Macs hang on in fed market, but future remains uncertain

Apple Computer Inc.'s Macintosh is not dead in the federal market but the platform's future prospects are uncertain.

That is the analysis of industry executives and analysts who have been following the company. On the one hand they report that agencies so far are not scrapping their Macs in favor of PCs running Intel Corp. processors and Microsoft Corp. Windows - a scenario that is reportedly playing out in corporate America. Indeed Apple is retaining its stronghold within federal agencies where users have made it clear that they will not easily part with their Macs. Apple held a 4.2 percent share of all federal desktop PC shipments in fiscal 1995 for a ranking of seventh place among vendors according to International Data Corp.

On the other hand while federal Mac users remain loyal the company has difficulty growing from its base."Apple has been losing share in the federal marketplace in the last few years as there continues to be a strong drive toward standardization" on desktop PCs said Steve LeCompte vice president of IDC Government Market Services. "There are pockets of Mac use in the scientific agencies such as [the] Department of Energy NASA and [the] National Institutes of Health. But they are not really making it in the federal government."

The company's shipments to the federal market declined 31.9 percent in fiscal 1995 from fiscal 1994 according to IDC. IDC also analyzed Federal Computer Week subscriber demographics in July and found that 9 percent of the respondents were planning to purchase Apple's PowerMacs compared with 56 percent planning to purchase Pentium machines and 20 percent planning to purchase Pentium Pro PCs.

A spokesman for Electronic Data Systems Corp. which sells Macs on its General Services Administration Schedule B/C contract reported declining interest in the platform. "The level of activity and interest is not where it has been " he said. "There still is some but it is considerably less than in previous years."

"We have experienced a pause in the business " said Patty Neiss Apple's manager of federal sales. "But we have not seen an abandonment." Neiss said Apple is not anticipating near-term growth in the federal market but will focus on stabilizing revenue and unit shipments.

Apple is down but not out reported Dendy Young chief executive officer of Government Technology Services Inc. which offers Macs on the GSA schedule. "Macs are not dead " Young said. "But there is a great deal of uncertainty as to the future." Young went on to characterize Apple's ability to hang on as a credit to the technology's populist appeal. "It is not just the loyalty of the Mac user but the culture of the Mac relationship."

This deeply rooted relationship has made it difficult for agency managers to toss out Mac architectures Young said. "Every so often we see attempts by an organization to do that " he said. "It has occurred within Los Alamos and the Navy. And at the moment an agency tries to do that users get up in arms."

That scenario is under way at NASA's Johnson Space Center in Houston where employees are reacting to what they characterize as an overt effort to rid Johnson of Macs. A May letter to NASA administrator Daniel Goldin signed by "Concerned Taxpayers" at Johnson accused the regional chief information officer Jack Garman of "creating and imposing" a Microsoft workstation standard on Johnson.

In response NASA maintained in a June letter to all centers that the agency will not make technological choices that exclude entire platforms. "Quite simply we recognized that the diversity of our end users' requirements and applications necessitate that our IT architecture be flexible enough to adapt to and optimize their needs " according to the letter which was signed by NASA chief information officer Ronald West.

Still the space center is allegedly imposing a migration from Macs according to a source who requested anonymity. That charge is now the subject of a NASA inspector general report. According to Charles Heaton a management analyst within NASA's Office of the Inspector General that report will be issued by mid-October.

Such drama however is not broadly found in other agencies in which users are happy with their Macs and the cost to move all users to PCs is considered too high. Said Dieter Fuss the distributed computing support program leader at Lawrence Livermore National Laboratory "There is nothing rapid going on here. There is a slight increase in PC procurements than in the past. But you have to remember that hardware is only a small piece of the overall cost of operations. There are also expenses in retraining and buying new software."

At the National Institutes of Health Al Graeff the chief of the information systems department at the agency's Clinical Center echoed Fuss' assessment of the state of Mac use. "NIH has a significant number of Apple Macintoshes " Graeff said. "As long as the application developers continue to support the Macintosh we will make no overall decision to get rid of all Macs."