Apple's server revenue market share was just one-tenth of one percent in the third quarter of 2008, with revenue of US$13 million on 7,403 server shipments, according to Gartner data. Apple's number of shipments was higher than in 2007 but revenue still dropped slightly.
Apple recently lured server expert Mark Papermaster away from IBM, where he had worked for 26 years and was the company's top official working on Power microprocessors and the vice president of IBM's blade server development unit.
IBM sued Apple to block it from hiring Papermaster, saying he had signed a noncompetition agreement and that Apple competes against IBM in developing servers, PCs and microprocessors.
The case is still working its way through court, but Apple says it hired Papermaster not to help it develop better servers but to lead engineering for iPods and iPhones. Apple may want to tap Papermaster's market and partnering expertise to broaden the reach of the iPhone further into the enterprise, says Gartner analyst Jeffrey Hewitt.
In terms of servers, Apple has made multiple attempts over the years to penetrate that market with limited success, says Forrester analyst James Staten. The servers are attractive for needs such as video and photo editing and publishing, and video game development, he says. IT folks who already use Mac desktops sometimes want a "Mac-like server" that's easy to use and install, Hewitt adds.
But while Apple servers are competitive in terms of horsepower they don't meet typical enterprise standards, according to Staten, who notes a lack of integration with remote management tools that make it easier to identify failures and potential fixes.
It's a big leap to assume an Apple would be able to become a Tier 1 server provider," he says.