Apple Hopes Server Will Attract New Users

But many remain skeptical of Xserve despite Unix-based OS, high performance and low price.

Apple Computer Inc. will soon start shipping its first rack-mounted server to Macintosh customers, and it hopes the Unix-based Xserve system will win over skeptical enterprise users who have avoided the company.

But despite the dual-processor Xserves impressive features and the stability of the Unix-based OS X operating system, several corporate IT managers said the products lack of standard hardware components and software will likely prompt them to shop elsewhere.

"Would I be biased against Apple? Yes, to be honest, I would," said Brian Potts, network manager for Associated Food Stores Inc., in Salt Lake City. "Were always willing to look at competitive products, but we have a tendency to go with established players, such as Dell [Computer Corp.], Hewlett-Packard [Co.], IBM and Unisys [Corp.]. You want a company that you know will be there tomorrow and that has a solid history of service and support."

A Unix reseller agreed that Apple, of Cupertino, Calif., faces an uphill battle.

"Theyve arrived pretty late in the game," said John Sheaffer, CEO of Sysix Cos., in Westmont, Ill., which sells Unix-based systems from HP, IBM and Sun Microsystems Inc. "Its a very tough channel to compete in. And while Im sure the Apple brand may prove attractive to their existing customers, its not highly regarded among business customers."

At first glance, the Xserve, unveiled in May and set to ship this month, appears to offer high performance at a relatively low price. Pricing for single-CPU configurations starts at $2,999. Dual CPUs will cost $3,999.

The Xserves thin, 1.75-inch-high chassis is also the most-popular-selling rack-mount design. Despite its small size, the server can pack a punch, handling up to two 1GHz PowerPC G4 processors. And while benchmarks detailing the systems capabilities have yet to be released, analysts dont doubt the Xserve can outperform server offerings of more established server makers.

"This system has a lot to offer at a price most competitors cant touch," said Peter Glaskowski, an analyst with In-Stat/MDR, in Sunnyvale, Calif. "Any enterprise that has Mac clients is going to find this unusually attractive."

The Xserve also comes with an unlimited-client license for its Unix-based OS X operating system, offering customers a potential savings of thousands of dollars per rack of servers when compared with fees tied to Microsoft Corp.s Windows.

But analysts say the Xserves strong performance capabilities, attractive licensing fee and Unix-based operating system will not be enough to lure enterprise customers.

"While the Xserve does have quite a bit to offer, its not likely to have enough of a price/performance advantage to displace entrenched players like Sun, IBM, HP and Dell," said Rob Enderle, an analyst with Giga Information Group Inc., in San Jose, Calif.

In addition, Apples Xserve lacks some features that enterprise customers expect. For example, the Xserve utilizes ATA hard drives, rather than SCSI drives, which are considered faster and more stable and are commonly found in business-critical servers. The initial version of the Xserve also lacks some hot-swappable components, such as fans, as well as redundant power supplies.