Apple In The Channel: You In?

By Matt Pillar, chief editor

Seven historically valid reasons for VARs and MSPs to ignore Apple, and seven counterpoints on why that might be a mistake today.

Apple is subtly doubling down on the enterprise computing space. The company’s latest moves include some partnership deals that suggest recognition that channels are central to its enterprise success.

As Apple chief exec Tim Cook detailed the growth of the company’s Apple at Work initiative on a recent conference call, he was careful to play up partnerships with enterprise IT giants like Accenture, mega-VAR and launch partner CDW, Cisco, Deloitte, IBM, and SAP. This is effectively the tip of Apple’s enterprise sales spear, but the company would also like to sink that spear deep into the belly of the SMB market, where acceptance and adoption of Apple products for business use remains hot. SMB is also a market in which IT procurement and services are heavily channel dependent, which sets up an interesting scene.

Historically, service providers, and more notably VARs, have been decidedly cool to the sale and service of Apple products for a host of good reasons, some of which remain true today. Among them:

• With the exception of its desktop computing business, Apple is considered a consumer-grade tech company.
• Its products are expensive and widely available for direct purchase.
• Windows dominates the work scene.
• The market for pure-play Mac shops is limited.
• In hybrid Windows/Mac environments, there’s a degree of network and service complexity involved that service providers don’t want to touch. 
• Mac break/fix opportunities are a poor way to make any money. Their proprietary build contributes to longevity of service. In rare vents when service is necessary, many shy away from complex repairs with components that aren’t readily available.
• The channel has sprung into full-on data security mode, spawning a giant brood of MssPs, payment, and cyber security consultancies. Few of them see the Apple user community as a target-rich sales environment, in large part because of the general perception that Macs are bulletproof. This is rooted in the notion that nefarious hackers aren’t necessarily interested in collecting ransoms from the organizations that have traditionally run Macs (read: advertising and creative agencies).

Paints a pretty bleak picture, doesn’t it? These perceptions and historic realities would certainly temper my enthusiasm for adding Mac sales to my line card, despite the growing popularity of iOS devices and the company’s brand power. The thing is, some of this stuff isn’t true anymore. Or soon won’t be. Here’s why VARs and MSPs are wise to let bygones be bygones and give Apple another look.

• Despite its perception as a consumer-grade company, enterprise sales are fueling Apple’s fastest growth. According to IDC, the use of Macs in enterprises employing more than 500 grew 128 percent between 2010 and 2016, compared to 13 percent growth for Windows PCs. That’s pretty compelling.
• Barring revolutionary developments, hardware margins aren’t coming back. But, I’d rather make single-digit margins on an $1,800 machine than a $500 machine. Apple also launched, albeit quietly, a VAR rebate incentive for Mac and iPad products a couple of years back and it manages volume purchase programs for B2B apps and books. Sure, these are commodity products, but so are the PCs and tablets you’re peddling now. If it acts like a sales channel and talks like a sales channel…
• Windows may still dominate the desktop work scene, but digital transformation is mobile-device dependent. Recently, as Apple goes so goes the North American mobile market. iOS device shipments have long been gaining ground on Android units and in fact surpassed Android device shipments in November 2017. As long as Apple owns close to half of the mobile device market here (though a far smaller percentage globally), its devices will play a key role in enterprise digital transformation.
• We’ve ascertained that Apple is selling more iOS devices to enterprise than it ever has before. Who’s buying them? It’s not just advertising and design agencies. The leaders of VAR, MSP, and even B2B software vendor companies that specialize in the sale and support of Apple products, companies like Addigy and GlobalMacIT, tell me that professional service organizations — think law, financial, and accounting firms —represent the current hotbed of opportunity. Jason Dettbarn, who once drove sales for Kaseya, is the CEO and founder of Addigy, a company that’s built a cloud-based management platform for Apple MSPs. He says Apple’s track record of stability and security are driving the trend, and it can be followed all the way to the c-suite. “Companies that are charging upwards of $300 an hour demand uptime. When devices and networks break, they want them fixed in minutes. Macs are popular there because their stability leads to higher billables through productivity,” he says.
• As a result of Apple’s enterprise market penetration, we’re seeing a push toward more seamless data and application sharing between Mac and Windows. Plenty of folks run Microsoft Windows for Mac, and plenty more serve iOS field machines with data and applications from a Windows server. In my home office, a MacBook Pro has been my “daily driver” for the past seven years, and it plays quite nicely with my Windows desktop and server. There’s no logical reason a hybrid environment can’t scale.
• If Apple can maintain Mac’s sacred reputation for self-healing and uninterrupted uptime, break-fix purists need not apply. No matter, because that’s not the channel’s current cash cow anyway, nor is it representative of our future state. There is money to be made on Mac-specific managed services, and there’s a growing ecosystem of companies like Dettbarn’s that are eager to serve it.
• Apple has never claimed iOS to be invincible to cyber threat. Between its proprietary build and historically small market share, bad actors simply never put much of a bounty on taking down a Macintosh. That’s poised to change on account of Apple’s own success. The more market it owns and the more verticals it penetrates, the more attractive it will become for hackers to crack into a Mac. That reality extends the managed security service play to iOS business users.

These realities make onboarding Apple look like a promising bet. I can name a few service provider business activities that yield potentially worse margins than even hardware sales. All-you-can-eat break /fix and service offerings that support crappy hardware and applications, for one. Or flat-fee managed security services for inherently vulnerable networks and devices. Support of unstable IT environments has hampered many an IT provider’s bottom line. An Apple IT environment is decidedly not that.

If margins are low on hardware sales anyway, why not sell cool, sexy hardware your customers want? Why not charge monthly IT service and support fees for services and support that’s rarely necessary anyway, and enjoy that margin? Why not help dispel the notion that iOS is invincible and begin offering managed security services for Mac environments?

Have you found success reselling Apple or offering managed services for iOS devices? Have an opinion on why Apple’s enterprise push will—or won’t— benefit channel partners? We’d love to hear about it.