IDC: Apple making inroads in enterprise market

Macworld - A recent report by market research firm IDC gives Apple Computer Inc. high marks for its efforts in the enterprise storage and server markets. While the company is best known for its iPod and Macintosh product lines, IDC analysts say the competition is starting to take note of what Apple is doing in the enterprise market, as well.

"Their focus has been in a couple of key verticals, especially in markets like digital media -- you can't go anywhere without having Apple in that market," said IDC analyst Kelly Quinn. "They have done a really good job of penetrating that market -- some of the scientific and technical markets are a crossover from that because of the high-powered computing aspects."

While Apple agrees that its focus has been on more traditional markets like digital media, the introduction of the Xserve RAID storage system has given the company a new set of markets to target.

"Nobody has the penetration we're seeing in these key vertical markets that are so important to Apple, but just as significant is the non-Mac space," said Alex Grossman, Apple director of product management, server hardware.

Those non-Mac markets include corporate customers and other markets that do not run in an end-to-end Apple environment. Grossman said that approximately 40% of Apple's Xserve RAID shipments are going to non-Mac or heterogeneous environments.

The introduction of new technologies is also helping the adoption of Apple's enterprise products. Grossman points to the growth of HDTV as one example of companies that are upgrading their current facilities and turning to Apple.

"Do I buy something new that is proprietary, locked in and expensive? Or do I buy something new that is open, faster and cheaper? That is where we see an opportunity," said Grossman.

IDC also praises Apple's strategy of focusing its attention on specific vertical markets. The researchers feel that there is still a lot of room to grow in the traditional markets where Apple is currently entrenched.

"Apple is trying to be careful in picking what verticals they target," said IDC analyst Natalya Yezhkova. "For a company that has been in the market for two and half years, focusing on specific vertical markets is the best approach. Frankly, they still have a lot of opportunities within this market."

Since introducing its storage offerings in February 2003, Apple has shipped 76 petabytes of storage with its Xserve RAID systems alone. The growing popularity of Apple's Xserve 1U rack-mounted server and Xserve RAID storage products is starting to get the attentionof Apple's enterprise competitors, IDC said.

"That is one of the reasons [Apple is] trying to be very quiet about what they are doing," said Yezhkova. "Other companies are looking for any information on Apple to understand if they are competitors or partners."

While Apple hasn't specifically mentioned its server products in its Intel transition announced earlier this year, IDC sees it as a positive move for the company's growing enterprise business.

"I absolutely do not think it will hurt," said IDC's Quinn. "It will actually work to their benefit in the x86 server market. It seems like a very savvy move on their part."

IDC and Macworld are both owned by IDG.

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