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 THE STAT 26Percentage of wireless customers who use their cell phones to take picturesMore Vitals
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AUGUST 5, 2003
Picking Apple as a Server Solution Some companies are finding that OS X and Xserve are a viable, sometimes cheaper, alternative to Windows-based networks. That could be a big help Two years ago, Jon Moog, chief information officer for RiskWise, considered giving Apple Computer the boot. Moog's St. Cloud (Minn.) outfit, which screens credit-card applications and does fraud detection for financial institutions and other companies, had used Apple gear as its primary computer system for years. That put RiskWise out of step with most of its peers -- but Moog's main problem was that his Mac hardware and software was just getting old. He put in countless hours researching alternatives, such as computers that run the Linux operating system. In the end, he re-upped with Apple (AAPL ). What sold Moog? First, Apple had come out with OS X, a new version of its operating system -- basic software that runs a computer -- that's patterned after the industry-standard Unix operating system. Moog found that OS X was better supported and offered much easier-to-use development tools for writing new programs from scratch. Then in the spring of 2002, Apple unveiled a new corporate server, called Xserve, that Moog is using to run his company's various databases. Apple followed that this past February with its Xserve RAID (redundant array of independent disks) storage server -- and in March with a cluster of Xservers that can be used for scientific research. Over the past year, Moog has bought 200 Xserve boxes to use for transaction processing in RiskWise's two data centers and one backup site. "STARTING TO TAKE NOTICE." Moog is among a growing coterie of technology managers who are giving Apple a chance to show that it can succeed as a supplier to corporations -- for something other than the Macs used in graphics departments. At Apple's June developer conference, where for the first time it offered sessions for IT managers on upcoming corporate products, crowds filled the room. "I think people are starting to take notice," Moog says -- particularly those who already use Apple for education or graphics work. That could be a life preserver for Apple, whose PC market share slipped from 4.1% of U.S. shipments in the second quarter of 2002 to 3.5% in the same quarter of 2003, according to tech consultancy IDC. Corporate sales now account for about 39% of Apple's total revenue, according to Bear Stearns. And computer spending by small to midsize businesses -- the ones Apple targets most aggressively -- looks to be recovering sooner than that of larger companies, says Roger Kay, an analyst with IDC. Grabbing those greenbacks could complement Apple's other strategy of introducing a wider array of consumer-electronics products. Combined, those initiatives could help Apple offset its market-share losses in consumer PCs and boost annual revenues faster than its current mid-single-digit growth rate. BROADER LICENSING. Apple at least has a shot at signing up more corporate customers because unlike in PCs, where it charges a premium, it's pricing corporate server products to grab market share, even as it's designing them to interact much better than before with other brands of equipment on a network, analysts say. For instance, Xserve RAID costs about $4 per gigabyte of storage -- or about one-third less than a comparable Windows product, claims Alex Grossman, director of storage hardware at Apple. What's more, Apple's servers come with unlimited-use licenses for the accompanying software, while Microsoft requires Windows customers to pay for additional copies of its latest Windows server operating system. Thanks to Xserve, Apple's shipments of PC servers rose 24% in the first quarter of 2003 vs. the year-earlier quarter, even though its market share has remained roughly the same, at less than 1%, according to IDC. Next, Apple's newest version of OS X, called Panther -- which is scheduled to debut later this year -- coupled with new emulation software from Microsoft (MSFT ) will let corporations run Windows applications on their Macs more smoothly. That's a major plus, considering that nearly all companies use Windows.
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