The Executive Computer

Apple Invades I.B.M.'s Domain

By Peter H. Lewis
The New York Times

August 30, 1987

Walk into any major corporation and check the computers used there. The latest market surveys find that 85 percent of them are I.B.M. PC's or I.B.M. compatibles. That's hardly a surprise.

What is surprising is that 9 percent of them are from Apple Computer Inc., a company that not too long ago reveled in its anti-corporate image. Apple is now aggressively wooing the Fortune 1,000 community, the same crowd it once gleefully depicted in television advertisements as mindless drones subservient to the will of Big Brother - Big Blue Brother, that is.

While the Macintosh started life as a computer ''for the rest of us,'' as Apple liked to say, it now wants to be accepted as one of the big boys. ''We want to be the third center of gravity in computers, along with I.B.M. and D.E.C.,'' said John Sculley, Apple's chairman, at MacWorld Expo '87, a trade show in Boston earlier this month.

The company hopes to double its share of the corporate market by 1990, and such a growth curve might indeed be possible if the crowd at the MacWorld was any indication. More than 20,000 visitors, many of them wearing suits and corporate power ties, prowled among the 350 exhibitors, looking at new business software applications that included a wide selection of powerful spreadsheets, data bases and word processors - I.B.M.'s turf - in addition to the Mac's traditional base of desktop publishing tools.

''This show is very gratifying,'' said Guy Kawasaki, a former Apple employee who is president of Acius Inc., the maker of 4th Dimension, a data base program for the Mac. ''I can remember when it was MacPaint, MacWrite and 10 carrying-case vendors.''

Can Apple stake a claim on I.B.M.'s ground? A panel at MacWorld took up that issue.

One of the panelists, Sherman Uchill, the president of Sherman Howe Computer Stores, of Wellesley, Mass., talked about the perils of prognostication.

''To look forward you have to look back a little bit,'' said Mr. Uchill, one of the biggest Macintosh dealers on the East Coast. ''I started back in 1958 with I.B.M. as a systems programmer. At that time, or a couple of years before that, Arthur D. Little did a study for I.B.M. that asked how many computers were going to be used in the commercial world. The answer from A.D.L. came back that 50 computers would do the trick. Obviously they underestimated a slight bit.''

That sort of forecasting set the pattern for the computing industry, as a pertinent, or perhaps impertinent, example shows:

A dozen years ago, a young engineer named Steve Wozniak went to his employer, Hewlett-Packard, and tried to sell H-P on the idea of making a small computer that hobbyists could use at home. When the company said no, he teamed with another young man, Steven Jobs, and founded Apple Computer in a garage. Mr. Wozniak and Mr. Jobs are gone, but by last year Apple's revenues had reached $1.9 billion.

''One of the problems with forecasting is that you can't see the future very well,'' Mr. Uchill said drily.

But another panelist, Fritz R.S. Dressler, president of FRS Dressler Associates of Wallingford, Pa., and a writer and computer consultant, disagreed. ''Predicting the future is easy,'' he said. ''It's trying to figure out what's going on now that's hard.'' Having thus established the impossibility of their task, the panelists turned to Apple and its likely fate in corporate America.

''The big advantage that I.B.M. had a couple of years ago was that it essentially created the '110 volts' of software,'' said Jonathan Rotenberg, president of the Boston Computer Society, the largest independent group of computer users in the world. ''If you had an I.B.M. or I.B.M.-compatible computer, and an I.B.M. or I.B.M.-compatible piece of software, you could plug it in and it would probably work, just like you can buy an appliance and plug it into an outlet and expect it to operate. That's not true anymore and it's going to get worse.''

Indeed, millions of corporate computer users were shocked in April when I.B.M. abandoned its ''110 volts.'' The phrase I.B.M.- compatible no longer means anything. There are 5 1/4-inch disks and 3 1/2-inch disks. There is EGA, VGA, CGA and Hercules. There are buses and micro channels. There are MS-DOS and PS/2 operating systems, and I.B.M.'s highly touted but not-yet-available operating system called OS/2. I.B.M. is also talking about Extended OS/2, and there are rumors of OS/3 in the works.

The resulting mess represents ''a real opportunity for Apple,'' Mr. Rotenberg said, because Apple uses only one operating system, one disk size and one graphics standard.

Management information systems directors, Mr. Rotenberg said, ''seem to be a lot more sophisticated now in understanding what Apple is doing and what the Macintosh has to offer.'' He added, ''They recognize that in many ways it's a superior product and offers them features that they cannot get in the I.B.M. world.''

Even so, he said, ''there is the perception that they cannot have two standards coexisting in one company, that the minute they introduce this renegade product'' - in corporate computing, the Macintosh - ''it's going to be a mess, and support and maintenance costs are going to grow exponentially.''

He's right, of course. Some offices, in the newspaper business for example, have Mac's, PC's, PS/2's, mainframes, smart terminals and dumb terminals, all hooked together with a system of wires that could have been designed by Jackson Pollack. When something goes wrong with a piece of equipment, you don't know whether to call a computer technician, a telephone repairman or a priest. The day when the Mac and the PC can live together in effortless harmony is still very far away.

But Apple is moving in that direction. George Everhart, Apple's new director of business marketing, was the company's designated sacrificial lamb on the panel. He suggested that Apple already had a strong foothold in business.

''When we had shipped about our millionth Macintosh, approximately 70 percent of those had been shipped to business, and of that, approximately 40 percent had been shipped to companies with about 1,000 employees or more,'' he said. ''So we are making inroads already into the large business arena. It's clear we have a long way to go, but we are doing it.''