This has been written about by some good folks:
- A Eulogy for the Xserve: May It Rack in Peace (By Chuck Goolsbee, via TidBITS.)
- On the Xserve thing... (By John Welch (Bynkii), with a link to his full MacWorld article.)
Apple's target market is the end user. Overwhelmingly.
As such, the server market has always been a straddle of the world of the end user and that of the IT department - though clearly there are still some markets where an Apple server is a great fit, such as organizations where there is no IT department.
However, the target for the Xserve in particular has moved - in large part, to the cloud (such as AWS (Amazon Web Services).
And the cloud is built, in large part, with commodity hardware - not Apple's business at all. The cloud is much less about serious high-quality equipment, as it is about lots of cheap stuff that is configured so that failure is fully expected; just toss it (while something else automatically takes over its load) and slot in another.
That's the hardware side, which is all Apple plans to drop (in January).
On to software:
Apple explicitly will continue to develop Mac OS X Server and will continue to develop some server configs based on its other CPUs; a Mac mini with Mac OS X Server is a very nice server - and fits Apple's target market much better. It's no Xserve - and many of us have no need for all the Xserve does -- nor any need to pay for it.
Though this transition will cause some pain for those of us who find great utility in the Xserve, this is a great move for Apple and aligns its resources where they fit best.
Oh - and by the way, here's a left-field idea:
Apple is in a far stronger position now, than when it first started selling Mac OS X Server. At which time, tightly tying it to Apple's hardware made great sense. And Apple's very firm policy (full price) on licensing even virtualized instances of Mac OS X Server, while rather painful, made a certain amount of sense too.
Now? The landscape is significantly different. The business case can be much more solidly made, that Apple could license Mac OS X Server on commodity hardware - including in the cloud.
A stretch, yes. But within reach.
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