Companies Embrace the Mac–Slowly

New hires at Google — and there are legions at a company that adds an average of 84 new people a week — get many perks. Among them: coin-free washing machines, free shuttles to nearby locales, and even on-site dental care. A recent addition to the list, depending on the job: the option to use a Macintosh, rather than a machine running Microsoft (MSFT) Windows. A Google (GOOG) spokeswoman says Windows computers far outnumber Macs, though Macs are less rare than they used to be at Google’s Mountain View [Calif.] headquarters.

Apple Computer (AAPL) machines are showing up at a lot of companies these days. Macs have been used at Genentech (DNA). The Washington bureau of Time Warner’s (TWX) CNN is a Mac shop, where interviews are sometimes conducted via iChat and programming is edited on Macs. Even IBM (IBM), the company once considered an ideological enemy by Apple founder and CEO Steve Jobs, houses a cadre of Mac users. “We use what we sell,” says Ken Bisconti, vice-president at IBM’s Lotus division, which last year released a new version of Lotus Notes, the corporate messaging and collaboration software, for the Mac.

Technology managers in large businesses historically have shied away from Apple computers in favor of PCs running Windows, arguing that Macs don’t run the software corporations use most. Many IT professionals have tended to believe that Macs are great for folks in graphic arts and advertising — but not the rest of the company.

Strong Sales Growth But the corporate tide is slowly starting to turn in Apple’s favor. “The numbers are clearly going in the right direction,” says Tom Cahill, who runs the Mac sales business for CDW (CDWC), a vendor of IT products and services that generated $6.2 billion in sales in 2005. The company doesn’t break out revenue on Apple products, but Cahill says Apple sales are headed noticeably northward among corporate clients. “The IT managers we deal with are saying they’ll consider a Mac, and that’s new,” Cahill says. “Even a year ago that wasn’t true. That leads me to believe that 2007 will be a telltale year for Mac sales.”

Last year wasn’t too bad either. Apple’s share of the U.S. PC market jumped to 5.8% in the quarter that ended in September, when it sold 935,000 Macs, according to research firm Interactive Data (IDC). That’s 30% higher than the same period in 2005, when Apple sold 737,000 Macs, and compares with a global growth rate of 7.9%. The share performance placed Apple only slightly behind Gateway (GTW) in the U.S. — though it’s still well behind Dell (DELL) and Hewlett-Packard (HPQ).

Lotus Notes, Bisconti says, is second only to Microsoft Office as the most widely used software in big corporations. The software is used by 127 million people at 62,000 sites globally. And at 80% of those sites, a portion of Lotus users are running the Mac version, he says. “It tracks pretty closely to the Mac’s overall PC market share, at about 4% to 5%,” he says. “But that’s still a lot of Macs.”

IPod Halo Effect Part of the newfound Mac love in the workplace can be chalked up to the iPod “halo effect.” The increasingly popular digital music player has acted like an evangelist for all things Apple by raising the company’s cultural profile and visibility among corporate executives. Professionals who give iPods as a gift may also purchase a Mac for their family members, themselves — even their businesses.

On top of that is Apple’s decision to begin using chips from Intel (INTC), rather than IBM and Freescale Semiconductor, and the company’s introduction of Boot Camp, which makes it easier to boot into Windows from a Mac. The moves are giving the Mac more cachet in corporate environments than ever before.

The appeal is likely to widen with the onset of a technique known as virtualization. Put simply, virtualization harnesses the computing horsepower of a microprocessor chip to turn one computer into two or more. A computer running Windows with virtualization software installed can simultaneously boot to Linux, an older version of Windows, or any other operating environment needed.

Run Everything on a Mac One popular virtualization software package is Parallels, made by the company of the same name. Parallels is turning out to be a hugely popular method for Mac users to run Windows, as well as other systems. “We’re seeing a lot of interest from big companies doing trials of Macs on their environments,” says Parallels Marketing Manager Ben Rudolph. Many “use Microsoft Outlook and they want to keep that, but move other things over to the Mac. A lot of our customers are rolling out a few hundred Macs a time, and they expand from there.” Parallels has shown up in Apple’s retail stores as well as at the likes of Best Buy (BBY).

And where Parallels brings a virtual Windows desktop to a Mac, VMWare, a division of EMC (EMC) is developing software that will enable industrial-strength applications — such as those sold by Check Point Software Technologies (CHKP), Oracle (ORCL), and BEA Systems (BEAS) — on Apple computers. “The classic case we’re hearing about is from companies who want to move to the Mac, but need to run Outlook and some proprietary business applications that are only available for Windows or which are custom-built,” says Srinivas Krishnamurti, VMWare’s director of virtual appliances.

However compelling the reasons to warm to the Mac, there’s still not a groundswell of switching among corporate customers, says analyst Charles Wolf of Needham & Co. “Corporate sales just aren’t a big part of Apple’s DNA. Clearly something is happening with shifts to Windows among consumers, but Apple’s fighting this old mind-set against it among the IT managers.”

Ads Rebuff “Suits” Apple has even reinforced that perception, most recently with ads showing a PC personified by a dorky guy in a suit and a Mac represented by a guy in street clothes. The much-remembered “Think Different” campaign from the 1990s touted Apple’s connection to artsy types, invoking images and faces of creative people, many of them long dead. Pablo Picasso never used a computer, but with one poignant ad, the Mac became the computer he would have used. Later, after adopting Intel microprocessors, Apple portrayed the chip as having been trapped inside Windows PCs relegated to “dull little tasks.”

However dull the assignments, the number of them being performed on Macs in the workplace is growing — however slowly. “I haven’t seen anything dramatic,” says Don Peterson, head of business sales for TekServe, a Mac retailer and service center. “I’ve seen medium-size businesses swap out some Windows desktops and run Boot Camp or Parallels, so while it’s unseating a few Windows machines, this isn’t a case of OS X really unseating Microsoft or Linux. But we’re seeing a lot of cases where the customer is stuck with one or two Windows applications and they’re jumping over to the Mac now.” The reason, he goes on to explain: “Because they can.”