Windows 7 Release May Put the Brakes on Apple Enterprise Growth

By Don Reisinger  |  Posted 2009-07-23

Windows 7 Release May Put the Brakes on Apple Enterprise Growth

Apple announced its quarterly financial data July 21 and, once again, the Mac and iPod maker is performing extremely well.

According to Apple, its quarterly profit has risen to $1.23 billion, representing a 12 percent gain year-over-year. It beat Wall Street estimates on revenue and earnings per share. Once again, the company is one of the most profitable in the tech industry.

Apple's success is partly due to its vision. The company wasn't content to simply offer computers, so it analyzed the space and delivered compelling products that appeal to consumers across a wide array of markets. There's no debating that Apple has achieved its success in no small part because of the consumer appeal of its products.

But is that all? Is the company enjoying this success solely because of its own vision? It's debatable. A quick glance at Apple's financial data tells a slightly different tale: Since the release of Windows Vista, Apple has been far more profitable than it was when Windows XP was leading the charge for Microsoft. Granted, that's partly due to the success of the iPod and the release of the iPhone, but is there more to it than meets the eye?

Vista was a nightmare for Microsoft. Designed to be the follow-up to XP and the operating system to carry the Microsoft banner going forward, it failed in the enterprise. Most companies opted to stick with XP out of fear that Vista's hardware requirements were too great. Worse, it suffered from compatibility issues when it was released, causing headaches for some companies when mission-critical applications stopped working on the new operating system.

It got so bad that Dell, Hewlett-Packard and other major vendors gave users the option to exercise "downgrade" rights, allowing customers to buy a Vista PC but have the vendor install XP instead.

The enterprise had two options after Vista was released: Stick with outdated hardware until Windows 7 hit store shelves or venture into uncharted territory by buying Macs and deploying Mac OS X networkwide. For some companies, the latter option was impossible-they were using applications that only worked with Windows. But other companies weren't tied down to a single operating system and opted instead to try out Apple products. Since then, Apple's market share has grown consistently.

At the same time, Apple's iPod and iPhone business has grown, as well. Even consumer market share has grown in the same period. Part of that might be due to Vista and Microsoft's many false starts.

What Windows 7 Could Mean for Mac OS X

But if there is a correlation between Mac sales and Vista, wouldn't there also be a negative correlation between Mac adoption and Windows 7's success?

Windows 7 probably won't stop Apple's rise in the consumer space. The iPod and the iPhone are contributing heavily to its success and not even Windows 7 can stop that. But in the enterprise, it's entirely different. Those companies that moved to Mac OS X or are considering deploying Apple's operating system might need to think twice. Windows is still the leader in the enterprise for good reason. Unlike Mac OS X, Windows is the operating system platform for almost every software package designed for businesses. It's a more business-friendly operating system. Apple's Mac OS X doesn't enjoy those same benefits.

In the end, it's Windows 7 and its value that will dictate how well Mac OS X will perform in the enterprise going forward. If Windows 7 can live up to the hype, Apple's growth in the enterprise will be stymied. Companies that had thought about getting new hardware to replace their outdated XP computers will need to choose between Windows 7 or Mac OS X. As long as Windows 7 ships to the enterprise with as much value as Microsoft has promised, Mac OS X won't be the chosen operating system. Microsoft will be able to return to absolute dominance in the enterprise.

As long as Microsoft releases operating systems that don't quite match the requirements of the enterprise, companies will think about deploying Mac OS X. That's why Windows 7 is so important. If it can live up to its promise, companies will adopt it, they will opt for an HP, Lenovo or Dell PC instead of a Mac, and Apple's growth in the enterprise will end.

Windows is an extremely powerful operating system. It dictates the enterprise market. It controls how companies do business. And, it seems, it plays a part in Apple's success. But with Windows 7 promising greater appeal than Vista, Apple might already have enjoyed its best days in the enterprise.

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