Alex Grossman, Apples director of server hardware, said "this has been a fantastic year" for Xserve sales, adding that he has seen "growth in all traditional areas" such as creative and SMB sales. He noted that Gartners estimates were low, though he also pointed to how supplies of the Xserve G5 were constrained well into Apples third quarter of 2004. Apples third financial quarter coincides with the second calendar quarter of the year; Gartners report marks quarters by the calendar year. Apples revenue and profits soared in its most recent quarter. Click here to read more.When asked how Apple is trying to move into the enterprise market, Grossman said, "All those customers [digital media, graphic design, SMB] are enterprise customers to some degree."We start with the marketing or other department in a corporation and move up from there," Grossman said. He noted that most large companies, even if they run their infrastructure on Unix and business desktops on Windows, use some Macintoshes for file serving or mail serving. He said that the "edge server" market, which he defined as all servers costing under $25,000, is booming, and said that the Xserve has a high profile in that category. When asked how Apple plans to work with ISVs and resellers, Grossman said, "Were happy with the acceptance weve seen for Xserves in the ISV community, especially compared to where we started in 2002" when the first Xserve model, the Xserve G4, was introduced. As for how Apple plans to further acceptance of the Xserve, Grossman said Apple is expanding its advertising "across the board," using an internal sales force targeted with resellers and pressing against Windows servers on the point of total cost of ownership and against Linux- and Unix-based servers on the point of ease of configuration and management. The Xserve RAID, Apples rack-mountable RAID unit, is often a "good gateway" for getting Apple products in the door, Grossman said. Many companies that have no Mac OS-based computers have been buying the Xserve RAID, which works with all platforms, and then deciding to supplement the storage units with Xserves, he said. Although Grossman admits that the Xserve will never compete against the "big iron," Gartners McLaughlin said that "Apple is re-establishing itself as a server vendor." "What they choose to do with it is still up for research," he added. Check out eWEEK.coms for the latest news, reviews and analysis about Apple in the enterprise.