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Monthly Archives: October 2008
Apple Market Share: The Sound of Breaking Windows
In the conversation I had last week with Kyle Arteaga, VP, Corporate Communications for Serena, he mentioned that Serena had given their employees the choice of whether to have a PC or a Mac, for a laptop or desktop. He said that roughly 60% chose to have a Mac. Such straws in the wind speak volumes.
Nowadays, whenever I run into software engineers or engineers of any kind, I ask them what computer they personally use. The answer is “The Mac” most of the time, and they often manage to persuade their employers to give them a Mac at work.
Why is that significant, given that most of the developers I run into are developing server software?
It’s significant because such people are opinion leaders. Most such individuals end up being technical support for those who have less affinity for silicon and now that so many of them have moved over to the Mac, they are dragging their dependents with them. (Which is exactly what I did when I moved to the Mac, turning my wife, my sister, my niece and two of my sons into Mac users.)
In commercial competition the marketing battle is often won long before the statisticians wander around the battlefield counting the dead and dying. This has happened with Apple. The point at which Microsoft might have been able to stop Apple was just before Apple moved to the Intel processor. At that time it would have been hard to diagnose Apple as a rising threat. The theory that it would stay confined to a “fan boy” niche seemed entirely tenable. But there were already straws in the wind. Apple had delivered iTunes to the PC and it had become the most popular PC app for many a year. Apple was already operating the only music store on the web that made business sense and actually attracted users. Apple stores started to sprout up in malls right across America. Apple was on a roll.
Once Apple moved to Intel and virtualization software appeared from Parallels, and then later VMware, it was pretty much game over, even though the market stats were still insisting that Apple was a niche vendor.
Market Share – October 2008
According to Apple’s COO, Tim Cook, about one third of the money spent on computers through US retail (31.3% if you want to be precise) is for Macs. In terms of units that “only” amounts to 17.5% because when people buy Macs they buy higher end models and spend more. About 400,000 people per day pass through Apple stores and it is still the case that 50% of Mac buyers are Windows refugees. Mac stores are so successful that Apple only has to open one in a new geographical area to alter the balance of Mac buyers among consumers.
The evidence seems to be that this is not a just US phenomenon, it happens all over the world, wherever Apple opens up a new store. Apple is thus able to expand its retail sales simply by opening up new stores – or by partnering with major electronics retailers around the world.
I reported last month that Apple is now, through no fault of its own, making inroads into the business market. A recent Yankee Group survey of 250 US companies found that 87% now have some Apple computers, up from 48% two years ago and the company estimates that Apple’s corporate market share has risen to 8-10% with 21% of firms reporting more than 50 Mac users. This figure is more than backed-up by AMI Partners, who report Apple’s desktop market share in the medium business segment (100-999 employees) to have grown to 27% from 13% in a year, with laptops growing to 18%. In small enterprises (1-99 employees), AMI Partners put Apple’s desktop and laptop market share as 12% and 8%, respectively.
For the quarter ending in September, Apple reported $7.9 billion in revenues and $1.14 billion in net profit. Ostensibly, that is under half of Microsoft’s revenues, which are above $16 billion per quarter, but the Apple numbers exclude most of its iPhone business, which is hardly visible because of GAAP rules subscription accounting. If you remove the impact of that, then Apple’s quarterly revenues were $11.68 billion in revenue and $2.44 billion in net profits. And btw, it’s sitting on a cash pile of $24.5 billion.
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Posted in Apple
Tagged Apple, consumer electronics, Google, Mac, Market Share, Microsoft, Tim Cook;, virtualization, VMware
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The March of the Fuzzy Emails
Do you get “fuzzy emails”? – and by fuzzy emails, I mean emails to which you don’t really want to do anything about, but which make you think that maybe you should and which you are loathe to delete. I get far too many such emails. It has to do with the fact that I’m a blogger and a technology analyst. Some emails contain news that is just important enough to grab my attention, but not so important as to absolutely demand that I write something. I tend to leave such fuzzy emails cluttering up my inbox for a month until I realize I have to “fish or cut bait.”
Btw, I have no idea what cutting bait actually involves, so I guess I’ll have to fish. So here we go:
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There’s a press release from MEGA proudly proclaiming that Gartner has positioned it in “the leaders quadrant” in “Magic Quadrant for Business Process Analysis Tools.” While I’m deeply unimpressed by this news, MEGA is jubilant, quoting Gartner as follows; ““Expanding the demand for BPA tools should result in at least a 10% compound annual growth rate in market revenue through 2010.” I’m betting that Gartner wrote that before the stock market started riding the down elevator at break-neck speed. BPA – in case you didn’t know is about governance more than anything and good tools in this area help IT Departments plan the growth of their infrastructure. I don’t doubt that such software (and associated services) will continue to sell but right now, 10% growth is such stuff as dreams are made on.
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I run across a press release from CA announcing that “CA IDMS R17 lowers overall mainframe costs via ZIIP Exploitation.” This is not earth-shattering news, of course. The days when IDMS was one of the world’s dominant databases are long gone, but old databases never die and the revenues they generate never dry up. I seem to remember someone telling me that IDMS generates $100m per year in revenue and that’s quite a big number. When John Swainson took over as CEO of CA, he decided to keep such “sunset” products ticking over in a sensible way, by reinvesting a portion of their revenue back into their continued development. This press release tells me that CA is keeping its word on this – while also telling me that IDMS can now exploit the ZIIP engine. If you don’t know what that is, it’s because you don’t need to. It’s a mainframe thing.
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Managed Objects has finally been acquired. I remember briefing with them recently and being deeply impressed by their use of social networking interfaces on their Business Service Management products which surround their CMDB. Managed Objects was a company that had grown quite large, but not large enough to compete with the 4 System Management Juggernauts (IBM/Tivoli, HP/Open View, CA and BMC) and there was no indication that it would ever get big enough and ugly enough to do so. So Novell has snapped it up, along with its much vaunted CMDB, in its attempt to join the jolly Juggernauts. Whether Novell can do that is another question that I’ll leave for another day.
Posted in A Day In The Life
Tagged CA;, Cisco, Gartner, IBM, John Swainson;, Karl Marx;, Microsoft, Motorola;, Northrop Grumman;, Novell;, Open View;, semantic technology;, SOA, social networking, USD;, Vendor, Web applications;
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The Failure of Electronic Voting
[SinglePic not found] The adjacent photo, from Andrew Sullivan’s Daily Dish at The Atlantic, gives a pretty good idea of who’s going to win the election – barring any last minute upsets. It has to be said that if even a small portion of “the rednecks” are for Obama, then it’s game, set and match.
However there are a number of paranoid, or as they will claim “justifiably paranoid”, Obama supporters who believe there will be an all-out attempt to steal the election by the Republicans, by means of fixed electronic voting machines.
A Collapse of Confidence
Irrespective of the truth (and who knows what that is?), confidence in electronic voting machines has collapsed. The states of Maryland and Virginia both intend to scrap their electronic voting systems after the November 4th election in favor of paper. I have little doubt that other states will follow suit.
Aside from the unreliability of the machines, there’s the awkward problem that electronic voting machines naturally create a bottleneck. If you only have 10 machines and voters take an average of 3 minutes to vote, you can only process 200 votes per hour. With paper voting you aren’t limited to just 10 people voting at the same time. The very nature of electronic voting can have the effect of disenfranchising some voters simply because voting machines break down or too few were installed in the first place.
Incidentally, Maryland paid $65 million for its electronic voting system which it will inevitably have to write off. It all looks bizarre to me – especially those videos of voting machines actually “flipping votes”. There have been reports of this from Texas, Tennessee, West Virginia and elsewhere, and in every case I’ve read about, the voting machines flip votes to the Republicans.
Nobody seems to ask the obvious question: Why is a machine vote-flipping at all?
Vote Flipping Is Truly Abnormal
Think of all the computer systems you’ve ever used, including those that didn’t work properly at times, and ask yourself when did you ever see software take a specific value and put it in the wrong place or flip data from one value to another value. I mean when you ask for $200 at the ATM, how often does it give you a different amount of money. It doesn’t happen, right?
Well actually it does, under one specific circumstance, which is with touch screen machines. The area you touch has to be calibrated to match the screen display exactly so that when you touch the screen it records the value under it as your selection. How hard is it to get that right? Well if you have owned a Palm Pilot or any other touch screen device up to and including the ubiquitous iPhone, you may have noticed that manufacturers have no problem getting this mapping right – except of course with voting machines.
Just search the web with the search terms “vote flipping” and page through the 41,200 web pages that the search brings up, to get a sense of the frequency of this phenomenon. And then try to find one example where the vote flipped from Republican to Democrat. I may have missed it, but I can’t find one.
Now let’s contemplate the fact that some of the manufacturers of voting machines are manufacturers of ATMs and we have another strange phenomenon. ATMs, you may have noticed, are extremely resistant to every kind of hacking strategy. So search the web with the term “hacking” and “voting machines” (241,000 hits) and peruse the remarkable number of reports of the hacking or hackability of voting machines. So how is it that companies that pride themselves on building secure ATMs suddenly lose all their design skills when it comes to voting machines?
I believe I have some very good questions, but unfortunately I don’t have any answers to them.