Apple (Nasdaq: AAPL) 
brought its Xserve rack-optimized server line to market in 2002, making a second attempt at launching a server-side hardware solution channel.
Apple's first foray into the server market in 1997 was less than stellar via its Network Server running AIX. However, with the emergence of the OS X operating system and more recent adoption of the G5 PowerPC processor from IBM (NYSE: IBM) , this presents strong arguments for its adoption now.
In a year overshadowed by its own success in the digital entertainment atmosphere, Apple continues to quietly gain traction in the enterprise sector. It enjoyed double-digit growth in server sales according to mid-year reports from the company (Apple does not break out Xserve sales from its Powermac category in financial reports).
While the numbers (north of 11,000 per quarter) are only a fraction of the sales figures boasted by HP (NYSE: HPQ) 
or Dell (Nasdaq: DELL) , they do reflect a profit in the balance sheets as Xserve draws interest from corridors outside Apple's traditional niches in the academic, government, and scientific sectors.
Building Credibility
Gordon Haff, senior analyst with Illuminata believes the Xserve has benefited from the mainstreaming of high-performance computing.
"The Xserve has been doing quite well, especially given that it really remains outside of Apple's primary strategic focus, which is much more about consumer electronics and the digital home than more traditional computing," Haff told MacNewsWorld.
Amid the buzz caused by the company's successful entrance into high performance computing and the Top500 Supercomputer list, Apple engineers have also turned out a serious platform alternative to Intel (Nasdaq: INTC) .
This has translated to a solution form-fitted for tasks like file and print services, Web application hosting and mail services. However, this was not done without consideration of the share of Intel servers in use.
Through a mixture of ease-of-use conveniences like shipping with rack rails, which competitors often do not provide, as well as the integration-friendly nature of OS X Panther Server, the appeal to IT managers becomes clear. This creates the ability to minimize required resources and limit service disruption during deployment into production environments.
Intel Cost Comparison
Recent IDC research shows that more than half of Linux server deployments are dual processor-based for the heavier application loads being carried by more commoditized hardware. A glance at specifications shows the heated competition the Xserve uses against its peers.
When the Apple Xserve was compared against similarly configured systems from Dell, HP and IBM (excepting processor architecture) -- it matched or beat the trio on price.
| Specs | Apple Xserve G5 | Dell PowerEdge 1850 | HP Proliant DL360 | IBM xSeries 335 |
|---|---|---|---|---|
| Processor | Dual 2GHz PowerPC G5 | Dual 3.2GHz XEON | Dual 3.0GHz XEON | Dual 3.06 GHZ XEON |
| Cache | 512K L2 per processor | 1 MB per processor | 1 MB per processor | 512K L2 per processor |
| System Bus (processor) | 1GHZ | 800MHz | 533MHz | 533MHz |
| RAM | 1 GB | 1 GB | 1 GB | 1 GB |
| Hard Drive(s) | 2 x 80GB Hot Pluggable Serial ATA(SATA) | 146 GB 10K RPM SCSI | 2 x 80GB non-Hot Pluggable SATA | 2 x 73.4 GB 10K RPM SCSI (Hot Pluggable) |
| RAID | None | None | None | RAID 1 (mirroring) |
| Optical Drive | CD-ROM | CD-ROM | CD-ROM | CD-ROM |
| Network | Dual Gigabit Ethernet | Dual Gigabit Ethernet | Dual Gigabit Ethernet | Dual Gigabit Ethernet |
| Warranty/Support | 3 years, 24x7 plus onsite in 4 hours | 3 years, 24x7 plus onsite in 4 hours | 3 years, 24x7 plus onsite in 4 hours | 3 years, 24x7 plus onsite in 4 hours |
| Rack Size | 1U | 1U | 1U | 1U |
| Extensibility | Runs Apple OS X, Yellow Dog Linux | Runs Windows, Linux | Runs Windows, Linux | Runs Windows, Linux |
| Cost ($US)* | 4199.00 | 3831.00 | 4304.00 | 4449.00 |
Path to Xserve Scalability
By also providing a hardware and software growth roadmap the enterprise can follow into more substantial deployments such as for clustering and storage management, Apple expands the reach and lifespan of this product line.
These more complex projects are addressed in part with the Xserve RAID, which can now provide up to 5.6 terabytes of storage per system. Though the prices are more premium -- ranging from $6,000 to $15,000 -- they continue to undercut the price of similar solutions on other platforms.
Growth Potential
Between its burgeoning relationship with open source and a strong parallel to Linux, the Xserve has a vast application database to tap as well as potential long life.
However, Illuminata's Haff advised foretelling Apple's server-side future is speculative at best right now.
"Certainly, IBM is pushing Linux on PowerPC. Mainstream success by IBM in that endeavor could lead to either a partnership with Apple or to Apple rolling out a Linux offering on its own," Haff added.
But he doesn't see a Linux Xserve as something Apple will do in the near term with so much of Apple's value being wrapped up in the integration of its hardware and software combo.
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