Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Apple Should Go After the Corporate Computing Market

By Anders Bylund - Updated Apr 5, 2017 at 9:26PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Why not slide on in and make more money.

When Apple (Nasdaq: AAPL) sells you a computer, it comes loaded with Mac OS X -- and that's simply a very pretty version of Unix.

That's right, those sleek and sexy iMacs and PowerBooks run enterprise-grade operating systems by default, on top of top-of-the-line Intel (Nasdaq: INTC) processors. It's in the same platform family as Linux and Unix, and its cousins are running lots of Web servers, business intelligence systems, and ultra-proprietary software for nearly every major business in existence.

There are two very big and largely untapped opportunities in enterprise computing for Apple: workstations and servers. So how come Apple doesn't load up every data center and cubicle maze with Leopard-powered servers and desktops, the way Hewlett-Packard (NYSE: HPQ), IBM (NYSE: IBM), and Dell (Nasdaq: DELL) do?

First, we take Manhattan ...
If you're used to working on your own Mac at home, then why shouldn't you ask your employer for an Apple system at your desk, too? A comfortable worker is a productive worker, and there's nothing a PC can do in the workplace that a Mac can't do just as well. You can even buy PC emulator Parallels for OS X, sort of a lightweight VMware, to run any Windows application your heart desires.

The exact size of this market is a bit nebulous, as most system builders lump PCs for the corporate world together with consumer systems, but it's clearly a massive opportunity, and Apple has hardly made a dent in it so far. There are billions of dollars to be made here.

And then we take Berlin!
I do have a market size estimate for servers, though. According to research firm Gartner (NYSE: IT), global server sales topped the $54.8 billion mark last year, up 3.8% from 2006. And Apple ain't even playing that game. It doesn't take much of a market share here to make a big difference.

OK, so there's the Xserve system with Mac OS X Server running on up to eight Xeon cores. The system gets great reviews from the industry press, thanks to a full set of enterprise must-haves like RAID storage, hot-swappable disks and power supplies, and 24/7 technical support contracts. But you can't say that Steve Jobs and his crew are pushing this option very hard. The company doesn't break out business-class systems in its financial reports, management has hardly even mentioned the Xserve in the last 10 earnings calls, and all of the considerable marketing muscle is flexing for consumer products like the iPhone, iPod/iTunes, and MacBook Air these days.

Apple's recipe for business-class success
There's no shame in being a dominant consumer gadget guru, but it's sort of sad to see a brutally poignant enterprise market passing Apple by almost entirely. Hire a few more sales staffers, perhaps use some of that $19 billion cash stash to buy your way into the data center, and establish Apple as a force in enterprise computing, and you'd open up a hornets' nest of potential revenues and the concomitant profits.

It might be tough at first, working the mercurial Apple into staid IT departments with all the suit-wrangling, but it would be doable, and the support contracts alone would make the effort worthwhile in the end. And at the same time, staffers could get their companies used to Apple systems from the other side, tapping away at their MacBooks or some new, corporate-styled iMac version.

Think different, Apple -- even if it means going corporate.

Further Foolishness:

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Apple Inc. Stock Quote
Apple Inc.
AAPL
$171.18 (3.55%) $5.86
HP Inc. Stock Quote
HP Inc.
HPQ
$37.29 (0.97%) $0.36
International Business Machines Corporation Stock Quote
International Business Machines Corporation
IBM
$121.58 (1.39%) $1.67
Intel Corporation Stock Quote
Intel Corporation
INTC
$52.57 (3.10%) $1.58
Dell Technologies Inc. Stock Quote
Dell Technologies Inc.
DELL.DL
VMware, Inc. Stock Quote
VMware, Inc.
VMW
$116.65 (0.93%) $1.07
Gartner, Inc. Stock Quote
Gartner, Inc.
IT
$316.01 (2.79%) $8.59

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
652%
 
S&P 500 Returns
142%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/08/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.