Apple OS a Threat to Microsoft - Yes, But Not For The Reasons You'd Think

A few days ago a friend pointed me to an article that Gary Morgenthaler wrote for Business Week. Gary's main thesis is that Apple's products have a huge momentum in the market and that they are taking away market share from Microsoft. I agree with that thesis. What I don't agree with is the evidence he presents to support his thesis.

His theory is based on four main points:

1. Apple <a href=""Spaces feature allows the user to run Windows applications and the Windows OS from within Apple OS X;
2. The adaptability and flexibility of the Apple core OS X kernel allows Apple to move faster than Microsoft;
3. As large companies become more mobile, Apple is strategically positioned to take a big bite of that market with its line of laptops and the iPhone; and
4. Apple software development kits allow independent software vendors to create applications that run on OS X. I want to address each of these points individually.

Apple Spaces

Gary wrote Instantly you switch from a Macintosh operating system to a Microsoft Windows OS. He then adds This easy toggling on an Apple computer, enabled by a feature called Spaces,... and further down he continues 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.

He is mistaking a Virtual Desktop (VD) for a Virtual Machine (VM). Spaces is a VD, a feature that allows the user to work on more than one desktop at a time and to toggle a desktop from foreground to background and vice-versa. The type of software that allows the user to run an OS within another is a VM. There are also emulators that provide a compatibility layer, which is usually implemented as a library, and come in the form of Wine for Linux or Cygwin for Windows. Maybe Gary was thinking of Apple's Boot Camp feature that acts as a boot manager for OS X.

But I want to give Gary the benefit of the doubt and assume that he means a VM rather that a VD. A VM, however, does not give a strategic advantage to Apple. VM software is an ubiquitous commodity: There are VMWare, Parallels, VirtualPC, QEMU, and Xen just to name a few. This is more of a liability to Apple and to illustrate what I mean I want to rephrase one of the sentences I quoted above from Gary's article: Windows users, in the very near future, will be able to run Apple OS X from within Windows, without suffering the pain of paying for the Apple hardware premium. VMWare itself uses its own software to run OS X on Dell and HP computers.

The ability to run Windows OSs and applications on the Apple hardware is also facilitated by the fact that Apple has switched the CPUs in its entire product line to Intel. This also means that Apple has ported OS X to run on Intel chips. Which, in turn, means that OS X can, in theory, run on any Intel based device. As a matter of fact, many have already hacked the Apple OS X to run natively on non-Apple hardware and VMs.

OS X Kernel Flexibility and Adaptability

If you define flexible and adaptable as susceptible of modification and able to adjust oneself readily to different conditions, respectively, then the Apple OS X kernel is none of the above. At the core of Apple OS X is an operating system kernel that is based on the Mach kernel.

Mach implements a microkernel architecture, which means that the kernel itself provides only essential core services such address space, process management, and inter-process communication. The core of a microkernel architecture rarely changes. What changes are the other OS services (Memory manager, Networking, etc.), that don't necessarily run on kernel mode, and drivers as well.

Apple sells three models of laptops and three models of desktops. All of these devices have essentially the same exact innards across the board. What changes is the form factor. Equal hardware devices and peripherals require equal drivers and software across the entire product line. The OS does not have to change one bit to support that. Any changes can be supported with drivers for the different hardware components.

Windows, in the mean time, has to run on several different form factors of laptops and desktops, and several of them have manufacturer specific devices built-in. The Windows kernel, in this regard, is the flexible OS kernel, not the OS X kernel. The irony here is that Rick Rashid, Microsoft's Senior VP of Research, contributed a lot of work to the Mach kernel 17 years ago when he was affiliated with Carnegie Mellon University.

When Apple decided it was time to go through a major real change, it took them a year and a half to make the necessary modifications to the core of OS X. In June 2005, Apple announced that it would switch to Intel processors across the entire product line. They didn't actually ship the first Intel-based Mac until January 2007. Microsoft did take almost six years to ship a new OS and this is more of a reason for the current rise in market share for Apple. The Linux core group of developers, on the other hand, can crank out work like this in less than six months. I say that Apple's ability to deliver on major changes to its core technologies is above average for a large company. But it is not as easy as Gary has alluded to in his article.

Apple Products in Large Companies

Gary writes that Apple's products are well positioned to take off in the enterprise world. I will argue that most enterprises are going to compare a Lenovo or Dell laptop to an Apple laptop and say that they can't justify the extra cost of the Apple machine. Apple's products are well positioned to gain a lot of market share in the consumer market, however. I will discuss this again further down.

Gary also writes that Apple's recently introduced Leopard servers compete in a market of unhappy Vista server buyers... Vista server has not been launched yet. The current server offering from Redmond is Windows Server 2003, and it is doing very well still.

He also mentions that the iPhone will gain corporate customers for Apple because it will soon provide corporate email access and calendaring. I am wondering how it will accomplish that when the business is running an Exchange server and there isn't an Outlook client for the device.

Apple SDKs

An OS by itself has never really meant that much as a strategic advantage for any company. What really means something is the number of independent software vendors writing applications that run on your platform. Microsoft became what it is today because it understood this fact 20 years ago.

The fact that Apple has an SDK for the iPhone or for its lines of computers means that more Windows applications will be ported to OS X. But it doesn't necessarily means that the Mac or the iPhone will have more applications that run exclusively on them.

What OS X needs is a killer app like the Apache web server is for Linux and Office is for Windows. Some may argue that Photoshop is the killer app for the Mac, but it isn't exclusive to the Mac like Office and Apache are mostly exclusive to Windows and Linux.

Why is Apple Really a Threat to Microsoft

There are four reasons why Apple is a threat to Microsoft now. Gary hints at one of them in his article, but he doesn't explore it further.

The first reason is that Microsoft has really messed up bad with Windows Vista. Users and developers who in the past were willing to put up with Windows annoyances, have now left the platform in droves to Apple OS X or Linux. There is evidence of this everywhere: Dell went back to offering PCs running Windows XP and other free operating systems. Other PC manufacturers have followed suit. Developers are blogging about it. All this without mentioning the class action law suit filed against Microsoft on behalf of Vista users.

Second, Apple is not a hardware nor a software company. Apple sells cool. Their main product is the coolness factor and their technology is just an enabler for them to market the coolness factor. Cool has appeal to the masses and people are willing to pay a thousand dollars more for it. Cool is Apple's purple cow. People are willing to care about you, as Seth Godin so eloquently puts it. People are willing to be irrational, as those who, in one breath, say that they don't want to be locked into the Microsoft platform, and on the next breath, they buy into the Apple lock in. Apple locks you in even more than Microsoft because they control the whole experience: hardware and software. How does Apple get away with that and Microsoft doesn't?

The third factor is that Apple is able to do work under a veil of secrecy that none of its competitors can achieve. There is a great article on April 2008 Wired issue that explains how this works. In a nutshell, Microsoft has to share product plans and release schedules with its OEM partners so that hardware and software releases match. Apple doesn't have to do that for obvious reasons. Apple was able to work on the iPhone platform for three years before anyone even realized what they were up to.

The real ace up Apple's sleeve is Steve Jobs, though. He's known for being very hard to please and even a jerk at times, but he has charisma and inspires people to do great work and overcome insurmountable odds.

I am curious to know what you think.