jenzabar Total Campus Management solution. Jenzabar continues to be encouraged by the strong commitment IBM has made to IDS, as demonstrated by this extension of IDS support to the Mac platforms. IDS on Mac OS X will provide a robust database and development environment for the higher education market.“

IBM – Informix Dynamic Server (IDS) 11
IBM Informix Dynamic Server to Deliver Support for Mac OS X » Soft32.com

The Future of Windows.
While Apple’s profile rises in the enterprise as a significant and worthy competitor to Windows, Microsoft’s position appears to be following the course of a significant IBM partner that nearly faded into obscurity in the mid 90s. The next article will examine this historical parallel, and what it means for the future of Windows.

How Microsoft has become the Beleaguered Apple ‘96

I really like to hear from readers. Comment in the Forum or email me with your ideas.

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18 comments

1 IBM Launches Pilot Program for Migrating to Macs — RoughlyDrafted Magazine { 04.18.08 at 6:02 pm }

[...] IBM’s Strategic Interest in Macs Goes Beyond Pilot Program [...]

2 IBM’s Strategic Interest in Macs Goes Beyond Pilot Program | VC Program { 04.18.08 at 6:15 pm }

[...] unknown wrote an interesting post today onHere’s a quick excerptThe Mac pilot program within IBM Research, outlined in the previous article, is only a small part of IBM’s corporate efforts to diversify its computing platforms and push the adoption of Macs in particular. A number of internal sources … [...]

3 johnnyapple { 04.18.08 at 8:48 pm }

IBM taking serious interest in Mac and Linux is a really big deal! IBM partners and lot’s of other companies will take notice. I’ve heard talk the past few days from major US company who is paying attention to this story – they’re not satisfied with Microsoft and it’s lousy software and it’s ridiculous fees. All kinds of companies big and small are looking for a way out.

We’ll know in a year or two if this is a fad or a serious shift – my money is on the latter.

4 droughtquake { 04.18.08 at 10:34 pm }

Since we’re talking about education, why doesn’t Apple offer special training for Teachers in their stores? Apple doesn’t seem to be too interested in helping to bail out California’s education system, but that could be a good way to increase the effectiveness of the use of computers in schools.

(I don’t mean to single out Apple. Google, Yahoo, HP, Adobe and a whole bunch of others could be doing more too. Kaiser & Clorox could do more for Oakland Unified too.)

5 Rip Ragged { 04.18.08 at 11:08 pm }

It looks like we’ve gone beyond the “tipping point” Steve Jobs mentioned a few months ago. Apple has crested the hill. The next few months could be quite fun indeed for an Apple fanboy/shareholder.

6 Berend Schotanus { 04.19.08 at 7:36 am }

“…the overwhelming dependance upon Windows legacy applications in the enterprise”

“…as the exclusive ties that bind users to Windows are severed, the enterprise will be free to adopt other products as well, including Linux on the desktop.”

These are great notions. I was wondering as to what could slow down the decline of the Windows platform and this is a serious reason!

My estimate is that at some point in time Linux will replace Windows as “standard” operating system while Apple can maintain or expand its up-market position. Look at this enormous Dell and HP market share, they will not let Vista ruin their industry. Dell and HP can and will ship Linux as soon as market demand moves away from Windows. Consumers, discontent with a newly bought Vista computer can use Linux as a reasonable alternative to XP’downgrade. Question remains: will a critical point in consumer discontent about Windows be reached in order to initiate such a shift?

I am looking forward to your next article.

7 PhilipWing { 04.19.08 at 8:03 am }

Does IBM supply any internal components to MacBooks? When they had PowerPCs inside, they did, but then IBM became more interested in developing server rather than desktop features in that processor line.

An interesting initiative…

8 lmasanti { 04.19.08 at 8:31 am }

quote:
“Does IBM supply any internal components to MacBooks? When they had PowerPCs inside, they did, but then IBM became more interested in developing server rather than desktop features in that processor line.”

I think that it is more about “Mac on the enterprise” so IBM wants to adjust theirs own software and “learn how it feels to use a Mac” than with IBM converting to Apple!
During “centuries” they designed the heart of the Mac and they do not pay attention to the final product. The even developed the “new operating system” with Apple and do not pay attention to the final product.
Business are going Apple (Mac and iPhone) by themselves and IBM recognizes that they are not preapared to serve them: 24 Macs in a 400.000 employees company is a “test our products” more than “change our culture” experiment.

9 PhilipWing { 04.19.08 at 11:04 am }

“It also serves to advertise Apple’s hardware among enterprise users.…”

I’m curious to know what’s IBM piece in *that* part… :)

10 Steffan { 04.19.08 at 1:02 pm }

“…..Participating employees return their Lenovo-manufactured (but IBM-branded) ThinkPad laptops and purchase a MacBook Pro. The company has negotiated special discount pricing from Apple on MacBook Pros for its employees. Additionally, IBM reimburses those employees who commit to using a Mac exclusively for 24 months with an upfront $750 rebate and an additional $750 payment for the second year…..”

What’s that all about? If I understand correctly they expect/allow employees to buy and connect their *own* computer to the company network!!? I have only worked in a couple of medium sized US based companies (but working for them in the UK) and I don’t work in IT but this blows my mind. My company would never let us connect our own equipment to the network, much as I’d love to use my MacBook Pro at/for work.

Or did I get that wrong?

Cheers

Steffan

11 MikieV { 04.19.08 at 4:52 pm }

“That indicates that Apple is currently targeting the most optimal markets in its push to deliver desktops and laptops that are desirable to consumers rather than attempting to rival HP and Dell in pushing out cheap, undistinguished boxes to the enterprise.”

That is the main reason I don’t see companies like the one I work for switching to the Mac – they are too cheap to buy anything other than “commodity” computers for the majority of tasks.

If they could somehow run OSX on their installed-base of PCs, I’m sure they would jump at the chance to eliminate the “Microsoft tax” of per-seat licensing.

Buy a bunch on new computers from Apple… ??

fugetaboutit.

Upgrades from WinNT to Win2K were slow, and we still haven’t migrated all the “boxes” from Win2K to XP.

Vista??? Haven’t seen it yet.

Why would I expect my company to “upgrade” to Macs, when we’re still getting-by with Office 2003?? :P

12 schwabsauce { 04.20.08 at 9:43 pm }

I think it will be too difficult for Linux to gain many users when so many of the trendsetters and power users are already satisfied with the Apple platform. It used to seem like a real necessity, and today’s Linux does fill important needs well, but now that OSX is pretty mature and the Apple hardware is capable of running any OS, Linux doesn’t seem necessary to me.

I agree that Apple could penetrate the education market massively if they had better training programs, even if they were predominantly video and not in-person almost at all. I think the Mac Mini, or hacked AppleTVs are good bets for commodity-minded businesses looking to follow IBM’s lead. Those computers are so small they’re almost invisible in the market and the media. I think Apple should do more to remind people that they’re available for cheap.

13 bshirley { 04.21.08 at 9:47 am }

Between an economic lull right now that’s likely keeping capital purchased to a minimum at companies, the year plus of lackluster Vista impressions, and a graduating populace that is more familiar with Mac than anything else, I’d say the next decade will be a boon for Apple in the corporation.

14 see-m { 05.02.08 at 8:20 am }

OK seems to be much speculation here.

You must remember that IBM is not a Microsoft shop. Never has been. Folks associate IBM with the PC, and therefore Microsoft. Do not forget that the height of its PC days IBM was OS/2, about as non-Microsoft as you get.

IBM is not in the PC business, IBM does not make PCs. It sold that off years ago. IBM is a huge proponent of UNIX, and produces many flavors or UNIX for its many server lines, and of course Linux. IBMs strength comes from its ability, in both software and services, to support heterogenous environments, making them work together. It also supports Windows Server on its x-Series of servers.

Internally, most employees get Thinkpads, as I suspect we still get good deals as part of the sell-off, though as time goes on and the sell off of the PC company gets further in the past, this may change, but I have no info on that.

You mention 1600 employees on Mac. I think you will find that this is actually referring to 1600 employees in the Mac user group. These are folks interested in Mac, and have joined an internal user group. It doesn’t mean they have been issued a Mac for work, in fact I suspect most have not. The Mac@IBM site is employee run, not official internal support…think of it as hints and tips like you read here. (I am a member, and have a personal Mac at home, not one for work).

There are people with Macs, just as there are at any large corportation, and yes IBM pays for them if there is a valid business justification. Otherwise, the standard machine is a Lenovo Thinkpad, which is fully supported by IT. Mac is not to my knowledge.

You also mention IBM employees getting discounts on Macs, or swapping our Thinkpads for Macs. I know of no swap program for any company issued PC, Mac or Thinkpad. But we do indeed get discounts on Macs. We also get discounts on Fords, Chevy’s ,Saabs, TVs, stereos and Walt Disney World park tickets, thru corporate benefits programs. The discounts are not that great, so don’t get jealous. It won’t cause you to buy a Mac over a Dell if you are not inclined to do so in the first place.

I disagree with your tone that seems to suggest there is some big Mac movement in IBM. I don’t see it. But, there are movements in IBM to support what customers use to run their business, as it always has been. As Macs become more prevelant in customer shops, they likely will in IBM too. I suspect that is the strategy, if any at work, not some targeted Mac effort.

15 Partners in Grime { 05.19.08 at 11:23 am }

The district I work for prohibits me from bringing my Mac laptop to work, let alone allowing me to connect it to their antiquated Windows network.

16 MP: Mac OS adoption rate in the enterprise increases and accelerates | Macro Principles { 08.28.08 at 9:16 am }

[...] IBM launches a pilot program to bring Macs inside: the highly positive results direct from IBM (86% of the pilot users preferred to keep their Mac at the end) and a more strategic view [...]

17 » Easing over to open software platforms -- Coevolving Innovations -- Blog Archive -- … in Business Organizations and Information Technologies { 09.27.08 at 9:36 pm }

[...] IBM Research, there’s been a pilot program to try out Macs. While Thinkpads used to be the only choice for IBM employees, IBM sold its PC division to Lenovo [...]

18 » Easing over to open software platforms -- Coevolving Innovations -- Blog Archive -- … in Business Organizations and Information Technologies { 09.27.08 at 9:36 pm }

[...] IBM Research, there’s been a pilot program to try out Macs. While Thinkpads used to be the only choice for IBM employees, IBM sold its PC division to Lenovo [...]

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