Also, revenue is nice for a new company. A photo from those days can still be found on Appleinsider. We were in the Mac mini niche so I was happy to see them go from our space. It was good marketing for us at the time, though I received a lot of interesting emails. I could have easily populated BrianDeathWatch. Since this software can handle any number of server nodes to draw from, we use both Mac Pro and Xserve to build the fleet for customers.
This helps us find just the right balance of price and power for any situation. All of our Xserves have the 8Core 2. Sidenote: These machines are similar to the Mac Pro 4,1 build. Or perhaps a mix of both. This gives them a powerful private cloud with geographic and hardware redundancy. We buy hundreds of Xserves at a time. That sounded like either a modest goal or a presumptuously aggressive one, depending on how much one knew about the mobile market.
More important than achieving some percentage of the overall phone market however, Apple targeted and successfully acquired a strategically significant chunk of the smartphone market; it was the most sophisticated and profitable segment, and the one where most growth was and will be occurring.
Sales of iPhones ramped up dramatically, followed by supporting sales of the iPod touch. Apple also chose to count its existing iPod sales separately from iPhone sales, obscuring the fact that iPhone were adding to iPod sales, rather than growing along independently. Seeking for something negative to report, pundits had fixated on the flat growth of non-iOS iPods, failing to realize that Apple had actually expanded the premium MP3 player market it had essentially invented, adding in the most recent quarter over 14 million iPhones and 4.
They also seem to have failed to realize that Apple not only ramped up its sales of Macs from 0. Today, Apple's decade-ago investments in notebook design, consumer electronics, direct retail, and software development all seem prescient, and clearly paid off very well.
In contrast, the company's efforts in servers haven't done very much at all, largely because Apple's core competencies in managing user experience don't translate well into the business of selling server hardware.
Other companies do a much better job of selling server hardware, with service and support options Apple can't or doesn't care to match. Somewhat ironically, Apple differentiated its server products largely by being inexpensive, such as using consumer grade SATA drives rather than more expensive, enterprise-tier SAS drives. The enterprise market is less cost sensitive, so in most cases they preferred better service over cheaper components. That's the complete opposite of what Apple is criticized for in the PC market, where rivals brand Apple as too fancy and too expensive and too focused on personalized service.
In the market the Xserve was attempting to address rack mounted servers , nobody cares too much about how the equipment looks or how attractive the server software it run is. Most servers in such an environment are managed remotely and collectively rather than being navigated using a standard desktop GUI. Xserve hardware briefly held a unique advantage in delivering better performance per watt compared to Intel's Pentium 4 servers, but that edge offered by PowerPC CPUs was erased both by Apple's transition to Intel and Intel's own leaps in providing much more performance and efficiency in its high end CPUs.
At this point, the only advantage offered by Xserve hardware is Apple brand affinity, something that is rarely expressed in corporate server closets. At the same time, Apple has made both its Mac OS X desktop clients and its new mobile iOS devices much better at accessing enterprise file, messaging, and VPN services, limiting the need for an Apple-branded server just to sell Macs.
Additionally, Apple is no longer trying to sneak into the enterprise market via the server room; today, it's being welcomed in the front door as a mobile device vendor. Continuing to focus on Xserve development because of a decision to sell Apple branded servers would be foolish given how much has changed since. Apple can drop the Xserve and continue to sell its Mac OS X Server product on its Mac Pro and Mac mini, meaning very little lost revenue but much lower development costs.
It's often been said that Apple was the biggest client of the Xserve. The company doesn't break Xserve sales out of its "desktop" figures, but it's clear the number wasn't very high. This year, slightly more than half of all Mac sales were desktops rather than portables. The majority of those machines were iMacs and to a lesser extent, Mac minis. The Mac Pro is a relatively small market, and the Xserve is even tinier.
Apple does not use mass quantities of Xserves to run its own business; the online Apple Store and iTunes once ran on Apple servers, but the backend of MobileMe is Solaris hardware. The company's new server operations in North Carolina certainly do not use Xserve hardware. The SproutCore front-end Apple used to build MobileMe is based upon web standards capable of running on any server platform, and the same goes for Gianduia frameworks used to build Apple Store web apps and the WebObjects app servers used to run iTunes, the App Store, and the online Apple Store.
Outside of Apple, there were some interesting appellations of the Xserve. The company flirted with the hospitality industry in using Macs to serve on demand video to clients in hotel rooms and cruise ship cabins, all powered by racks of Xserves.
Replacing these with Mac Pros would be rather difficult. Other users in conventional IT departments also deployed Xserves as an easy way to add Apple's own brand of network services to their existing server infrastructure. However, while there is enough annoyance with Apple's discontinuation of the Xserve to sponsor a website petition , there does not appear to be enough of a market for Apple to continue to address with its own hardware.
Apple does however have the capability to relax its Mac OS X Server licensing to allow partners to install it on third party hardware, which would be a bigger win at lower costs for the company than continuing to develop unique hardware at a loss. On page 2 of 3: Another App Store, delegating server hardware. By setting up a secure market for server applications, Apple could bring its successful experiment in creating a market for mobile software to the server realm.
Rather than being a break-even operation designed to sell millions of mobile devices, Apple could create a moderate software profit center designed to sell more Mac Pros and minis, and partner with third parties to sell Intel hardware running Mac OS X Server.
Such a store would be straightforward to integrate into Apple's Server Admin tool, which is already designed to manage software updates and configure installed server software modules across multiple servers shown below. Lots of open source server software already exists, but faces difficult problems related to installation, maintenance and updating for security. By converting this software into easy to manage modules that are easy to buy and install, Apple could revolutionize server software, making it easy and affordable enough for individuals to mange their small office or home business server.
It would also be easy to scale software modules for different licensing tiers, offering a low cost entry point and more powerful options targeted at companies that can afford to pay for them. Rather than bundling all of the company's server related projects into a general purpose Mac OS X Server package, Apple could sell its Wiki Server, Podcast Producer and Xgrid as installable modules that mostly configure themselves.
It could sell Final Cut Server as a module. It could sell WebObjects as a module. It could partner with open source projects like Asterisk which turns a server into a PBX to run an office's phone services to deliver easy to install and use services on top of Mac OS X Server.
I'm pretty sure that Apple has far more people working on the design of the iPhone 6 than they ever had, or will ever likely have, worrying about any product in the enterprise hardware space. And that is why the Xserve had to die.
Take a look at this image of Steve Jobs standing in front of a picture of his new server room thanks to engadget. This isn't to say that there aren't lots of good reasons for this choice; in fact Apple seems to be doing the same thing I do when family and friends ask me about what computer equipment to buy on an infinitely larger scale ; they are buying from the vendor that can provide the best service and requires the least handholding from the customer.
Say what you will about Microsoft, but they have always run their datacenters on their own software and products. When they have used third-party software they were honest about it, as well as their efforts to replace any third-party product they found necessary with their own software.
In the vernacular, they "ate their own dog food. From the point that Apple decided to focus on cloud services and build giant datacenters, Xserve, and realistically, OS X Server, was dead for all but the most rabid fan.
If you can't point to your own gigantic sever infrastructure and point out why your enterprise hardware and software is the best, how would you ever expect to sell it to your customers? Buyers of enterprise technology have been dealing with the smoke and mirrors of the enterprise equipment sales process for almost 50 years.
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