Does HPC and SMB Penetration Preclude the Enterprise?
Despite the Xserve’s relative newness, it has gained a foothold in some niche spaces, including high performance computing (HPC). One noteworthy example is the world’s third-fastest super computer, which is found at Virginia Tech. It is currently being upgraded from PowerMac towers to Xserve G5s.
According to Illuminata Senior Analyst Gordon Haff, Xserve suits the HPC market for several reasons. First, “Whether the G5 is really the fastest processor or not, it’s certainly a very fast one.” Second, “HPC environments are often less wed to a particular processor or a particular vendor, and they’re willing to try new and different [ones] if they deliver a certain advantage.”
Haff also sees Apple servers as a tight fit with small-fry operations. “Ease of use is such a high priority concern in an SMB, where there often really isn’t much in the way of trained IT staff,” he said, “and that’s certainly a very historic Apple strength.”
However, Haff is skeptical of Xserve’s chances with conservative enterprises. “It’s a tough sell in data centers,” he said, “simply because dual processor servers have a certain level of commoditization these days, and, in general, enterprises are cutting back on the number of platforms that they support.” But IBM’s recent push behind its POWER processors could bode well. “To the degree that POWER really becomes a more mainstream architecture,” Haff said, “it’s possible that Apple could look even more mainstream.”
While Big Blue’s POWER development push may bolster Xserve’s mass appeal, matching that demand will be a critical issue. The Xserve G5 shipped late, due to POWER supply deficits from IBM, Apple representatives apologetically told analysts during the vendor’s second quarter 2004 earnings call last week.
Apple is counting on IBM to bring its POWER reserves up to optimum levels in the coming quarter. While 29-percent revenue growth year-over-year is a positive sign overall, Apple will undoubtedly endeavor to bring a modest 5 percent increase in CPU-based sales into line with whopping 909 percent iPod growth.
Although the Xserve is unlikely to inspire the next Hula-Hoop-like iPod craze, the Windows NT 4 migration conundrum many IS organizations face may boost its chances with enterprises that haven’t been historically prone to “Think Different.” Brooks touted Panther’s $999 unlimited client license and open standards, which may appeal to some admins who are running cost comparisons with Microsoft’s new license model and must also factor in upgrading all hardware and software to Windows 2003 specs as well as an Active Directory deployment.
But if Apple and IBM achieve a higher profile with their POWER products, will their partnership show wear? Jesse Stein, PowerPC marketing programs manager for IBM, didn’t see a conflict of interest here, “IBM provides semiconductor technology for many companies; many of those companies’ [products] also compete against IBM-branded products.”
“While IBM cannot comment on unannounced products (either our own or especially those of our clients),” Stein continued, “I think it is safe to say IBM and Apple have a great collaborative relationship and that both companies’ products should be positively impacted by this.”
In addition to speed and elegant hardware design, Apple’s server products also receive its ease-of-use premium, while remaining quite sophisticated. Panther’s Software Update feature, which can be flexibly scheduled to automatically download and install updates, is but one example. “We tout how easy it is to use to manage our system,” but that doesn’t diminish the role of a savvy system admin, Brooks said. “It really lets them focus on providing value added services to their organization, not just babysitting servers.”