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Answering the Snow Leopard-Windows 7 Question

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Yesterday, someone asked me if “Apple has got a realistic chance with Snow Leopard?” competing against Windows 7. He was particularly interested in Macintosh uptake in the enterprise. I gave him my answer, which I will blog here with additional analysis.

My answer to his question is “No.” Snow Leopard won’t convert many more businesses to the Mac, particularly with Windows 7 launching three to six weeks later and likely appearing on new PCs before Apple’s new operating system ships. Later this year, Microsoft and its partners will cover the planet in Windows 7 marketing, which will help further marginalize Mac sales. I’ll further explain my reasoning.

Vertical applications stack. Microsoft controls the desktop-to-server business productivity stack, mainly because of Office on the desktop. The Macintosh application stack still isn’t mature enough, but it’s better than Linux—and that is thanks to Microsoft. Businesses still want Office, which is available for Macintosh, too, but not Linux. Snow Leopard will offer fuller Exchange integration, removing another business barrier to adoption. But the applications stack is still immature for the mass of businesses.

However, there are some verticals for which Macintosh offers a better application stack than Windows. Snow Leopard’s media streaming capabilities are compelling—and they support Apple applications that content creators favor, such as Final Cut Studio. Apple’s vertical applications stack for content creation and media production beats the hell out of Windows’ stack. Office-Windows-Windows Server defines one kind of vertical stack. Final Cut-Snow Leopard-Snow Leopard Server defines another.

Apple’s consumer media content software is better than anything I’ve seen on Windows, too. For consumers or professionals with specific needs—Haha, like journalists—iLife is the application suite for content creation. The problem I see is cost of entry, given the weak economy. To realistically join the Mac Club, consumers must pony up $999. For many people, a Windows 7 PC will be good enough for the much lower price. An iLife-equivalent for Windows would help Seven.

Windows 7 system requirements. Windows 7 is the first Microsoft desktop OS that runs faster on older hardware. It’s a strange positional change. For years, Mac fans could rightly claim that older Macs ran faster when upgraded to a newer operating system. Now, Microsoft can make the same claim, which means many businesses will be able to deploy Windows 7 on existing hardware (and maybe marginally old gear). That’s a big, bad deal for Macintosh. The only time most businesses consider switching platforms is when making a new hardware upgrade, particularly when there is a hardware-software stack as there is with Apple. That’s where Snow Leopard can’t compete on price—not if the cost is an expensive new Mac to get the software. The weak economy makes a platform switch even less likely.

However, Macs do run Intel processors, and last week Apple cut Pro notebook prices. Many businesses are still replacing desktops with laptops. Mac laptops can run Windows. If IT has got to buy a new notebook anyway, a Snow Leopard MacBook Pro could certainly be considered. I do expect some trickle sales, particularly for any business users creating or producing content.

Pulling PowerPC’s plug. Businesses running older, non-Intel Macs can’t run Snow Leopard. They will need to buy new hardware, too. Snow Leopard only supports Intel-based Macs, which started shipping on iMacs and MacBook Pros in January 2006. There are plenty of PowerPC Macs still in use, particularly in key Apple verticals like education. Businesses swapping out Mac hardware are sure to look at Windows 7 alternatives. Given the weak economy, how much more Macs cost than Windows PCs and how good Windows 7 looks, smart Microsoft sales folk and channel partners should be able to convert some of those Mac desktops to Windows 7 PCs.

iPhone, not Snow Leopard. Mac OS X 10.6 doesn’t offer enough different for the price gulf between between new Macs and Windows 7, whether as upgrade or purchase with new PC. That is for the mass of businesses. As I stated some paragraphs back, there are key verticals which will choose Snow Leopard, as upgrade or on new Mac.

It’s iPhone more than Snow Leopard that’s going to cause Microsoft and its partners problems. There is an identifiable sales “halo effect” in the consumer market, where iPod sales led to more consumer Mac sales. I’m on record a year ago asserting that iPhone is likely to have some halo effect in the business market by pulling some Mac sales. Apple’s Exchange support, on iPhone and Snow Leopard, is key to making halo sales possible.

As for Snow Leopard, I’m not exactly crowing about an exciting release. Apple’s $29 Leopard upgrade pricing pretty much reflects how much more users will get. Maybe the “Snow” added to Leopard should be interpreted as nothing more than the equivalent of Windows XP Service 2, which dramatically improved the operating system’s security and performance. Difference: Microsoft didn’t charge for its service pack.

Perhaps in happy economic times, my analysis would be much more favorable for Apple. The Mac has claimed as much new business customer business as it’s going to get now—not without something else. That’s going to be iPhone 3G/3GS, or nothing.

20 Comments

  1. Actually, Service Pack 2 for Windows XP was not a performance based update. Windows XP was already a performance winner, what it did was enhanced the security initiative in the OS. I do agree though that Snow Leopard is a Mac OS 10.1 – 2009 edition. Apple realized that 10.5 was a very buggy release, I still cannot forget Tom Krazits post from CNET in October of 2007 about GA release that could delete data when moved between partitions. Apple has been patching the OS rapidly with some very enormous updates that have since hit the number 7 with a number 8 in the works.

    What I would like for folks to understand though is that Microsoft and Apple are in different leagues. Its just that Apple is giving this perception that they are. How can 35 million really compete against 1.2 billion? It just does not compute. Its 2009, its about value and getting the most out of your technology investments, Windows 7 delivers that and then some.

  2. Your argument only holds water if you think the Quarter Pounder is haute cuisine. It isn’t.

    Windows is the default choice from those who don’t think about what to buy.

    Microsoft flubbed it with Vista and there are no signs that Windows 7 will do better.

  3. Avro, Windows Vista’s issue was the innovation it introduced. Yes, there were compatibility problems in its first 6 months on the market. But that is very typical of most new releases of Windows. Industry support and continued updates to the OS such as SP 1 and 2 have made the OS even more popular and its on over 250 million PC’s world wide. I am sure a lot of users had a choice between an Intel Mac and a another name brand and they could have chosen the Mac. But they see the full value in a Windows PC, the Mac is a gimmick and they Apple realize it, that’s why they are starting to lower their prices in a molasses like way.

    As for Windows 7, you should download the Windows 7 RC before jumping to a conclusion about a product you obviously have not used. Features such as Jump List, Improvements to the Start Menu, Aero Snaps, Aero Shake, Aero Peek, Windows Touch, interactive Thumbnail previews, Improved Search features such as Input, Search Federation, AppLocker, BitLocker To Go, Direct Connect, Network Backup, Remote App, Firewall Profiles, Location Awareness, HomeGroups, Media Streaming, Play To, Internet TV, Sticky Notes with Ink support, Biometrics. Along with that, improved user experience in areas such as Personalization, Windows Update, performance – On demand loading of devices and services, efficient utilization of resources such as spinning up a DVD or a NIC, Battery performance allowing efficient use based environment lighting, improved multi-monitor support, DirectX 11, improved Windows applications such as Paint, WordPad…just the tip of the iceberg. Oh, lets not forget about freebies such as Windows Virtual XP.

    Yes, Windows 7 is an upgrade to Windows Vista. Yes, it is based on Windows Vista/Server 2008 technology. That’s a good thing, it means the investment over 200 million users have made in that version of Windows will be brought forward in terms of application and hardware compatibility.

    Look at OS X, 10.1, 10.2, 10.3, 10.4, 10.5, 10.6. Those are all updates, not upgrades. In fact, OS X users have been paying for fixes from versions 10.1 to 10.3. You have to admit, OS X didn’t get stable until 10.4.

  4. Have you used Windows 7, Avro? Are you speaking from experience? There is every sign “that Windows 7 will do better.” The OS is solid, and the new UI is productivity boosting. Many Windows PC manufacturers offer better hardware than Apple for less money.

    Windows 7 is good enough that I left the Mac to get better hardware: Sony VAIO Z590 laptop with 13.1-inch display with 1600×900 resolution and weighing 3.4 pounds. Apple offers nothing comparable. I would absolutely consider a Mac like my Z590. But there’s nothing–and Windows 7 is fast, fluid and flexible.

    There are many things I do miss about the Mac, with iLife being top of the list. But Windows 7 is good enough, and the PC hardware choices are better. Most businesses will choose Seven for reasons of compatibility and cost.

  5. Joe is spot on. Applications sell computers, not the other way around. Any major corporation utilizes Office, email and domain-specific applications. So long as those domain-specific applications (supply chain, manufacturing, inventory, ordering, whatever) are written for Windows, these businesses will continue to use Windows.

    Now, when these businesses move their domain-specific applications to the web, then the Mac could be a viable alternative. Not any sooner.

    Another good point about Linux. Linux would be a very attractive alternative for the enterprise except that:

    1) Linux doesn’t do well with laptops – issues with power management and hardware drivers, especially WiFi, bluetooth, etc.
    2) Microsoft Office is not available for Linux – and neither Open Office nor running Microsoft Office under WINE is an unacceptable alternative for most businesses

    (Interesting question: would Microsoft Office for Linux present the same strategic issues for Microsoft as Microsoft Office for Mac?)

    I also agree that Apple may see a halo effect from the iPhone – for home and small business buyers. Apple already saw this with the iPod. But this won’t make a difference in the enterprise – and again, partly because the iPhone has little market share inside major corporations.

  6. billybob says on June 16, 2009

    For any large business, the cost of the actual desktop hardware is next to nothing compared to the cost of servers and CAL’s. OSX Server offers a very cheap alternative to a Microsoft stack where a company can grow without being bitten by extra licensing fees.

    Other benefits like one supplier for hardware and software support must be a factor in their buying decisions.

    I disagree that Open Office is not good enough for most businesses, I think it more than fits their needs. Wine is also good enough for a lot of internal VB apps, and if it needs some tweaking then they can pay for support for their particular app from Codeweavers.

    All of this means a lot of price competition for Microsoft which I think means that from a MSFT point of view W7 is not going to stop the rot. It will likely be much less profitable than XP.

  7. billybob wrote: “Wine is also good enough for a lot of internal VB apps, and if it needs some tweaking then they can pay for support for their particular app from Codeweavers.” This is exactly the issue – corporate IT departments are not going to allocate resources to ‘tweaking’ WINE. Even if you buy the argument that care & feeding of Windows infrastructure is expensive, at least Windows is mainstream. Neither WINE nor Open Office are mainstream products. Good luck trying to staff an IT department to handle WINE ‘tweaking’.

    We need more competition, and I’d love to see Open Office do better. Or Google Docs. But every time I try them, I end up frustrated because so many things just don’t work correctly, if at all.

    (Apologies for my earlier typo – should have read “neither Open Office nor running Microsoft Office under WINE are an acceptable alternative”)

  8. billybob says on June 17, 2009

    The company using the software does not do the tweaking, they pay Codeweavers to add the code for their app to Wine. This means that the company has ongoing support for their applications all the way down to the metal forever. This is probably cheaper than upgrading their entire Windows stack.

    Once that is done, the application can be packaged and distributed very easily. If the IT department gets in the way then they are obviously not interested in helping the business so they should be fired.

    Everyone is going to have different Office requirements so Open Office is not going to be good enough for 100% of companies, it should work for 95% though. The latest versions are very polished.

    Even if this is not suitable for businesses, they just tell Microsoft that they are planning to upgrade to Linux and collect their 30% discount on any Microsoft software.

    I see you are a Microsoft partner who makes money from selling Windows-only software which requires Office. Could this be something to do with your reluctance to accept Open Office?

  9. NickH says on June 17, 2009

    @Billybob,

    The fact remains that organisations are not, in large numbers, replacing Office with free alternatives, let alone replacing Windows as the operating system.

    Is this because they just don’t know about the alternatives?, or because people who actually have to put their money where their mouths are don’t find the situation to quite as clear cut as you would like to make out? or maybe some other reasons?

    There must be some reason(s), and I’m interested in what you think those might be?

  10. whatever says on June 17, 2009

    Couldn’t agree more, the corporate IT space needs more competition – for everyone including Microsoft’s sake.

    Microsoft’s licensing of their protocols (if done right and priced fairly for both parties) will hopefully aid in having a broader and more realistic set of choices in many areas of the corp IT marketplace which don’t entail ripping out half your existing infrastructure…

    Billybob – just to highlight another (though much costlier) approach for delivering legacy applications:
    I have had much success using products like Citrix XenApp for delivering Windows-based LOB apps to Linux / OSX / Windows desktops and Thin terminals in the past. This is particularly effective if the client has a number of legacy Windows LOB apps and a number of web based applications – in the long (measured in years) time period of phasing out the legacy applications it’s a very effective gap solution. (Along with a host of other but unrelated benefits)

    On a tangent – I believe that there is a good chance that enterprises will slowly move away from corporate owned/configured/locked-down/etc computers to personally owned computers in many scenarios, with corporate IT services delivered to the personal computers in a low or no-touch self-service type manner. I think technologies like RIA or web based applications, VDI, client hypervisors, etc will accelerate this further – not to mention mobile.
    This i think could in turn grow the base of Linux-based and OSX-based computers in the enterprise, although in the guise of private computers.
    Now of course this doesn’t make sense for many use-cases, but for the so-called information workers i personally believe this approach makes a lot of sense. Why buy, provision and manage something that most people already have… (eg, laptops, etc)

  11. billybob says on June 17, 2009

    Where is the data to back up your assertion that nobody is replacing Office, and what would you consider a large number?

    Maybe you are really big-time, but some of these deployments are in the hundreds of thousands of desktops and I consider that to be fairly large.

    http://wiki.services.openoffice.org/wiki/Major_OpenOffice.org_Deployments

    If nobody was considering OpenOffice then why are Governments dictating open standards for documents and why did Microsoft begrudgingly accept the ODF standard?

  12. whatever says on June 17, 2009

    Joe, i just want to point out something with Snow Leopard as it relates to PPC machines…

    The only significant user-noticeable improvement they miss out on is Exchange (2007 only) compatibility without having to use Entourage.

    Only the top top 1 percentile of G5 based machines is more than dual-core, so for most any users GCD improvements would have been minimal.
    As far as i’m aware there are no G5 mac graphics cards that could technically support something like OpenCL (or CUDA for that matter).
    More importantly both of those key technologies won’t make a big impact for at least another 1-2 years, until applications start to leverage it, by which time the newest PPC mac is then 5 years old.

    On another topic, from what i gather Apple’s Logic Studio is also making big waves in it’s vertical, which isn’t much smaller than the FCP vertical, not to mention OSX’es ability to consistently handle and process audio at very low latency – whether using Logic or Pro Tools.

    I do find it funny that you love the Nokia N series so much because of it’s content creation capabilities – i remember a post from months back about how the iPhone is fine for consuming content but the Nokia N is so great for content creation (video blogging, high-quality photos, etc), but you don’t quite see the Mac’s content creation prowess with iLife, Final Cut, Logic, and others with the same importance… 🙂

  13. Joe, have you used Snow Leopard? You will contradict your statements about leaving the Mac if you say you have. I think Avro is a bit off base with his “no signs that Windows 7 will do any better” comment, but the jury is still out. The jury of public opinion that is. The current users of Windows 7 are, for the most part, Windows enthusiasts. They are knowledgeable of Windows, can work around minor annoyances, and are more forgiving for the moment. Meanwhile Snow Leopard is shrouded in as much secrecy as Apple can get away with.

    I have used neither, but from what I’ve read, we’re in for a real shoot out come fall. Both Windows 7 and Snow Leopard are evolutionary by design, but the stakes have never been higher. Vista and Leopard were not great, and Vista really stumbled on its initial release. The tech media is going to bash the other side, no matter how good it is. An SP1 release will be too late.

    For Snow Leopard to succeed, it better feel crisp, like Linux does. Grand Central
    better help developers to write multi-threaded code. Exchange support better work. Users will need to see a difference in an OS that has changed mostly under the covers.

    For Windows 7 to succeed, Microsoft needs to keep vendors from loading on the crapware. Users need to welcome the task bar changes. XP Mode needs to support IE6 for the foreseeable future. And a more virus free environment would certainly help.

    If I were a betting man, I’d bet on Snow Leopard. It won’t be a game changer, but it will let Apple resume taking market share from Microsoft. And Microsoft will stub its’ toe on something, performance, compatibility, licensing. When you get up to 1.2 billion users (Andre’s numbers, not mine), you’re going to piss somebody off.

  14. NickH says on June 17, 2009

    Hi Billybob,

    > Where is the data to back up your assertion that nobody is replacing Office

    I am the development lead on a leading SAM toolset, and what we see in our customer(*) audit data is that Office usage is close to one-to-one with desktop devices. OpenOffice? We don’t see it much.Even most corporate Macs have Office installed.

    Government is dictating open standards because they suddenly realised the wealth of information stored in a proprietary format. Its not about not using Office, its knowing your information is not needlessly locked up.

    (*) our customers are of all sizes, smallest maybe 100 users, largerst customer, hundreds of thousands of desktops worldwide.

  15. Thanks Nick, I’ll give you more credit now, not that my opinion counts for anything. I had to look up SAM toolset, and don’t know if you mean Software Architecture Modeling or Software Asset Management. I’m leaning towards Software Asset Management, based on your confidence.

    But give billybob some credit. There is competition to Office where none existed before. And the government concern over proprietary formats is justified. Microsoft has done everyone, themselves included, a terrible injustice by not maintaining backward compatibility with Word and Excel documents.

  16. NickH says on June 17, 2009

    Hi Dave,

    Yeah, Software Asset Manangement.

    Just the mention of Microsoft seems to polarise people so much, the assumption is that everyone is polarised. However, I am not. So…

    > “And the government concern over proprietary formats is justified. ” etc

    Yes, I 100% agree, and never said otherwise. What I said was goal of using open standards was not to avoid/punish Microsoft, but to avoid vendor lock in.

    > But give billybob some credit

    I agree with him more than he seems to realise. My question to him was well meant: As there are free and adequate alternative to Office, why aren’t more people using them?

  17. Hi, David,

    I haven’t used Snow Leopard, but, of course, Windows 7. I have spoken privately to developers using Snow Leopard. I’m not hearing much excitement.

    There are many reasons why I’m not betting on Snow Leopard. Top of list: It only extends the Mac install base if people buy new hardware.

  18. Manolo says on July 8, 2009

    All these points are part of Mac OS X sind 10.4/10.5. The difference between Apple and Microsoft is simple: Apple invents and innovates the whole industry while MS copies things like Backup Solutions, Firewalls and all the rest of your list. But ask yourself about the first OS with this possibilities…..

    And Snow Leopard is also an new version of the OS. You cannot say that it is a service pack. It surly fixes some security issues, but waht about the native 64 bit kernel, the great and optimized multicore support und OpenCL? That’s for usual not part of a normal free update.

    Other examples: try to open file extensions like docx oder PDF on windows with a new installation and “no” internetconnection. Yes, this is where your problem starts. You need a third party solutions for every extension, even for Microsoft stuff like word documents!

    The next point: 90% market share by microsoft. Surely, but count the illegal distributions and the distributions payed for. OHHHWHEEE

    Regards from Germany

    Manolo

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