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.

Yugatech 728x90 Reno7 Series

apple xserve

  • Quad-Core Intel Xeon “Harpertown” 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.

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Avatar for Abe Olandres

Abe is the founder and Editor-in-Chief of YugaTech with over 20 years of experience in the technology industry. He is one of the pioneers of blogging in the country and considered by many as the Father of Tech Blogging in the Philippines. He is also a technology consultant, a tech columnist with several national publications, resource speaker and mentor/advisor to several start-up companies.

12 Responses

  1. Avatar for abeolandres abeolandres says:

    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…

    • Avatar for hip2b2 hip2b2 says:

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

    • Avatar for abeolandres abeolandres says:

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

    • Avatar for hip2b2 hip2b2 says:

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

    • Avatar for ricoz ricoz says:

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

  2. Avatar for jeromea jeromea says:

    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…

  3. Avatar for iceman9 iceman9 says:

    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

  4. Avatar for tony tony says:

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

  5. Avatar for Rolly Rolly says:

    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.

  6. Avatar for Rolly Rolly says:

    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.

  7. Avatar for jho2x jho2x says:

    I think apple does not doing well in the enterprise it because of their marketing strategies

  8. Avatar for jho2x jho2x says:

    I think apple does not doing well in the enterprise it because of their marketing strategies/Management….

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