Why is Apple not winning the Server Market?

This has been a lingering question for some time. The MacBooks, the Airs, iMacs and Mac Pros are all gaining market share but why is Apple’s solid OS+hardware combo not doing well in the enterprise and hosting industry?

Just look at the Apple XServe — it’s a monster of a server.

apple xserve

Quad-Core Intel Xeon â€œHarpertownâ€ 5400 3.0GHz
32GB of 800MHz DDR2 ECC FB-DIMM (fully buffered DIMM) memory
Mac OSX Server v10.5 Leopard 64bit
Up to 3 Terabytes SATA HDD storage

In my 6 years doing business in the hosting industry, I haven’t really bumped into a data center which offers Apple XServe.

My curiosity was answered when I visited the Apple website and tried to order a server. Here are some evidence I gathered just by browsing thru their store:

An entry-level Apple XServe starts at $2,999 (Xeon 2.8GHZ, 2GB RAM, 80GB HDD)
The Xserve I pointed out above costs $14,549 (Quad Xeon, 32GB RAM, 3TB HDD)
$999 for AppleCare Service Parts Kit
$999 for Mac OSX Server Maintenance Program
Mac OS X Server Software Support: $5,995 – $19,995
AppleCare Premium Service and Support Plan: $950

Now that’s the killer — you need to pay Apple thousands of dollars more to get support for their hardware and software.

Imagine paying $999 just to have spare parts ready when you can just replace busted RAM chips or HDD for a fraction of a cost.

Imagine paying up to $19,995 just to get consultative telephone and email support for network configuration and administration of Mac OSX Server.

How about $999 just to get regular OS updates? It’s just too darn expensive. Then there’s that discussion on the latest TWiT 158 podcast:

Leo Laporte: “You’d be crazy to run an Apple server. It’s overpriced… what makes it better? I don’t know why you would run an Apple server.”

Jim Louderback (CEO of Revision3, producer of Diggnation): “Don’t get me started on that. We bought an Apple SAN and it’s the worst product ever. And there’s no support, the support is terrible.”

I guess you can’t fool enterprise people into buying your products with witty “Mac Server vs. PC Server” commercials. This is where the Dell, IBM and Microsoft take points off of Apple.

Why is Apple not winning the server market?

High support costs, such as $999 for spare parts and up to $19,995 for software support, make Apple servers uncompetitive.

What is the starting price of an entry-level Apple XServe?

An entry-level Apple XServe starts at $2,999 with a Xeon 2.8GHz processor, 2GB RAM, and an 80GB HDD.

What does the $999 AppleCare Service Parts Kit cover?

The $999 AppleCare Service Parts Kit provides spare parts, but replacing RAM or HDDs individually costs much less.

React to this article:

24 Comments

abeolandres · 16 years ago

Wrote this 2 years ago: if Apple makes superior products, why isn’t Apple winning the server market? http://www.yugatech.com/blog/anything-ap…

hip2b2 · 16 years ago

@abeolandres the server market is a commodity game. Companies don’t buy servers because they are cool :-)

@hip2b2 I thought “the cooler” the server, the better they perform? hehehe

@abeolandres tama! in that sense, yes. But not in the Job’s sense! Haha

ricoz · 16 years ago

@abeolandres because not all their products are superior. Proves that quality is what makes a product sell, not hype.

jeromea · 18 years ago

bottomline is that apple understands the consumer market but not the enterprise/corporate market. they are newbies in that field. this market doesn’t get fooled by steve’s smoke and mirrors…

iceman9 · 18 years ago

uhumm… i wonder what infrastructure does an apple server support? hosting services anyone? can’t beat out the crap of the server price, the roi takes long to recover.. costs incurred…. heheheh

tony · 18 years ago

personally I’d prefer HP server over any apple OS type server

Rolly · 18 years ago

Just want to add another one. When choosing servers for a specific enterprise solution, you don’t usually check the cost of the servers first. It’s the package that you’d look for. For example, one client hosts applications in WebSphere App Servers so it may have been wise to use IBM products. Another client may only need Linux AS servers so Dell Blade servers would suffice.

It does explain why you’d rarely see it in datacenters (I just figured this out) since Mac OS can’t really put a dent into IBM’s server + application package solution, or Dell’s server + desktop/notebook marketshare (most of Manila IT companies have Dell workstations, why not servers?)

Just my 2 cents. I just think Apple isn’t really into this enterprise niche.

I think it depends on what size of the enterprise you’re talking about.

I’ve seen quote sheets from Dell and IBM. Mind you the price can be expensive too. From the cost that you’ve shown though I can’t make a direct comparison.

And by the way, for enterprise servers you can’t just buy busted RAMs from other vendors to replace in your enterprise server. You have to buy them at the vendor and does come at a premium.

I’m not saying Mac Servers are not expensive, I just don’t think your post has enough valid comparative data to say so. I may want to check Twit’s podcast to see how they did the comparison.

By the way, I haven’t seen one datacenter with Xserver’s either and I’m still curious why.