Tuesday, August 19, 2008

Service Quality at Apple; Extensions Total 120 Days

Apple's failure to deliver a worthwhile experience to MobileMe customers has caused Apple to attempt mollifying its paying customers through a series of no-fee subscription extensions. The cumulative thirty-day, thirty-day, and sixty-day extensions now total one hundred twenty days beyond the original scheduled end of customers' original subscription periods.

My original question was whether the extensions would actually showcase Apple delivering a high-quality service, and thus succeed in building goodwill, or whether the service would simply offer more of the same -- an extended demonstration that Apple neither knows nor cares how to deliver quality online services to paying customers. Apple's failure to deliver service has been quantified, and it's shameful. The only silver lining is Chuqui's explanation that the botched service isn't a reflection that Apple has some problem with enterprise sservices, but an indication that the particular team responsible for the service had its head up it's arse -- and has been replaced by the experienced first-string folks that made iTunes work. Apparently, the botched service was the output of ex-Microsoft employees recently escorted off Apple's campus with an invitation never to return. Given the difference between knowing what you want and actually building it, this is actually plausible. Outsiders with the wrong culture in a place lacking quality-assurance systems really do have the power to blow their leg off as they practice quick-draw on commercial services delivery.

Assuming that Eddy Cue is on the job and has been tasked with performance and uptime to make Apple's paid services the jewel of the Internet, Apple should be on the way to developing a fix. That's not to say the fix is in, yet; the whole architecture likely must be re-imagined along the lines of something that makes sense and can be scaled and can have features added to it down the road -- something dotMac just never delivered.

The bets should now center on how long it takes Eddy to right the MobileMe ship.

I initially expected the services Apple announced for the MobileMe package to be a prelude to offering broader-ranged enterprise solutions. The idea was that, having developed the expertise to offer reliable high-volume service through the iTunes Store, Apple would be in a position to offer third parties the benefit of its enterprise solutions expertise. I expected a services division รก la Hewlett-Packard was a reasonable projection.

I hereby withdraw the notion.

With Apple's delivery of reliable services dependent on an overworked team of maniacs, and being independent of any actual software service culture at Apple, it's a sure thing that Apple will fail to leverage its internal enterprise expertise in a way that will enable it to offer enterprise services expertise to third parties. To achieve what Hewlett Packard does in services, Apple needs not one top-notch team full of tireless maniacs, but a culture that enables stable growth and repeatable performance across teams. Based on Chuqui's analysis, I conclude Apple cannot deliver this, and that despite Apple's internal accomplishments its possibility of offering custom enterprise solutions to third parties is near-term zero.

Also, if Apple is offering what it does on the basis of SAP atop Suns or the like, Apple isn't even eating its own dog food. If Apple doesn't own the IP behind its own solutions, Apple hasn't much chance of offering them to others. Worst, if it takes a team of virtuosos to make Apple's solution sing, Apple will never be able to sell such solutions to enterprises who need to be able to run the solutions from a manual using whomever is available on-hand when the need arises. Apple can't be exptected to enter the solutions business. The idea of Apple developing consulting revenues should be considered an utter fantasy through the medium term.

That's too bad: a high-margin services revenue stream like that might be the kind of thing to keep multiples up.

Ahh, well. At least the paid customers will get their money's worth by the time Eddy's team is done.

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