How is a company that makes OS X, iOS, iCloud services not a software company? Sure it sells hardware, but not hardware that's a brick.. People buy the hardware so they can use the software which pretty much means they sell a package that includes both hardware and software..
Ben means that the end goal of OS X, iOS, and iCloud are to sell more hardware, not to be individually thriving SKUs (as evidenced by the declining price of any non-hardware offering by Apple over the past decade). Every (or, at least almost every) decision made at Apple is made with the goal of improving the experience of owning Apple hardware, which is their main profit center.
This is a useful way to understand Apple, but not companies in general. Movie theaters make the majority of their profit off of concessions, but they are not popcorn companies.
They now give away all their software (despite upcharging for more iCloud space). On the Macs, Apple has embraced that people want to run Windows and supported Boot Camp for generations of hardware now. The entire retail outlet is dedicated to selling the hardware and accessories for said hardware, with a single vertical column (maybe that much) left over for software. They provide an App Store on both platforms, but produce a minority of what they sell there. Apple is a hardware company.
For what it's worth, I get your point, though. My preference is to use OSX over Windows these days, but that's because I find it to be the best intersection of *nix boxes (which all of my servers run) and a pleasant UI with great apps (because I'm still a human, and sometimes I tire of the command line). But look at the way iCloud took forever to become stable - if it's even there now - or the recent decreased in perceived QA (iOS 8.0.1, Apple Maps), and you can tell Apple's focus isn't on software as much as hardware.
You're right, but I would phrase it a bit differently:
I believe Apple is a product company. They make things that people want to buy and use. Their products are built from a combination of hardware and software/services.
Microsoft is also a product company. The difference is that they make a lot of different types of products. Some are things people buy and use like Xbox, Surface, and Lumia. Some are "platforms" like Windows and SQL Server. And they still sell "software" like Office.
NextStep was built with enterprise in mind but became wholly consumer in its next life as OS X and then iOS. The massive consumer success of the iPhone led to employers giving in to employees who wanted iOS devices instead of Blackberry devices, a phenomenon called BYOD, "bring your own device". BYOD has given rise to an entirely new Apple presence in enterprise which I think Apple is just getting started with. Prior to this Macs were used by designers and engineers, creators, but hardly the stuff of serious enterprise.
Right now the services Apple provides are all about fulfilling features that consumers want: email, cloud storage, being able to buy content, and apps. They're meant to augment and also perhaps cynically lock consumers into Apple's sphere. The hardware devices sold at high margins make the money. This may change, and we might also see a two Apples where apple starts selling its services with higher margins for enterprise.
Incidentally long ago Apple really dominated in education. Most of the 80's Apple IIes and macs were popular in K-12, but that went away in the later 90's. Now iOS, in the form of iPads, are making inroads in education once again, competing with Chromebooks. Education isn't enterprise, and I don't see any services Apple would offer schools, but it's related.
Almost every where you look though, Microsoft is under assault. I think the last remaining stronghold is the Windows PC workstation. I don't think Apple, Linux or Android have made any inroads here. I can see Chromebooks becoming more relevant in the future, but for now workstations are dominated by Windows and probably will be for the next decade. The enterprise level services Microsoft provides here with ActiveDirectory and sharepoint, and the sophisticated controls for deploying Windows workstations across big organizations is pretty unrivaled. Maybe RedHat is also in this space, but not at the level of Microsoft.
Just a nit pick, BYOD is when a employee brings his/her own device to work in order to use it to do work. At some places it's viable to let employees choose the tools that work best for them, and not force every employee onto the same 6 pound HP or Lenovo or Blackberry.
New and improved provision schemes will make this even more viable in the future, where applications and data that belongs to the employer can still be kept reasonably secure no matter who owns the hardware.
It's an interesting area. I don't think BYOD has the rosy future the breathless posts on LinkedIn will have me believe. The problem is one of security. If I'm going to enforce security on a device I will need to wipe/reset the BYOD phone and apply my enterprise policy (password on start, device encryption, find-my-phone, remote wipe and so on).
At the other end of that equation you have a consumer who has a shiny new phone, and is being asked by her employer to yield control of the new shiny to the enterprise. Not appealing, when said consumer foots the bill for the phone, data and calls.
That conflict will result in CYOD (choose your own device), I think. And if we get a company phone, will mean we walk around with two phones. One fore work, locked down and able to access corporate email and SharePoint, the other for play, which has no corporate policy applied to it and only has Internet access.
> If I'm going to enforce security on a device I will need to wipe/reset the BYOD phone and apply my enterprise policy
Which is exactly what happens in a BYOD scenario and the process is getting better for both employees and employer. For example, my employer can now "wipe" all my corporate data on my iPhone while leaving all my personal data intact. Of course, as long as I have their data the security policy (password on start, device encryption, etc) is enabled.
We do have CYOD but we only facilitate the connection between the employee and the provider -- the employee owns the device. Mobile devices are very personal things and nobody wants to carry two of them.
Outside this box, I think this critique takes on an even stranger tone:
* Tesla - sells devices (cars) and services (auto repair, charging stations, consulting, etc)
* Equal Exchange - sells devices (Cocoa, Coffee and Coffee gear, etc) and services (reports on working conditions and other quality control data)
* A private university - sells devices (classrooms, living space, all sorts of retail items) and services (classes, research, community outreach, much more)
(getting more abstract)
* A trial lawyer - provides devices (a body to stand in place of a defendant, relevant evidentiary media materials) and services (research, strategy, etc)
* A restaurant - provides devices (table, food, decor, ambiance) and services (cooking, consulting, food sourcing)
OP may say that the intended target of this critique is the "tech" sector (ie, "a horizontal business should be great on every platform, while a vertical business should be differentiated"), but it looks like that becomes a capricious distinction the closer you look.
A university needs to provide compelling courses on research from all sources, including other institutions of higher education, while still being differentiated in its "vertical" market.
A restaurant needs to source food that will excite its clientele (again, even sometimes from various types of horizontal competitors) while still being vertically differentiated.
And so on.
Providing both horizontal and vertical components (whether organized into separate subsidiaries, subcontractors, divisions, or whether blended entirely) is a very old concept and is the natural course of maturity for a successful model.
The distinction in the article is not devices vs. services but vertical vs. horizontal. Tesla sells services, but those services are either vertically integrated with their cars (e.g. they don't repair non-Tesla vehicles) or have strategic value for their primary business (e.g. making superchargers compatible with non-Teslas expands the supply of EV charging stations generally, which is good for Tesla owners).
Yeah, I thought that when I wrote it. The same is somewhat true of Equal Exchange (ie, presumably their advocacy is intended to drive market expansion).
Same situation. Those are all examples of vertically integrated businesses (or alternatively, different components of a single output).
A university sells education. Classrooms, dorms, teachers, etc. are all part of the same 'supply chain' for education.
A trial lawyers sells legal services. Research, evidence, appearing in court, and so forth are just incident to the basic legal service provided.
A restaurant sells a 'dining experience'. The food, wait service, and so forth are all part of that same experience.
What OP means by a company that has both horizontal and vertical businesses is a company offering something as a standalone revenue-generating output (the "horizontal" business) and something else that incorporates that standalone output as part of another output (the "vertical" business).
This would apply, for instance, to a fast food company that not only sold hamburgers via its chain of fast food restaurants (vertical) but also supplied those same hamburgers to other, possibly competing competing fast food restaurants as a separate business (horizontal).
Well, that seems more like a belief as a prelude, and the piece is about how the rift in MS is not services/devices but consumer/enterprise. There's really no question that Apple puts consumer devices ahead of enterprise or services (their services just add value to the devices).
They make their money off the hardware though. And plenty of people use Apple hardware without using Apple services. I have an iPhone/iPad/Mac, and don't use Apple services for email/document/storage/photo backup etc. I appreciate their OS software and hardware, but for the most part think there are better options for pretty much all of their services.
Does not matter. When you buy an Apple product, you are basically supporting their services as well. And as far as I know, you are more or less forced to have an iTune account if you have an Apple device, right ? So you are tied in to their services at least for the distribution of applications (on mobiles).
You can't say "where they make their money" doesn't matter. Of course it does.
An iTunes account is required for App Store purchases, but that's about it. You can load on Google e-mail, maps and browser after that, if you wish. The point is that Apple doesn't make money from its services, so it has less of an incentive to stop you.
ITunes is a distribution service. They make money off it. It's like saying "Valve is just doing games" where most of their money comes from selling the contents of others. When you have a monopoly on distribution on a specific platform, that's a service where people are locked into using. I don't know how to explain it in any other way to you.
No-one is arguing that they make money from it. Nor is anyone arguing that Apple doesn't do services. They are arguing that they make far more money on hardware sales than services, and thus are primarily a hardware company.
Except they're tied. The way you get Apple services is buying Apple hardware. You can't buy most Apple services separately from Apple hardware, and you don't get charged for many Apple services aside from the purchase price of the hardware.
The debate over whether Apple makes money off hardware or software is ridiculous. Every iPhone contains both Apple hardware and software, and works in concert with Apple services, designed to be a cohesive whole. It's ONE experience, designed top to bottom to work together. That's Apple's entire value proposition.
I find it curious that Microsoft is the target of this criticism, and I am further curious what the author thinks about Apple.