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The concept of Mac servers floating out of Apple is not new at all. Apple has sold G3 and G4 systems bundled with custom server software, beefed up hard drives, and faster network connectivity for quite some time. Before that, Apple offered standard models in a server configuration, only modifying a few specifications in the process. They even went as far as designing a massive "network server" solution in the mid-90s. However, it would be accurate to sum up the response to Apple's server efforts until now as, "yeah, whatever."
You're probably thinking, "So what's great about Xserve? It sure sounds like another joke of a server from Apple." Well, you're dead wrong.
Apple changed four main things about their server product. Cumulatively, one killer server was born. The Xserve is the quintessence of Steve Jobs' unyielding perfectionism. Unlike its bastard predecessors, the Xserve is taking the industry by storm. Here is why:
Apple has brewed up a killer flavor of an Open Source Unix core, appropriately named "Darwin." When paired with the world's most popular Web server, Apache, and Apple's stunning proprietary Aqua interface, a surefire winner was created: Mac OS X Server.
In the past, Apple had used a standard Mac OS and additional software to turn it into a so-called server operating system. Although it did work, many features of a robust server operating system were absent. Therefore, AppleShare IP and other Mac OS-based server solutions were scarcely used outside of Macintosh networks.
With the implementation of a Unix-core, Apple opened an unfathomable number of doors. Not only could Mac networks be served, but also Windows and Unix networks. A countless number of Unix server software suites could easily be ported to run on Apple's OS.
Additionally, remote server administration and access via command line was now available. By starting out the new breed of server software with Open Source Unix, Apple declared they want to be a serious contender.
People become extremely biased towards a product simply based on looks. Apple's previous servers, with exclusion of the Network Server line, were essentially desktop and minitower Mac systems - visible evidence to the average server shopper identified anything "Mac" as a personal computer.

With Xserve, Apple has finally made a product that fits into a standard server rack. The importance of that fact means that Apple's product can be installed easily into datacenters that have existing server racks. Racks are extensively used nowadays to keep hardware organized and stored in a secure and space-saving fashion. Without rackmountability, Apple's server product would get nowhere in professional datacenters.
Apple has always been associated with sexy looking products and raw power under the hood. However, an extra push would be needed to elevate the personal Mac system architecture into something good enough to be competitive with other server hardware. Apple did just that with the Xserve by boosting the system bus speed and introducing DDR memory to the Mac. With dual G4 processors running on a faster bus and supercharged memory, Apple's hardware design is capable of blowing away the competition.
The critical make or break point of every purchase comes down to price. No matter how good Apple's server product is, it won't take off without a decent price.
Apple definitely scored extra points with product pricing. As far as servers of this class go, Apple's Xserve is very competitively priced. Many Intel-based units performing significantly poorer are priced as much as twice that of the Xserve. I even recently read of an IT administrator gushing about how he could get "two of these babies for the price of one Intel."
Apple has failed before at the pricing game, but they sure nailed it this time. Let's hope the momentum continues.
Now as Apple is being considered a major contender in the server arena, their product is undeniably at the top of its league. The essential points of a good operating system, innovative hardware, excellent performance, and a good price make it a big winner.
Apple has always changed the way we think; now they're changing the way others think about serving.
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