Taking a bigger bite of Apple: Is it time for the channel to take the Mac-maker more seriously?
Heavyweights including Jigsaw24's Roger Whittle, TD Synnex's Dave Watts and Gartner's Ranjit Atwal weigh in
Since Tim Cook took over as CEO in 2011, Apple's revenues have virtually quadrupled, while its market cap has swelled from $349bn to $2.4tn.
What's more, in its most recent quarter, Apple bucked the wider downturn in fortunes for Big Tech by racking up record Mac sales and - most poignantly for the channel - registering "strong double digit" growth in its enterprise business.
The Mac, iPad and iPhone maker is hardly a newcomer to the business market, crossing the threshold of serving the entire Fortune 500 a decade ago and boasting a $25bn enterprise business as long ago as 2015.
But as its ‘Mac Means Business' ad campaign with CDW on the London Underground this summer underlined (see map, below), the consumer-led vendor is redoubling efforts to increase its enterprise penetration.
Apple is still seen by many as having, at best, an ambivalent stance towards the channel that serves this space, however, finishing 39th out of 45 vendors in CRN's most recent Vendor Report. "There is a definite air of ‘you are lucky to do business with us'," read one typical response from one respondent at a large reseller.
So how should a sceptical channel be approaching this increasingly mighty but enigmatic vendor?
Here we examine Apple's enterprise progress, the key to success for working with the fruit-based vendor, and how much headroom Apple has for further growth.
What's driving Apple's enterprise growth?
On its Q4 earnings call, Apple CFO Luca Maestri revealed that Apple's enterprise business grew "strong double digits" in its fiscal 2022, picking out Cisco's Mac programme as a case study for its progress here.
But despite Apple's recent market share gains, senior director analyst at Gartner, Ranjit Atwal, characterised its share in the enterprise PC market as "creeping up", rather than surging.
According to Gartner's figures, Apple's share of the PC and tablet market in western Europe has risen from 8.97 in Q1 2020 to 11.74 per cent in Q2 2022.
Take out iPads, and the equivalent figures shrink to 2.64 and 5.41 per cent, respectively.
Gartner's figures show Apple's marketshare spiking during the early part of lockdown and generally plateauing or even dropping back slightly since then (although its data does not include Apple's most recent, bumper quarter).
Atwal said Covid has been a double-edged sword for Apple in the enterprise.
The general shift to a cloud environment fuelled by the pandemic has "probably made Apple's job a little bit harder" because it is now fighting not only against Windows OS but the whole Windows suite including Teams, he said.
But, at the same time, several Covid-related trends are conspiring to make Apple more of a natural competitor to HP, Dell and Lenovo in the workplace, Atwal explained.
"The choices on the table have increased because businesses have worked out that they're more flexible than they realised. And then Apple maybe becomes more of a choice than it ever was previously," Ranjit Atwal, Gartner
"Before the pandemic, businesses were shy to experiment," he said.
"But the pandemic has shown that they can move quickly. They can move to a cloud environment or to different operating systems. The choices on the table have increased because businesses have worked out that they're more flexible than they realised. And then Apple maybe becomes more of a choice than it ever was previously.
"The other thing that's come out through the pandemic is the reliance on devices. Reliability and productivity were around as questions before, but never really part of a strategic intent.
"And the last thing is that users have generally increased their digital dexterity, which again bodes well for Apple.
"So there are a couple of trends moving forwards where Apple becomes much more of a choice than it was previously."
Apple's move two years ago to freeze out Intel and begin producing its own chips for Mac may also put it in the box seat among enterprises worried about potential long-term supply chain disruptions, Atwal added.
See next page for more on how quickly Apple is growing in the channel, and how partners can get the best out of Apple...
Taking a bigger bite of Apple: Is it time for the channel to take the Mac-maker more seriously?
Heavyweights including Jigsaw24's Roger Whittle, TD Synnex's Dave Watts and Gartner's Ranjit Atwal weigh in
How quickly is Apple growing in the channel?
Although Westcoast sales director Phil Bell recently told CRN that Apple's growth spurt has made it "the largest brand for the distribution market", the Cupertino-based vendor has a famously narrow and specialised channel.
Alongside its retail-focused Apple Premium Reseller partners, Apple has traditionally thrown its weight behind only a small handful of partners, including Apple specialists such as Jigsaw24, Academia and Sync.
Just four partners - Academia, XMA, Albion Computers and Sync - gained a place on the latest Apple HE Framework, a £200m Apple purchasing vehicle for universities.
But there are signs that the big resellers that have traditionally lined up behind Wintel are beginning to cosy up more to the fruity vendor.
Talking to CRN, Dave Watts, UK&I managing director at Apple distributor TD Synnex (pictured above), said partners are simply responding to customer demand.
"I think from a CTO/CISO point of view, there is a demand for Apple products in a way that perhaps there wasn't previously," he said.
"Some of the larger Apple dealers are making great strides in enterprise. And you used to only see half a dozen Apple dealers promoting Apple. But Softcat and CDW have now got a cracking Apple business, so Apple's model is slowly changing."
In a recent interview with CRN, Softcat CEO Graeme Watt confirmed that Apple is growing "at premium rates" within the portfolio of the UK's largest reseller.
"We see opportunities to grow even further with Apple. I think there's more we can do on phones," Graeme Watt, Softcat
"I think they've taken share in the device and tablet market for sure," he said.
"I think a small proportion that has been related to supply chain: they've been better at managing supply chain than some of the mainstream manufacturers we've been dealing with.
"And I think we see opportunities to grow even further with them. For example, I think there's more we can do on phones, which isn't a major part of our portfolio today, although that's obviously quite a commodity."
Atwal at Gartner emphasised that any efforts by Apple to grow its penetration in the channel will be a long-term project.
"Building out relationships with a channel is a long-term strategy to get them in front of clients that they might not otherwise get in front of," Atwal said.
See next page to find out how Apple fared in the most recent CRN Vendor Report, and how its partner strategy may evolve...
Taking a bigger bite of Apple: Is it time for the channel to take the Mac-maker more seriously?
Heavyweights including Jigsaw24's Roger Whittle, TD Synnex's Dave Watts and Gartner's Ranjit Atwal weigh in
How channel friendly is Apple?
Building a successful partnership with this famously secretive vendor is notoriously hard work, however.
The Cupertino-based vendor finished 39th out of 45 vendors in the most recent CRN Vendor Report, with a pallid Core Services average of 6.0 (see table, below).
Partners who marked Apple in the report (and it's worth noting that respondents were instructed to mark up to five vendors with which they did the most business only) praised its technology vision, but generally painted it as a high-handed and mean-spirited ally who favours direct sales over channel.
"We're lucky that we have a great partner account manager, but the wider account teams are so arrogant," complained one respondent at a large reseller, who scored Apple a 5 for Channel Strategy and Account Management. "There is a definite air of ‘you are lucky to be able to do business with us', and heaven forbid you ask about future product launches..."
"They can be very superior due to the value of their brand which can make them unfriendly and inaccessible a lot of the time," was the more nuanced assessment of another respondent, who scored Apple a 6. with us'."
As stories from CRN's archives show, Apple has at times forced its retail focused Premium Reseller partners to shell out six-figure sums on expensive refits that meet its lofty standards.
But although it is not a vendor resellers can pick up in the same way as HP, Dell or Lenovo, those who commit fully stand to enjoy commensurate rewards.
"If you play at Apple part time, if you carry it because it's just another vendor, that's not the right way to approach it," Roger Whittle, Jigsaw24
Having fallen in love with the Apple Mac on a year out after university, Roger Whittle set up his own Apple dealership, Nottingham-based Jigsaw24, in 1992. Today, it has grown to become the UK's largest Apple reseller, with fiscal 2021 revenues of £156m.
"If you play at Apple part time, if you carry it because it's just another vendor, that's not the right way to approach it," Whittle told CRN.
"You've gotten to embrace it. And I think for those that don't want, or haven't got the time to embrace it, then it's probably not for them. You need to really work at it."
Jigsaw24 is enjoying increasing success with Apple in a number of verticals, including manufacturing, transport, financial services, banking, retail and industrial, Whittle said.
Andy Wright, chief revenue officer at XMA, which sells Apple into education and the wider public sector, concurred, describing Apple as a "different beast to many of the vendors we work with".
"My advice for anyone starting down the route of working with Apple is to be open minded and listen to how Apple approach customers and the market," Wright (pictured below) said.
"You can then decide if Apple suit how your business works or if you can adjust your operating model to fit around how Apple need you to work. If you can't do one of these two things, then as a business, you are going to struggle to drive a mutually beneficial relationship with Apple."
Watts at TD Synnex was another to advise budding Apple partners to commit fully.
"What I'd say to partners is that Apple have got a great proposition, but their model is one in which you need to invest, because Apple require that of you," he counselled.
"If you're engaging with Apple, you need to really know that you can add value for them. If you can, I think it's a great time to be selling Apple into enterprise. There's a good appetite for it."
Apple may be known for its sleek and innovative products, but its secrecy around innovation makes it difficult for channel partners and enterprises to work with, Atwal at Gartner said.
Unless Apple opts to split out a separate strategy for enterprise, this is unlikely to change, he added.
"I don't think it's necessarily the case that Apple deliberately doesn't want to work with the channel, it's more the beast that they are makes them difficult to work with," Atwal said.
"They typically don't produce roadmaps, whereas all other vendors do, so that's where the difficulty comes from.
"Given Apple's nature, inherently it's not an easy leap over into the enterprise in terms of how they work with partners. Generally partners work for them, rather than Apple working for partners. Everyone makes money, but the partners jump to the beat of the Apple drum. There are a small number of partners, but large volumes going through them, and that's how they make money.
"If Apple is looking to move more into the enterprises, do they layer a strategy that is more enterprise focused? And how do they build that in without losing the innovation? It's a bit of a tightrope.
"The other question is how much growth they would need to anticipate in the enterprise [to do this]. Will they need it more moving forward than they have in the past?
See final page for more on how much headroom Apple has for growth in enterprise...
Taking a bigger bite of Apple: Is it time for the channel to take the Mac-maker more seriously?
Heavyweights including Jigsaw24's Roger Whittle, TD Synnex's Dave Watts and Gartner's Ranjit Atwal weigh in
What is the outlook for Apple in enterprise?
Despite its lukewarm performance in CRN's most recent Vendor Report, Apple ranked a creditable 11th in the Technology Leadership category (despite being marked down for some over its pricing strategy).
That put it ahead of all its major rivals (HP finished 13th, Lenovo 25th and Dell 34th).
Although Apple saw its share of the global PC market rise from 8.5 to 13.5 per cent year on year in Q3, Mac generated just $40bn of its $394bn fiscal 2022 revenues. Some $205bn of the total came from iPhones, $29bn from iPads and $41bn from iWatches and other wearables, home and accessories-related revenues.
Indeed, Whittle at Jigsaw24 picked out Apple's ability to lead the way across all the major device form factors as a key factor behind its decade-long bull run under Cook.
"How many people have got a bridge on their nose? By the last count, about eight billion. So [AI glasses are] a pretty important factor their form factor," Roger Whittle, Jigsaw24
"With the phone, the tablet and notebook, desktop, watch and headphones they have got six of the key form factors," Whittle said.
"Bill Gates wrote a book in the early noughties when he talked about the form factors. The human body has two arms, two legs, two eyes and so on, and that hasn't changed in 50,000 years. We walk around, we sit at home, we drive a car; these are the things that we do. Apple's response is: on handheld, they've got the phone; under your arm, they've got the tablet; on your lap, they've got the laptop; on your desk, they've got the desktop; on your wrist - and everybody has a wrist - the watch. Apple sell more watches than any other watch manufacturer in the world.
"And finally, and people don't remember this often, but it's important that they do - ears: headphones. I believe that the Airpods are a critical enterprise device. You can't do a proper Teams on Zoom meeting, you can't really exist in London, which is so noisy, without your headphones. I believe that if you leave your Airpods at home, it's metaphorically like leaving your car keys or your wallet."
Although Apple remains a way off challenging Lenovo, HP and Dell's dominance in the PC space, its success in the enterprise is defined by more than just Macs.
Whittle pointed to Apple's imminent launch in the virtual reality glasses space as a key enterprise battleground for the vendor in the years ahead.
"That's an area which Apple will be joining next year. And I think when they do they'll do it with great style and panache and take a leadership position," he said.
"How many people have got a bridge on their nose? By the last count, about eight billion. So that's a pretty important form factor.
"Think about a surgeon at the height of their powers, with a team of six around them. And they're doing a heart operation for a head of state. They don't want to just see the blood vessels. They want to almost get down to the molecular level. They could do so with these eye glasses. What about the construction manager who's 600 feet up on a gantry building HS2 or HS3 or HS4? They can't reach for their watch. They've got their glasses, and they've got their Airpods. So genuinely I think there is a marketplace for AV and VR glasses.
"Meanwhile, we've got the phone, the tablet, the notebook, the desktop, the watch and the headphones. And I don't believe that any other manufacturer has got a leadership position in any of those. So that's very significant."