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June 10, 2008 3:24 PM

Apple-Microsoft: Friendly Exchange



News Analysis. For years, Microsoft has been the largest Mac developer outside of Apple. It's return favor time.

Apple and Microsoft may be the definition of "coopetition." The companies may compete, but they're surprising partners, too. Even as Apple's "Get a Mac" ads throttle Windows Vista or as iPhone 3G whacks at Windows Mobile, Microsoft's competitor has become a surprising partner for Exchange Server 2007. Exchange is suddenly very important to Apple.

In March, Apple announced that iPhone 2.0 software would support Microsoft's ActiveSync, offering full synchronization fidelity with Exchange Server. The update is coming soon, presumably July 11 with the release of iPhone 3G.

Yesterday, Apple CEO Steve Jobs started his World Wide Developer Conference keynote by talking about Exchange Server support: "We've built it in, out of the box in iPhone 2.0 software." There is support for push calendars, contacts and e-mail, auto-discovery, global address lookup, and remote wipe (if the device is lost or stolen).

He touted industry interest: 35 percent of Fortune 500 companies participated in Apple's Exchange beta program, including the top five commercial banks and security firms and six of the seven top airlines. Steve then showed a video with enterprise technology managers touting iPhone's Exchange support.

Later in the keynote, Apple's Phil Schiller introduced the new service MobileMe, which he described as "Exchange for the rest of us." That line also appears in online MobileMe marketing materials. How many people outside of the technology business really know what Exchange is? Certainly it's a smaller portion of the population, yet Apple uses Exchange as part of its MobileMe promotionals. Apple's marketing is always deliberate, using words that convey broader connotations or meanings. Apple must believe that Exchange is well-known enough and sufficiently embodies what it wants to convey about MobileMe.

Something else: Yesterday, quite quietly, Apple also started talking about the next version of Mac OS X, Snow Leopard. According to the Snow Leopard informational page posted yesterday:

"Snow Leopard includes out-of-the-box support for Microsoft Exchange 2007 built into Mail, Address Book, and iCal. Mac OS X uses the Exchange Web Services protocol to provide access to Exchange Server 2007. Because Exchange is supported on your Mac and iPhone, you'll be able to use them anywhere with full access to your email, contacts, and calendar."

There is limited Exchange support in Mac OS X 10.5, or Leopard, but its successor apparently will go much further. Fuller Exchange support makes sense, given that Apple licensed ActiveSync from Microsoft and iPhone 2.0 supports the server software.

Apple isn't doing Microsoft any favors, though, same with Microsoft and Mac development. Microsoft develops products like Mac Office because they sell well; the company makes money. Apple is finally starting to take the enterprise market more seriously. Any enterprise move would necessitate supporting Exchange, and Apple has more to offer businesses with iPhone and Mac OS X.

Apple is Exchange Server's newest developer buddy. But don't get too cozy, guys. The friendship is really about buddying up to Exchange's enterprise friends, to whom Apple would like to sell iPhone and Macs.

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Comments (22)

Bill :

There you are. Far better article than whining about DRM.

Needless to say, because there's no equivalent to ActiveSync for Lotus Notes/Domino - the Domino folks (including me) are left out of the iPhone party.

Much gnashing of teeth.

---* Bill

chips :

If nobody has noticed Apple seems to be a torn in the side of MS these days, and more so to the OEM's that are forced to pre-install Vi$ta on their computers to sell.

MS has only one way to punish Apple, and that is to not release any more versions of MAC (microsoft) Office. This could delay the conversion of Windows to Mac OSX for corporate use.

But here is the latest rumor, which should scare the heck out of MS. Bear in mind, its a rumor.

Google may be interested in buying Apple

http://mashable.com/2007/06/20/google-to-buy-apple/

Quote from the link; "Rumors have circulated over the last couple days that Google may be interested in buying Apple. The rumors stem from a recent New York Magazine article, in which the author cites a source close to Steve Jobs implying that because of his past health battles (pancreatic cancer) and Apple’s stock back-dating options scandal, the iconic leader may be worn down and looking for an exit."
--------------------------------------------------
This would actually make some sense from the google standpoint, as it would let them directly compete with MS platform.

chips :

Well, that rumor is a year old, so we know how it came out.

Apple/Google is not a very good sauce. Google would not have much need for the PC part of Apple, although the gadgets would fit. The value of Apple is higher with the PC-part combined with the OS-part+EULA. That does not look like Google.

M$ could buy Apple, however, barring personal antagonisms... M$ could sell a brand of PC designed to work well with their OS. They could also sell gadgets. How would the PR go with M$ saying they support choice: our OS or our other OS? It could be a better way to compete with FLOSS. They would not need "backward" compatibility on the one hand and, on the other hand, MacOS could become their test distro and their old stuff could be for the truly locked-in. Being able to innovate in MacOS might be M$'s last hope to avoid going the way of the dinosaurs.

chips :

The reason the rumor might have some relevancy, is that Steve Jobs health is being called into question now.

Is Steve Jobs Sick Again, or Just Thin?

http://seekingalpha.com/article/80638-is-steve-jobs-sick-again-or-just-thin?source=feed

It was even on the Drudge report the other day, but that post is gone, and I don't have the link, sorry.

Ralph :

If Apple wanted to really make some serious profits and take the wind out of Microsoft. Simply release a PC version of OSX.

With the ongoing issues with the public non acceptance of Vista and the discontinuing of XP at retail. Seems the time is right for Apple to fill in a tremendous void that needs to be filled. If not, then simply expect Linux to make more gains.

As it is... recent news stories (Google Linux and then click news) has 1000 school desktops moving to Linux in Canada and 20,000 Sun Corp desktops moving to open source in Australia. And the EU is recommending that member states move to open source and away from Microsoft.

The time is ripe and the market and the need is there. Maybe if Google does buy Apple, it could happen.

chips :

Joe Willcox has commented on the health problems of Steve Jobs here; the applewatch link on the right hand side now, or use this link;

http://blogs.eweek.com/applewatch/content/corporate/steve_jobs_perception_problem.html

Still I would think that Steve Jobs would prefer a Apple/Google merger over the possibility of Apple being bought up by the Borg. Hopefully, all health will return to Steve, and this is only a bug that has affected him in the short run.

dev :

Joe, the comedic irony is that with the release of 10.6 in about a year (say June 2009), Mac OS X will be a BETTER Exchange client out of the box than MSFT's own flagship OS, Vista!

To be better than OS X, a Vista desktop would have to have a copy of Office 2007 installed, or at least a $100 standalone copy of Outlook!

BlahBlah :

The Windows Mail client that comes with Vista is not an Exchange client at all. It's just either IMAP or POP.

There's good reason why there isn't one - corporations use MS Office exclusively and home users don't use Exchange.

It's never been an issue before

dev :

@BlahBlah

I think you missed the irony completely.

OUT OF THE BOX, Apple OS X supports Microsoft Exchange. Vista DOESN'T.

Let me simplify it:

-Apple Mac OS X: FULL Exchange support
-Microsoft Windows Vista: NO Exchange support


Maybe you need to picture yourself as Microsoft to understand the irony:

Your arch competitor provides full-featured built-in support for your own Enterprise messaging system at NO ADDITIONAL COST. And yet your own OS provides absolutely ZERO built-in support--even after spending $339 for Vista 'Ultimate.'
.


Of course, we now know Apple's reason for doing this. By licensing ActiveStync and incorporating the functionality into the base OS itself, Apple simply bypasses MSFT's intentional crippling of Entourage. A BRILLIANT end-around by Apple!

And the Mac/iPhone enterprise pieces slowly continue to be put into place...

futurological :

Outlook is free for exchange users as each exchange user license includes the right to install the provided Outlook client. Therefore XP and Vista does have exchaneg support out of the box and Office need not be purchased!

BlahBlah :

@dev - I got your point, you missed mine.

Futurological is 100% correct

Either way corporations who would actually need Outlook would have Office anyways.

It's not a brilliant AAPL move or anything else. Corporations that wanted to use Macs would just use Office for the Mac anyways. Those that didn't would not be using Exchange.

Al :

For anyone worried about MSFT buying up Apple, don't worry. The merger would NEVER pass DOJ antitrust muster, let alone the EU.

If Apple were serious about putting the screws to MSFT, they would indeed release OS X for general x86_64 HW configurations. That's put pressure on Mr. Softie to develop a better OS.

Though Al wouldn't hold his breath. Jobs has shown to enjoy shafting Mac buyers by overpricing the HW (& no one better give Al the "macs are better quality" BS. perhaps compared to a cut rate Dell junkbox they are, but the DIYers are probably buying the same if not better parts for their rigs)

richard :

> full-featured built-in support for your own Enterprise messaging system at NO ADDITIONAL COST.

In a certain other (vastly more) broadly distributed OS, that would be termed "bloatware" by those who didn't want it.

sjohnson :

A1 - The market dermines if Jobs is "shafting Mac buyers by overpricing the HW ". As Apple's PC marketshare continues to grow - the Market has spoken.

Pankaj :

does inbuilt exchange support in iPhone mean i will be able to share my Outlook contacts, tasks, calendars?

Josep :

Answering to Ralph's " If Apple wanted to really make some serious profits and take the wind out of Microsoft. Simply release a PC version of OSX."

Apple does not need to release a PC version of OSX. Apple is making serious profits already. See for yourself in "Profits vs Market Share." segment of:

http://www.roughlydrafted.com/2007/07/29/10-fas-7-apples-hardware-and-dvoraks-microsoft-branded-pc/


In the most recent quarter ending in June 2007, Microsoft reported revenues of $13.37 billion and $3.035 billion in net income. In the same period Apple earned revenues of $5.41 billion and a net quarterly profit of $818 million.
That means Apple is bringing in more than a third of Microsoft's revenues and making more than a quarter of Microsoft's profits, despite the huge disparity in market share.

This is as for June 2007, so now it should be even higher.

BlahBlah :

@Pankaj - yes, it'll be every bit as good as on Windows Mobile devices today which BTW is excellent.

Three Sevenths :

Apple cannot feasibly release their OS for the General PC platform. Microsoft has a huge driver base and thousands of hardware vendors developing drivers for the WDM model. Mac OS enjoys a subset of the available hardware meaning it does not need the same amount of drivers. I am not speaking of external USB / Firewire deviced but internal resources at the core of the system. It would take years to get a broad enough driver support base for the OS to become usable by a significant proportion of the market. And before you reply saying that Macs are based on Intel system because it is still a closed hardware specification.

3/7

inf2700 :

@futurological: Not exchange 2007 cals. You need to buy outlook 2007. This was true for previous versions of exchange cals

dev :

@inf2700
Thanks for the support!

@futurological
@blahblah

As inf2700 has just explained to you, both of you are incorrect. I've been supporting Exchange installations since 5.0, and Exchange 2007 CALs do NOT include an Outlook license. And Outlook licenses cost $109 EACH (MSRP).

So with that education, please reread my original post and UNDERSTAND:

"...the comedic irony is that with the release of 10.6 in about a year (say June 2009), Mac OS X will be a BETTER Exchange client out of the box than MSFT's own flagship OS, Vista!

To be better than OS X, a Vista desktop would have to have a copy of Office 2007 installed, or at least a $100 standalone copy of Outlook!"

MSFT removing the Outlook license from EXCH07 CALs (which cost $67 a seat!) is simply gratuitous additional arse-reaming of powerless business customers now hopelessly locked into their proprietary messaging server.

Do you think that some SMB's might be looking for a way to extricate themselves from the MSFT tax? Once mgmt discovers most of their mobile users are using Macbooks or iPhones to seamlessly access Exchange without the sky falling, after a couple years a Snow Leopard messaging server (or even a standards-based 3rd party server like IceWarp) might look pretty good for the bottom line. One price, no CALs to buy--EVER. And I wager that Snow will include a very cool AJAX web client (like used in MobileMe) when released. (Yes, 10.5's SquirrelMail sucks compared to OWA.)

jpelak :

Microsoft and Apple working together should be encourage, and demanded by consumers. This is why the iPhone will be supporting ActiveSync and Exchange.

Wouldn't it be nice to see the iPhone supporting Silverlight too?

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