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Making the Grade: Why is Apple ignoring services in the enterprise?

Coming off the heels of Apple’s March event, it’s clear that Apple is all in on services. After all the services are released, you could easily spend $50+ with Apple on recurring charges for Apple Arcade, Apple News+, and more. Services don’t have the massive margins that a $1200 iPhone XS Max does, but one advantage is that they are recurring. Once Apple gets your $9.99 per month for an Apple Music subscription, you will likely have it for a while, and you are likely to continue to buy at least some of Apple’s hardware devices. An iPhone user might have an Apple Watch and a Roku TV, so it makes sense for Apple to have Apple TV+ on the Roku as well. Apple, in 2019, is all in on services. What about Apple’s enterprise services?

About Making The Grade: Every Saturday, Bradley Chambers publishes a new article about Apple in education. He has been managing Apple devices in an education environment since 2009. Through his experience deploying and managing 100s of Macs and 100s of iPads, Bradley will highlight ways in which Apple’s products work at scale, stories from the trenches of IT management, and ways Apple could improve its products for students.

If you look at Apple in the enterprise, it’s a 180-degree approach. They seem to be very content with letting other companies handle the services while it handles hardware. Why is that? I’ve been pondering that for the past few weeks, and I’ve come up with some ideas.

Services are Expensive to Change

In the enterprise, once a customer signs up for an Office 365 subscription or begins to build their CRM around Salesforce, they likely won’t change for many years. With enterprise deployments, training is a huge consideration. Existing workflows are a huge consideration.

Even if Apple launched enterprise tools for email, calendar, contacts and document storage today, would anyone switch? I’ll add that I still think Apple should be in the identity management world, but I understand why they are not. Companies don’t change software and services providers as consumers do. If I decide to switch from Dropbox to iCloud Drive, I can do it in the time it takes me to re-upload my documents. Enterprise customers have to build migration tools, hold multiple training sessions, and then deal with support tickets after the migration.

Services Require a Price Commitment

Apple products are not known to be the cheapest, and enterprise services would likely run into the same thing. Apple’s hardware can command high margins because of the reliability of it, and the fact that consumers prefer it. In the enterprise services market, it has to be either 10x better or 10x cheaper. Apple isn’t going to be 10x cheaper, and it will likely not be 10x better. When Google launched Google Apps for your Domain (now G Suite), it was 10x cheaper than anything on the market. Companies went from buying CapEx heavy server setups for Exchange to paying $5 per month per employee. In the K–12 market, selling services for anything but free is going to come off as a non-starter. Very few schools would pay for iCloud for Schools when G Suite is free.

Wrap-up on Apple Enterprise Services

While I’d love to see Apple go all in on software in the enterprise, I understand why they don’t. It’s not in Apple’s DNA to sell (or giveaway) expensive services that are entrenched in IT workflows. They are content to let companies like Jamf integrate with services like G Suite.

My concern is that Apple’s lack of services leaves its hardware in a tough spot in the future. Software is hard to change, but services are even harder. Unless your hardware is tied heavily to services, it can easily be replaced. For most organizations, it would be easier to change from macOS to ChromeOS than it would from G Suite to something else.

Photo by Helloquence on Unsplash

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Avatar for Bradley Chambers Bradley Chambers

Bradley lives in Chattanooga, TN where he manages Apple devices for a private school. 

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