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November 1, 2008 11:44pm
Posted in: Posts ,Stories
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Today, Steve Jobs is the toast of the business press. The charismatic CEO of Apple can summon the collective attention of every journalist in the country with a smirk and a wink whenever he introduces another wonder gadget. The products he has master-minded are legendary: Macintosh, iPod, iTunes, iPhone. He has a hand in the entertainment of nearly every home in the United States and millions more around the world. And he’s a non-entity in the IT operations of other companies.

But as successful as he has been in making entertainment devices for the masses, Steve Jobs doesn’t have a clue about how to sell anything to business customers. From 1981’s defective Apple III to the $10,000 NeXT Computer to Apple’s current efforts, the offerings that Steve Jobs has created for enterprise technology customers have universally flopped. The company’s current high-profile effort in that arena is the xServe, a sleek metal computer meant to handle the file-sharing needs of a small or medium business. While beautifully designed in the way that all of Apple’s products are, the xServe screams to the world of business that it was not designed with them in mind. People working in technology at companies want to buy something that looks reliable, fast, and, most importantly, too complex-looking for ordinary people to manage. Simple hardware doesn’t connect with its intended audience, and the xServe has no traction whatsoever with business customers.

This is not a new problem for Jobs. Back in 1985, during his first tenure at Apple, Jobs commissioned a commercial entitled “Lemmings” that aired during the Super Bowl. Apple is justifiably acclaimed for its innovative “1984” ad that launche the Macintosh computer by comparing Apple rival IBM to domineering totalitarian leader Big Brother, but that rebellious image backfired on Apple the following year. In “Lemmings,” legions of blindfolded, pale ghouls in business suits in a line march in lockstep off of a cliff while whistling an eerie version of the tune “Hi Ho, Hi Ho, It’s Off to Work We Go.” No one steps out of the deadly parade, until one brave maverick removes his blindfold, adopts the Apple Macintosh Office system and sees a brighter day. The star of the commercial must have been a maverick, as the advertised Macintosh Office required a file server that never actually made it to market. Moreover, the spot underscores the fundamental gap between Jobs and the customers that IBM connects best with.

The commercial is offensive to business customers for any number of reasons, including its blanket condemnation of typical work and, worse, the insults it directs at IT managers. Insults never convince anyone to change. In recent years, an older, wiser Jobs has taken Apple back to the top as a consumer brand, but he still can’t connect with business customers. This was dramatized in another Apple ad campaign, entitled “Get a Mac.” In the series of ads, a chubby, bespectacled and besuited gent identifies himself as a PC running Windows. By contrast, a hip, young and fun twentysomething personifies an Apple Mac. To Apple’s credit, the spots position the Mac as being good at fun tasks, and PCs being good at business tasks. It’s a light-hearted rejoinder of the same old debate, and it acknowledges that Apple still has never made real in-roads in selling computers to businesses. Though Apple’s share of home computer sales has risen steadily in the last decade, its business market share shows no signs of increasing, and it likely never will with Jobs in charge.


14 Responses to “Steve Jobs and Business Customers”


  1.   Carl King Says:

    This is an interesting perspective — very thought-provoking. I think Jobs does know what his customers want, but it’s quite clear that he doesn’t have a lot of business customers because he understand consumers so well.

    Do you think he can ever change? Should he?

    I’ve been reading some of the excerpts, and I can’t wait to see the rest of it! I feel like it’s just what I’ve been waiting for.

  2.   Cult of Mac Says:

    [...] shameless self-promotion, but I bring it up for another reason. The top post of the moment is my epic manifesto on why it is that Apple has never made significant in-roads in the enterprise space, while IBM remains the machine of [...]

  3.   Joel Fagin Says:

    I’m not sure why Steve should go after business. It’s a little like expecting Microsoft to go after Google (which, yes, they did, but they shouldn’t have). Sure, there’s money there, but do these people really have to be everything to everyone? You might as well expect them to go after the lucrative car market as well.

    Apple is successful and profitable. It practically owns two markets, is rapidly taking over a third (arguably) and the computing side is growing at a neat rate as well. Why do they need to expand into business markets? Why not just let them do what they’re good at?

  4.   Andrew Says:

    I think this is a questionable argument.

    Business IT has become an increasingly commodity market. That’s why IBM has been selling off its hardware divisions and focusing on services – and losing that battle too.

    The X- Serves and other “business” class hardware is there primarily to serve smaller companies looking to expand their Mac networks – video production facilities, design firms etc.

    I don’t think anyone who seriously studies the market would consider it a shot across the bow at IBM, SAP, Oracle or any other business that focuses primarily on corporate markets.

    Getting into enterprise in a substantial way would require a multi-billion dollar investment spread over several years in a market that is finding it harder and harder to make profits.

    Steve is not stupid. Trying to divine his business acumen from a TV commercial is probably not the best way to understand his and Apple’s reasoning.

  5.   Mac News Update – MacPro, iMac, iPhone, Macbook, and Macbook Pro News » Blog Archive » Court Blocks Papermaster from Starting Work at Apple Says:

    [...] shameless self-promotion, but I bring it up for another reason. The top post of the moment is my epic manifesto on why it is that Apple has never made significant in-roads in the enterprise space, while IBM remains the machine of [...]

  6.   Max Says:

    Historically, Jobs has always been an antibusiness person and constantly shows it, intentionally or not. He has reached private customers with the “passion and culture” Apple puts in its products but that just isn’t good enough for corporate clients.

    The question is whether Apple really isn’t any good at making products for businesses or is it simply because the company doesn’t know who to sell to such customers.

  7.   AaronS Says:

    “But as successful as he has been in making entertainment devices for the masses, Steve Jobs doesn’t have a clue about how to sell anything to business customers.”

    I would argue that it’s not that he doesn’t have a clue, just that he doesn’t care (and that Apple as a whole, with the direction Jobs has given, doesn’t care). The direction that Apple is moving is into the consumer space and pro video / photo space. It’s been that way for years. That’s why they stopped making the Xserve RAID.

    ——

    “People working in technology at companies want to buy something that looks reliable, fast, and, most importantly, too complex-looking for ordinary people to manage.”

    As an IT Manager myself, anyone with that outlook is an idiot. Not all IT people have a holier than thou outlook on our users.

    ——

    “its business market share shows no signs of increasing, and it likely never will with Jobs in charge.”

    That’s not his (or Apple’s, since, you know, Apple is more than Jobs) intent. Apple is not a company that will ever specialize in high end server hardware. There is little reason for them to.

    They have streamlined their focus to 3 main areas: Mac, iPod, and iPhone. They are already starting to spread themselves thin, so there is no reason to spread themselves even thinner in an area they don’t care about.

    I believe that it isn’t that they can’t, but that they don’t want to.

  8.   Bob Says:

    If Exhibit A of your case against Apple’s business impact is a ad that aired more than twenty years ago, your theory might need some updating.

    Working in web development, the amount of macs in the typical office has shifted from less than 25% to more than 75%. At my current employer’s site, their fleet of ThinkPads has been almost entirely replaced by silver notebooks with glowing apples.

    For these developers (who have no allegiance to the Apple cult), their preference for Apple is based on UNIX utility, great Mac developer tools, and a more usable reliable OS. It also runs Windows, which makes it the only system that can test both Windows and Mac.

    Obviously, web developers have a different set of priorities than most enterprise customers. But I have observed a noticeable shift toward Macs with our clients as well. I chalk it up to excellent compatibility and a universal loathing of Vista, which shouldn’t be underestimated.

    To say things are the same as they were twenty years ago — and especially to say the dynamics are the same — misrepresents the very palpable progress Apple has made by building the most reliable, most compatible business computer on the market.

  9.   Peter Says:

    I appreciate all of your thoughts. I will say that you’re reading this post too narrowly if you’re under the impression that “Lemmings” is the only reason that I think Steve Jobs doesn’t connect with business customers. It is, as Aaron noted, that Steve doesn’t care about business customers, has worked his whole life to build a company that is nothing like business as usual, and hates technology that is needlessly complex.

    Ironically, that’s what enterprise-level IT lives for. If you’re in IT, you take pride in being the only people able to administer and fix the hardware you’re on the hook for. Not just the servers and back-end stuff where Apple is largely not in the market, but on the desktop support side as well. IT people love technology that’s simply too big for their clients to deal with on their own. It might be easy to use under the surface, but big iron that requires training justifies and validates their experience. It’s because Apple doesn’t get those gatekeepers that Apple products are always a big challenge to bring in the door. It takes executive mandates to overcome it, which is why some creative industries (web development among them) love their Macs, while most enterprise customers stick with what they regard as the safe PC alternative.

    Ironically, all of this is happening at Apple’s biggest opportunity to make a dent in the corporate market. Vista is flailing, and the new Mac products are highly capable and widely compatible. But Apple is still doing things wrong for that market by shipping new laptops that don’t work with digital projectors out of the box. It’s $29 to hook up a new MacBook to a projector — minimum. No business customer will pay that much of a surcharge just to maintain minimum functionality. Apple should be making up market share in the enterprise market today, but its leadership’s resistance to meeting the market’s expectations means that Mac OS X is guaranteed to remain a fringe platform in the corporate world.

    That’s what I’m saying.

  10.   Chris Maxcer Says:

    I, too, doubt that Jobs cares much about trying to sell to businesses — where’s the joy in that for a guy like Jobs? Seriously?

    The other problem with selling to businesses is that your big customers tend to like to know what’s coming — they’ve got budgets, want to plan on product upgrades, etc, and how much does Apple like to pre-announce anything? It’s pretty clear that few businesses could keep quiet, even with non-disclosure agreements in place, and spilling the beans would wipe out the press power Jobs has been able to create — as in, “Fly to Cupertino for a briefing about something we’re not going to tell you about until you’re already here.”

    And then some larger business customers like to have input into the products they want to buy . . . and I also doubt that Jobs is interested in listening to a customer that feels entitled to share the opinion because of his purchasing budget.

    Think about this: does anyone think Steve Jobs wants to stand up on a stage and say, “We’ve created the BEST BUSINESS NOTEBOOK EVER!”

    Sure, there’s honor in creating business notebooks, but I don’t think that’s something Jobs — and Apple — aspires to. Apple is more about creating passion if not outright lust, and khaki pants and blue button up shirts don’t generate a heckuva lot of passion in anyone, near as I can tell.

  11.   Ian Joyner Says:

    It’s not Apple – it’s the people who won’t look at anything that is not IBM or now Microsoft. It’s been the same in this industry from before Apple came along. Other companies in the BUNCH had better offerings – just look at the Burroughs B5000, but could they sell into the IBM mindset? No. They fear they’ll lose their jobs. At least if you bought IBM (Windows) and fail, you’re the same as anyone else. Buy something different though and it will be difficult to succeed as others conspire against your success.

    It is also not an argument to cite a few failures from Apple, like the Apple III and Lisa. Other companies had their own failures, like the IBM PC junior. You could say the IBM 360, which was a horrible machine, was also a mess, but being IBM it was just accepted.

    I remain optimistic though, these die hards do seem to be becoming less in number. I think Apple is quite prepared to sell to business, but it may as well not waste a lot of money trying to do so until the IBM mindset disappears.

  12.   Mac News Update – MacPro, iMac, iPhone, Macbook, and Macbook Pro News » Blog Archive » Australia has the world’s cheapest iPods Says:

    [...] shameless self-promotion, but I bring it up for another reason. The top post of the moment is my epic manifesto on why it is that Apple has never made significant in-roads in the enterprise space, while IBM remains the machine of [...]

  13.   Kirk Varner Says:

    Could it just be that Apple and its CEO thinks differently? That the creation of the Xserve was never about replacing gigantic blade server farms, but to power small to medium businesses that were Mac-based shops in the first place?

    (Except for those pesky university types who built huge supercomputer-sized clusters that were powered by…Xserves!)

    Nah, that can’t be it–because it is important to always bring Apple back to that “Why aren’t you guys more like Microsoft?” argument. Because Microsoft is the standard of success when it comes to everything it touches? Uh, to quote Dr. Evil….”how about…No?”

    Of course you’re right–Jobs wants to be a big time business computer maker, the same way Bang and Olufsen wants to be a maker of electronics that are sold at Wal-Mart.

  14.   NickBob Says:

    Bob is right. A post based on a 21 year-old commercial is ill-informed and lazy. Jobs worked very hard to break into the business market with NeXT, had some notable successes but in the end was swamped by the Windows tsunami. On his return to Apple, he focused on the consumer & creative markets, with considerable success. No doubt Apple could do better in the enterprise market at this point, but they remain a focused company even as they grow in a mature market. Jobs is letting the market come to him. It may not work out that way, but this story is far from over.

    Oh, and Max- you’re an idiot. Jobs was simultaneously CEO of two profitable high-profile tech companies, as well as the founder of two revoluntionary tech firms. He’s on the board of Disney, a multi-billion dollar entertainment conglomerate. He lives to run businesses, and you label him “anti-business”? It’s that kind of nitwit thinking that lead to floundering businesses like GM, Dell, and perhaps even Microsoft. The business world needs more of his “anti-business” attitude, and less of the lemming-like leadership that has no vision of where it needs to go. Which is, by the way, the moral of that ancient commercial- and he was right then, even if he hurt feellings in the boardrooms.

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