Apple's OS Edge Is a Threat to Microsoft

BusinessWeek ^ | 04/11/2008 | by Gary Morgenthaler

[Swordmaker]

A recent upgrade to the Mac operating system moves Apple closer to challenging Microsoft for overall computing dominance, even in the corporate market

The 20-year death grip that Microsoft has held on the core of computing is finally weakening—pried loose with just two fingers. With one finger you press "Control" and with the other you press "right arrow." Instantly you switch from a Macintosh operating system (OS) to a Microsoft Windows OS. Then, with another two-finger press, you switch back again. So as you edit family pictures, you might use Mac's iPhoto. And when you want to access your corporate e-mail, you can switch back instantly to Microsoft Exchange.

This easy toggling on an Apple computer, enabled by a feature called Spaces, was but an interesting side note to last fall's upgrade of the Mac OS. But coupled with other recent developments, the stars are aligning in a very intriguing pattern. Apple's (AAPL) recent release of a tool kit for programmers to write applications for the iPhone will be followed by the June launch of iPhone 2.0, a software upgrade geared toward business users.

Taken together, these seemingly unrelated moves are taking the outline of a full-fledged strategy. Windows users, in the very near future, will be free to switch to Apple computers and mobile devices, drawn by a widening array of Mac software, without suffering the pain of giving up critical Windows-based applications right away. The easy virtualization of two radically different operating systems on a single desktop paves a classic migration path. Business users will be tempted. Apple is positioning itself to challenge Microsoft for overall computing dominance—even in the corporate realm.

[discostu]

I think it does bother you, look at the size of this post, all trying to defend the idea that MS got their clock cleaned.

You don’t like the numbers take it up with CNet, they’re the ones that said there were 8 million Mac Office users.

I’m not spreading any FUD at all, not anything that even closely resembles FUD. Quote my FUD, go ahead, I dare you. There is not ONE SINGLE DROP of FUD in ANY of my posts.

I never said there was a bail out. Apple WAS having issues at the time, that’s documented, the deal probably helped them, that’s obvious but I NEVER said bail out, that’s YOUR words, your FUD.

As for what Apple gave, remember preferred stock gets dividends before common, it wasn’t just some $5 print job stock has meaning. If they were profitable during the time MS owned that stock MS got some of that money.

I think both sides won. The repair of the strained Apple MS relationship was good for both companies. It helped bolster Mac’s image as a viable platform (something that was in question at the time) and helped solidify their foundation for the modern push, and it made MS a boat load of money and it’s one of the few times MS made a boat load of money without any raping or pillaging. MS very well might have lost had the case would it’s way through court, but that’s immaterial because it was settled amicably to the benefit of both companies outside the courts. Nobody got taken to the cleaners, and only a FUD spreader would say otherwise. Stop the FUD.

[tacticalogic]

I understand. Now, if I have applications that have to run on Windows systems, and I go the route of doing it in virtualized Widows clients running under the Mac, will OS X manage those Windows machines? If not, what just happened to my TCO?

[antiRepublicrat]

if I have applications that have to run on Windows systems, and I go the route of doing it in virtualized Widows clients running under the Mac, will OS X manage those Windows machines? If not, what just happened to my TCO?

It would be part of your calculations. If all you have is that one Windows-only server app (or multiple apps that can go on the same server) among 20 servers you're going to come out ahead. As legacy servers get to be a large percentage of the total, with specialty apps that have no equivalent on the new platform, you have to think about not migrating.

It's all case-by-case, but if you want to stand up two networks for say 500 users, standing up an all-Mac system will cost you a lot less than an all-Windows system. The hardware may in cases be more expensive and you may need training for people used to Windows*, but saving on licensing and a few $40-$80K per year employees will save you a lot more than that.

* When Largo, Florida switched to Linux the training turned out to be easier than they thought it would be. Most questions were like "How do I change my wallpaper?"

[antiRepublicrat]

You don’t like the numbers take it up with CNet, they’re the ones that said there were 8 million Mac Office users.

You seem to see this from an straight economic point of view when it's not. At the time Microsoft was in the middle of its worst monopolistic practices, doing everything it could to eliminate competition by any means necessary.

Losing Office, by far the best office suite for the Mac, would have been a serious blow to Apple. So Apple used its winning position in the suit to force Microsoft to continue to support Office for the Mac. Otherwise, Microsoft could have easily absorbed those millions in lost potential sales (while saving on the dev staff) in order to hurt Apple. Apple risked Microsoft doing that just to hurt the competition in the first place, and IMHO Microsoft would have dropped Office for the Mac out of revenge if Apple had pushed the case to trial and won

While Apple had a strong legal case and thus won the settlement, it was still vulnerable to the machinations of Microsoft. Thus Apple settled for a relative pittance and allowed a lot of face-saving for Microsoft in order to secure Office and essentially unspoken protection. This face-saving is what makes it not look like an Apple win.

[tacticalogic]

If all you have is that one Windows-only server app (or multiple apps that can go on the same server) among 20 servers you're going to come out ahead.

What I have is client/server apps that want Windows on both ends. Does OS X have a built-in equivalent to group policy that will centrally manage the hardware settings of the computers, and the software settings of the users, or centrally manage the IPSEC policies of all the machines on the network?

[discostu]

I wouldn’t go that far. As has been pointed out by others on the thread MS didn’t threaten to pull Office until after Apple dragged them into the suit, and given the time between the agreement and the shipping of Mac Office 98 it’s clear it was already in development before the settlement happened. I agree pulling Office would have seriously injured Apple, heck I’ve even said it in this thread. But you can’t really say that Apple used it’s winning position in the suit to keep Office since the threat to pull Office didn’t happen until after Apple brought MS into the suit

The real gain Apple got on that front wasn’t the continued development of Mac Office, it was the public statement (with legal enforcement) that Mac Office would continue to exist for a few years, enough for probably two versions (as it is I think 3 came out during the agreement window).

I don’t think there was an face saving, I don’t think anyone needed any face saving. This deal basically ended the feud that had existed since the GUI suit and did so in a way that made everybody money, nobody was losing face so nobody needed to save it. It looks like an Apple win to me, their market share stopped eroding (not just because of this deal but it helped) and put them in a position for the building of this decade. And MS made a bunch of money so clearly they won too. I’m not much of a follower of The Church of The Donald (Trump) but in his first book he does have one brilliant observation: deals only happen when both sides think it’s a win for them. The past decade demonstrates that indeed this deal was a win for both sides.

[antiRepublicrat]

What I have is client/server apps that want Windows on both ends.

Welcome to vendor lock-in.

Does OS X have a built-in equivalent to group policy that will centrally manage the hardware settings of the computers, and the software settings of the users, or centrally manage the IPSEC policies of all the machines on the network?

Yes, down to the devices and software they can use, and it'll even work if the user has a disconnected laptop. Remember, this is UNIX. It even automates creation of custom images for your clients and will install them over the network (with a filter to make sure images go to the right hardware). It will net boot all your clients, for example if you're running a classroom and don't want anybody touching the local OS. It runs software update server with local cache just like Windows.

[tacticalogic]

Welcome to vendor lock-in.

MS didn't do it (unless they managed to bribe all the developers). That's the only platform that software that met the specs we needed was available on. And I'm still waiting on the open source Exchange Killer app.

[antiRepublicrat]

But you can’t really say that Apple used it’s winning position in the suit to keep Office since the threat to pull Office didn’t happen until after Apple brought MS into the suit

Apple saw Microsoft doing wrong and enforced its legal rights. Apple settled allowing Microsoft to save face under the threat of losing Office. It would have been a pyrrhic victory to win the suit and then lose more than the judgment because of the loss of Office.

deals only happen when both sides think it’s a win for them

Or when one side has the other over a barrel. Apple had the upper hand in the suit, but Microsoft had the trump card in the larger picture.

[antiRepublicrat]

That's the only platform that software that met the specs we needed was available on

It's possible, but I've also seen a lot of specs written to get one specific application, not to the actual needs.

And I'm still waiting on the open source Exchange Killer app.

OS X Server does have enterprise-capable mail and calendaring functions integrated with the directory, and they're based on open standards so, unlike with Exchange, you're not locked-in. It's included for unlimited clients, as opposed to Microsoft, which charges tens of thousands of dollars to get unlimited clients from Exchange -- per server, of course.

[tacticalogic]

It’s starting to sound like it’s cheaper as long as you can convert virtually everything to Mac/*nix. If you have to keep enough Windows OS’s to need centralized management then you have to buy it for both. If that’s the case, what’s the big advantage to being able to run Windows on the Mac if it’s only cheaper if you don’t run Windows at all?

[discostu]

MS was losing plenty of suits around that time, only tech watchers really seemed to care, even MS didn’t seem to care much. I don’t think getting nailed for stealing some code was a loss of face issue for MS. Keep in mind too it had been a while since MS had updated Mac Office, they basically skipped porting 95 to Mac, and given their relationship it’s actually note worthy that they were even working on new Mac version at all.

I don’t really think anybody was over the barrel. MS could afford to lose another suit, while Apple would have been uncomfortable having no major productivity software for the Mac the would have survived. I think getting into the suit was the culmination of years of bad blood and somewhere during negotiations it dawned on them that bad blood makes for bad decisions, so they came to an agreement, added a “punishment” that did nothing (forcing MS to buy dividend paying stock which they then sold at a profit, very Br’er Rabbit as punishments go), and really up until the recent Mac ads have been pretty friendly to each other.

[tacticalogic]

OS X Server does have enterprise-capable mail and calendaring functions integrated with the directory, and they're based on open standards so, unlike with Exchange, you're not locked-in. It's included for unlimited clients, as opposed to Microsoft, which charges tens of thousands of dollars to get unlimited clients from Exchange -- per server, of course.

What do they call this application? I'm guessing they're not keeping the users's mailbox in an LDAP directory.

[antiRepublicrat]

What do they call this application?

iCal Server and Mail Services. There's also Wiki Server (collaboration) and iChat Server (a presenter's wet dream in addition to managing IMs and chats). All included, no client licenses.

[tacticalogic]

Migration from Exchange to iCal looks to be a “tear-it-out-and-start-all-over” arrangement. It also looks like iCal suffers from the same problems with large scale free/busy searches that Exchange did until the current release - forcing the client to publish the free/busy information, and making the searching of calendars a client-side operation. I just got out from under that arrangement and I’m in no hurry to go back.

[itsahoot]

So, when can I install Mac/OS onto my PC?

Probably right after M$ Lets you install Windows on a Mac after you by one of the versions at Retail. Oh wait you can do that now.....never mind.

[HAL9000]

Does OS X have a built-in equivalent to group policy that will centrally manage the hardware settings of the computers, and the software settings of the users, or centrally manage the IPSEC policies of all the machines on the network?

Apple sells an application called Apple Remote Desktop 3 for centralized management. It should be capable of performing the tasks you described.

In the Mac OS X Unix terminal, I see man page documentation for ipsec, setkey and racoon, the same software used to manage IPSec in BSD and the Linux 2.6 kernel. ARD supports remote UNIX script execution, so that can probably be used to manage basic IPSec configurations across a network.

Mac OS X also has a built-in L2TP/IPSec client, and it's possible ARD can manage it with a high-level interface like Automator.app, but I haven't tried it for that purpose. Its configuration options are more limited. The configuration panel looks like this -

Apple's Xserve server hardware, running Mac OS X Server operating system, has a complete set of tools for local and remote administration, and lights-out management hardware.

[Swordmaker]

...forcing MS to buy dividend paying stock which they then sold at a profit, very Br’er Rabbit as punishments go...

You really haven't got a clue about it. Apple has not issued a dividend since December 1995.

MS was losing plenty of suits around that time, only tech watchers really seemed to care, even MS didn’t seem to care much. . . I think getting into the suit was the culmination of years of bad blood

Dancing, more dancing. More unsupported opinion from Discostu. Microsoft being sued was the direct result of their stealing code from Apple. . . a continuation of a practice that Microsoft was famous for. Usually MS just bought the suing company and absorbed them,

[Swordmaker]

I never said there was a bail out.

"It depends on what the meaning of the word 'is' is" - Bill Clinton.

However, these are YOUR words:

. . . And with good reason, Apple looked pretty seriously hosed for a while there, heck they even needed money from MS.

. . . they rode in for the rescue . . . And there was no rumor spending after the fact it was KNOWN at the time that Apple was losing money hand over fist, their stock was in the toilet, their market share was down, and then in came MS with an infusion of cash but most importantly an agreement to keep making product for Mac.

If it quacks, waddles, swims, and has feathers... a mallard is still a duck, regardless of the word you use.

Other things you have said that were disproved on this thread by refutal from authoritative sources:

Nobody gives up preferred stock for money during the course of a suit. That’s stupid. If you have to give up money because of a suit the other side isn’t going to give you stock for it, and if you have to give up stock in a suit the other side isn’t going to pay for it.

Of course the MS-Apple suit had been over for 4 years at the time, so no the buy was not related to any suit.

and I loved this one, that you tossed off after several of us pointed out that Apple had almost $1.5 billion in cash and liquid assets on hand at the time Microsoft came in with an "infusion of cash:"

. . . while they were losing money they’d developed a serious war chest. . .

Tell me, Discostu, how did Apple do that? They must have been selling something to accumulate $1.2 billion in cash. That's the equivalent of $1.6 billion in 2008 dollars.

While you didn't use the exact words "bail out," your meaning is clear. You want people to believe that Microsoft, charging in like a knight on a white horse, "bailed out" Apple with an infusion of cash from a financial crisis that could have killed the company. I have merely provided the sources that proved this to be a wrong interpretation of what happened. The historical record, the facts, simply don't back you up. You want Microsoft to be squeaky clean and an ethical company... it really wasn't either of those things. That is the real "reality distortion field" that is FUD.

. . . it’s one of the few times MS made a boat load of money without any raping or pillaging.

Yeah, right. Microsoft lucked out. But at the time of the settlement, when NONE of those future profits had been earned, it was Microsoft who paid, not Apple. "History is prologue." It was NOT a brilliant informed choice investment made by Bill Gates to make money... it was an admission that they had screwed up and had to pay. It was Apple who agreed to the settlement, when they did not HAVE to, to give Microsoft an air of plausible deniability which MS quickly turned its spin machine loose with.

You are beginning to remind me of a Liberal who, despite mountains of contrary evidence, still believes that Bush lied in those 16 words in the 2003 State of the Union Address. It seems to be a matter of faith with you. I've been posting facts. You've been making it up as you go or quoting people who were making it up as they went.

[Swordmaker]

Or when one side has the other over a barrel. Apple had the upper hand in the suit, but Microsoft had the trump card in the larger picture.

That's why it went to a negotiated settlement where such issues could be addressed. In a court suit, the jury could have only awarded past and future royalties and treble damages for the willful nature of the act... but there is no give and take reflecting other issues that were as important or more so.

In any case, the purchase of the $150,000,000 dollars of preferred stock that was restricted (MS could not convert, sell the stock, or even borrow money against it without Apple's explicit permission) could be better looked at as a surety bond... money that Apple could have kept locked up for years had Microsoft reneged on any of the agreements. It was not a "Cash infusion" to bail out a competitor. It was a hostage.