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Peeve Farm
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Brian Tiemann
Silicon Valley-based purveyor of a confusing mixture of Apple punditry and political bile.

btman at grotto11 dot com

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Thursday, April 22, 2004
12:59 - Maybe it's a whole series of flukes
http://www.snappingturtle.net/jmc/tmblog/archives/004242.html

(top) link
Via JMH: TM Lutas has taken note of Apple's corporate strategy, which has borne some very tasty fruit in the consumer space—which many people forget is not Apple's only market.

Apple's recent product entries have pretty much let the cat out of the bag for even the most unobservant that Apple does, in fact, have a business strategy. It's one that they've been executing quite well for some time now. They're trying to get into the server room and the network infrastructure business. Why else would they revise their WiFi base station so you can legally put it in the space above a drop ceiling while not having to plug it into a wall socket for power? They're also releasing software and hardware that undercuts traditional application price points by huge margins in certain vertical markets. Avid is losing huge amounts of business to Final Cut Pro for example.

. . .

Xsan is 100% compatible with (and probably borrows the guts from) ADIC's StorNext File System. This means that anybody who is comfortable with the ADIC solution has to seriously consider Apple's hardware. Because Apple's RAID solution is much cheaper than its competitors, it's reasonable that its going to start cranking out a good deal of demonstration units to test Xsan this winter and start making serious sales come 2005. There are no additional licensing costs beyond the $999 software cost per controller server. And the price savings are sufficiently eye opening that nobody can afford to ignore this entry into the field. Apple's total solutions cost for a SAN is around $30k while similar capacity and performance systems run $150k-$200k. That's aggressive pricing by anybody's standards.

That's the enterprise market pretty well covered, if you ask me—Apple seems to be going after the big-iron crowd with a vengeance, doing things they may have wanted to do forever but were limited simply by a bad legacy OS. Now the sky's the limit; and where Apple is seen as a premium player in the consumer market, they're a budget player in the enterprise market—largely because they can leverage their premium-level consumer products (OS X and application design) to make cut-rate versions of high-end enterprise solutions look a whole helluva lot more attractive.

The Xserve is just one 1U box; granted, it can be outfitted a number of ways, but no matter how the comparative numbers line up, it's hard to convince a buyer that Apple's enterprise product line, with Xserves, Xserve RAIDs, and Xserve Cluster Nodes is the match of, say, Dell with its lineup of server boxes ranging from 1U up to cabinet-sized.

But the server world is a staid, stodgy place. There isn't much in the way of new ideas from the traditional vendors; with the cost of manageability and qualified personnel outstripping the cost of the technology as the enterprise grows, Apple may well have a real story to tell companies looking for a way to spend smarter, not just spend more.

Those two fronts, plus the high-end video processing market, mean Apple is well poised in at least two growth industries—and three, if you take the constant stream of giddy buyers through all the newly opening Apple Stores to be an indicator of a strong consumer sector. I can name a lot of companies off the top of my head that are in a lot worse shape than that.


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