Apple Guards the Secrets of the Server

By John Rizzo  |  Posted 2006-04-27

Apple Guards the Secrets of the Server

Apple Computer is guarding its server plans closely, leaving observers to wonder what will come of the product line.

The Mac manufacturer said on April 5 that it will preview its new Mac OS X 10.5, dubbed Leopard, at its Worldwide Developers Conference in August. But the company has yet to reference a Leopard server edition. Nor has it hinted about any plans it might have to move its Xserve server line to Intel processors from the PowerPC under its June 2005 decree to move from PowerPC chips to Intel processors by June 2007.

Secrecy is Apple. Despite saying it will preview Leopard, Apple has a well-known penchant for keeping the details on its new products under wraps before making grand announcements in front of large audiences. Given the fact that their machines are business-critical, most server makers typically notify customers in advance of any changes to their products. Apple, however, has so far simply stated it would discuss the server line at the WWDC.

So whats Apple to likely to do? If it moves Xserve to Intel processors, Apple could base them on Woodcrest, Intels latest server chip. The dual-core chip, which is likely to run at around 2.6GHz and is said to use up to about 80 watts of power, is being seeded into the market right now and will officially launch in June, Intel has said.

Click here to read more about Intels desktop and server chips.

But even when Apple does its big product announcement productions, the server products get a minimum amount of time on stage, if at all. Sometimes the server announcements are relegated to the back pages of the press packet.

This lack of attention could be a reflection of the revenue stream that the server line generates. "I estimate that Apples server revenue is less than 1 percent of the companys total revenue," said Tim Deal, an analyst at Technology Business Research in Hampton, N.H.

This fact may also explain why Apple pays less attention to updating its server hardware and software than its other products.

Apple recently issued a maintenance release of the Xsan Storage Area Network software. In addition to fixing some bugs, Xsan 1.3 increased functionality by supporting bigger storage systems. It now supports volumes larger than 16 terabytes in size and Fibre Channel LUNs (logical unit numbers) greater than 2TB.

But Version 1.3 is only the third update of Xsan since the software was introduced 18 months ago. By contrast, Apple released six updates to Mac OS X over the past 12 months, not including security updates.

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Apple updates Mac OS X Server with each release of Mac OS X. Apples job is made easier by the use of an assortment of open-source software in its server bundle. Tiger Server includes Samba, OpenSSL, Open LDAP and the open-source Berkeley DB database for use with Open Directory. Tiger Server also has a Weblog server based on Blojsom, an open-source blog server. The Apache Web server is also part of the bundle, as is Apache Tomcat, an environment for Java code to run in cooperation with a Web server.

Much of this software is already available for Intel PCs, so moving it to a future Intel-based Xserve shouldnt be a major hurdle for Apple.

Next Page: The switch to Intel servers.

Page 2

The Switch to Intel Servers

An Intel-based Xserve could also help Apples bottom line.

There is always the danger that, with Intel inside of Xserve, Apples server will be seen as just another machine. However, Deal thinks that Xserve has more going for it than not, even with the new Intel hardware.

"Apples Xserve is not differentiated solely because of its processors," Deal said. "Its design, management applications and cost of ownership provide differentiation from competitor offerings that transcend the type of processor."

Theres also the fact that Xserve is likely to be the only server to offer Mac OS X. As with its desktop machines, Apple is unlikely to license its operating system to run on non-Apple servers.

Instead of putting up barriers, "I believe that the integration of Intel processors into Apples server line will help to remove some objections IT managers may have in purchasing server products from Apple," Deal said. "I think it will contribute to the Xserves value proposition."

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Apples transition to Intel has been successful, to date. Apple shipped the Intel-powered iMac and the MacBook Pro during the quarter ending April 1. This turned out to be Apples second best quarter, with over 1 million Macs sold, a 4 percent gain over the first quarter of 2005.

Whatever Apple is or isnt planning, its airtight grip on security has so far prevented anything from leaking out. Apple watchers expect that the company will make any announcements about its server products at the WWDC, and not before.

The lack of a long road map might be one reason Apple hasnt captured a major chunk of the server market. Hewlett-Packard, Dell and IBM make up more than 60 percent of the market, researchers say, leaving Apple to fight it out with others for the remainder.

But Deal doesnt believe Apple is just aiming at market share. He says that Apple is in the server business to make sure its vertical-market customers have everything they need.

"I have often speculated that Apple would ditch the Xserve line," said Deal. "There is much debate as to whether Apple ever needed a line of servers. However, customers within specific vertical markets such as media and design, science and research, and education have demonstrated some interest in Apples server line and will likely continue to beyond the Intel switch."

But dont wait for the server line to garner the same oohs and aahs as Apples iPods and MacBook Pro notebooks.

"Having a server line allows Apple to meet additional customer needs. However, I would not say that it is a significant part of Apples product road map moving forward," Deal said.

Apple declined to comment on this story.

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