Thursday
May152008

The Business case for Virtual OS X Server

I wrote the article “Apple in the enterprise” partially based on the rather off the cuff idea of OS X Server being sold for virtual only sales. I’ve been mulling that thought over for last little while and the more I think about it, the more interesting it becomes.

First off, you have to remember that I’m coming from a high end virtualisation perspective where I work with medium and large businesses that are in the process of moving to virtualisation solution in order to take advantage of the ability to consolidate many servers onto fewer physical machines, abstract each machine into a few files in order to simplify backups, disaster recovery and business continuity. There are a few of very mature products on the market, most notably VMware ESX and Xen.

I’ve had the opportunity to work with a number of clients that also use Macs and OS X Server in their environments and for the IT administrators, these machines are starting to pose some issues since they are now different from all of the rest. Currently, you can safely (read supported) virtualise Windows Server in all flavours from NT up to 2008, various Linux Server distributions, and even Solaris x86.

xServes were different from the others in the near past since they were more of a UNIX machine with it’s own chipset and you could categorize them with the Solaris SPARC and AIX PPC based machines. But now that xServes are Intel boxes like all of the rest of the Apple line-up, they start looking more and more like a generic 1U Intel server to the average IT administrator.

If that administrator is in the process of consolidating all of his existing x86 workloads into a virtual environment, they start asking why are these machines special? Fundamentally, they aren’t.

Under the current sales model for OS X Server you have two options: either you get it ‘free’ when purchasing an xServe or you can purchase the retail version in a 10 client ($599) or unlimited client ($999) version. Currently I would suspect that the vast majority of retail OS X Server sales go to previously installed xServes since Apple has stuck to its no upgrade license policy so to move from major version to major version, you pay full retail for the latest and greatest. Now nothing is preventing you from purchasing OS X Server and running it on just about any Mac that meets the minimum hardware requirements which aren’t difficult to meet, but I don’t think that market is terribly large. I could be wrong, but up until now I have yet to run across OS X Server on a client site that’s not already running on an xServe.

Side note: OS X Server runs perfectly acceptably on any modern iMac, even a MacBook will do in a pinch of you’re not running a big file server with loads of hosted home directories.

Now the other aspect of Apple hardware is that it tends to have a longer useful life-cycle in the enterprise. So over time this would mean that there is a substantial park of installed xServes which are getting OS upgrades more often than they are getting replaced. From this I would deduce that OS X Server generates more revenue in software sales than in hardware sales. This is the exact reverse of Apple’s current model on the desktop, where the ‘free’ OS sells hardware.

When we return to the purchasing patterns, it would seem that the bulk of OS X Server sales are to people that already have an xServe so Apple’s no longer getting any hardware sales revenue. For those odd folks who install it on something else, it’s likely going onto an existing machine. So at the most basic level, OS X Server retail sales are not generating a lot of hardware revenue in the same way that OS X on the desktop sells MacBooks and iMacs.

Clearly Apple has an interest in maintaining the xServe platform since it generates software revenue over time. That said, any OS X Server sale should result in future software revenue as users upgrade to ensure that the latest version can efficiently manage the latest version of OS X running on their desktop machines.

Virtualisation is changing the server marketplace in a huge way these days. IT Directors are looking at technical audits that show them that the bulk of their servers are only using a fraction of the computing power at their disposition, and that consolidation ratios of 10, 20 and even 40 to 1 are feasible with massive savings realised in energy, space, cooling and maintenance contracts. Many of the sites that I visit are putting into place policies that require justification for the purchase of a physical server for a given task. Virtual machines are becoming the norm in the server space. When OS X Server is proposed to take advantage of the collaboration services, unlimited mail and calendar server accounts it looks good up until they see that they need to buy an xServe. The reply is often “can’t we do this with Sharepoint?” or “There are a ton of wiki server solutions for Linux”. While none of these approaches come close to the ease of implementation, maintenance and use of the Apple solutions, they will likely win out over any solution requiring specific hardware.

On top of that, the IT Direction wants to tout how well his virtualisation solution was able to absorb all of the applications used by the company so selling xServes becomes a very very hard sell.

With Leopard Server, Apple does offer the ability to virtualise OS X Server in the EULA. The current problem is that there isn’t a product on the marketplace that can do so reliably and in a supported fashion. (I haven’t taken a poke at the Fusion 2.0 beta that they demo’d with OS X Server at the last MacWorld so that might be hidden in there). Then there is the issue that Apple stipulates that you can only run said virtual machine on Apple hardware and quite honestly, if you’re serious about large scale virtualisation, nothing that runs on the Apple platform is up to snuff. Fusion and Parallels are decent enough for small environments and simple consolidation, but lack the mature connectivity options of virtual switches, VLAN management, embedded iSCSI and Fiber Channel multipathing, live transfer of running machines to other physical hosts etc. Parallels Server is moving in this direction, but currently it’s still stuck in the single server silo mode for the moment.

If we treat OS X Server as a software only product that has little benefit to running on Apple hardware then selling a version of OS X Server designed specifically for running on VMware ESX or Xen makes sense. Apple has practically zero engineering investment since the virtual hardware platforms are normalised and don’t change very often. This is not at all like running OS X on a generic PC with god-knows-what for a SATA controller and video card. This is just like an Apple hardware platform: very limited numbers of configuration options all with standardized hardware components.

Each sale of OS X Server that goes into an enterprise is very likely to result in ongoing upgrade revenue as the tools become integrated in the enterprise workflow.

All of that said there are a few investments that Apple needs to do in order to make this work. Number one is they need a switchers guide for IT Administrators. Some serious work needs to be done on the documentation and training side of the house, much the same way as was done at the consumer level. Other things that need to be pushed out are documents on how to integrate OS X Server into Active Directory in order to leverage the existing infrastructure to use the applications built-into OS X Server, specifically the collaboration tools, and then the messaging and calendar services.

This has already started. I’ve noticed that there are now some videos on getting started with Leopard server up on the Apple site. This is a good thing. However, every IT guy I know wants, no needs, to touch and see for him/herself how this stuff works. In order to get this product into a company, people will need to test drive it themselves in their own environment to see how it fits. The show and tell approach is perfect for iPhones and iPhoto, but when you’re planning on adding a server to your infrastructure, you need a little bit more hands-on experience.

I’m seeing better acceptance for Linux these days in many sites since people can quickly and easily take it for a spin in a virtual machine and poke at it. There’s no investment required. The virtual server hosting platform is already in place so trying out something new doesn’t even require plugging in an extra monitor or keyboard. Installing an OS into a virtual machine from an ISO image is often significantly faster than installing on a physical machine. The idea of trying new stuff out is starting to really take hold in these environments, especially since the barrier to test is so incredibly low now.

The ideal solution that I can see would be to offer an trial OS X Server appliance in the ovf format. You download the image that then request a trial key from Apple. Apple gets some idea of the potential marketplace before making the definitive step to selling the product. And in the meantime they generate some buzz around the product.

Apple lowered the corporate risk for purchasing Macs with Boot Camp. “If I’m not happy, I’ll just install Windows”. Positioning an OS X Server virtual appliance as the perfect collaboration tool for workgroups (even in an Active Directory environment) would be the perfect way for Apple to take a playing card from Microsoft’s book and embrace and extend.

Personally, I think that unless Apple gets seriously into adopting the coming server virtualisation trend, they’ll be missing a great opportunity. They have all the necessary pieces in place to make this work.

Additional note: Currently the best way to integrate UNIX systems of all flavours into an Active Directory environment is Centrify’s Direct Control software. But a server licence for Linux costs as much as OS X Server so if you’re interested in offering additional services based on standards and a better management experience for the Macs that are starting to arrive in your enterprise OS X Server is an excellent investment.

Wednesday
May142008

Mac Mini Dead?

Can we get over this one? I keep running into more and more articles bemoaning the imminent demise of the Mac Mini. This is getting tired, especially since there's absolutely no reason to kill the Mini. Why not? In it's current incarnation, it's just about perfect. Now it's not necessarily the machine for everyone, but you have to remember what market niche it plays in, hint: it's not the bargain basement-entry level competitor. If that were the market, the Mini would not be tiny, silent and made out of notebook components. The Mini is in the imagination market. It's small enough that you can squeeze it into a car stereo mount, the design permits you to leave it in plain sight in the living room without embarrassment, and all of these places without making any noise.

Something to look at if you think that the Mini is going to be end of lifed, is to look at its competition. There are two current niches where the Mini plays well: the silent PC market and the HTPC (Home Theater PC) market - and there's a lot of overlap in there. The silent PC market is made up of DIY fanatics who will select each component of their machine one by one and build a custom machine that's probably in the minitower size, or the custom PC media PC market where the object is something that resembles a high-end audio component. The two major players that have solutions close to the Mini that I've been able to find are AOpen and Hush.

Good luck finding an AOpen reseller in Europe. I've done the tour of the online resellers in France with none of them run an online store. I did manage to find one in the US with an online store though (myAOpen.com/) where I ran the configurator to something roughly equivalent to the entry level Mac Mini and came up around $830 USD. The Hush machines are targeted directly at the media PC market that you want to put into your living room. However, like the AOpen, they're stupid expensive. The HUSH™ E1-Mini is a nice little PC tricked out for media work, but about four times the volume of the Mini and current sells for 825 pounds. (yikes! I just looked closer and it's 969 with the VAT). The basic entry level machine in this chassis is the Hush B1 Mini ITX PC which goes for 487 pounds. Prices from http://www.mini-itx.com/store A quick tour of the Apple UK store shows the Mac Mini starting at 399 pounds, incl VAT.

When you look at it from this vantage point, the Mini is nicely positioned for this specific market niche. Remember that Apple has never oriented itself to the mass market. It's going there slowly, but not whole hog - it's managing the margins well by keeping to the profitable segments of the market and avoiding the morass of the lowest common denominator where each sale must be subsidized by various spyware bundles to make them viable and still end up costing the seller in high support costs.

The one thing that would push Apple to replace the Mini would be the same reason they replaced the iPod Mini with the iPod Nano. They've designed a better one before anyone else in the market has caught up with their old one. However, there's nothing that would bring any massive new benefits to the Mini without adding more cost for dubious benefit. Apple could replace the internal drive with solid state memory, but at best this might shave 5-6mm off the height for massive additional cost. The only thing that I can see Apple changing about the Mini is to plunge into a stackable design. By expanding on that philosophy and separating the components into a series of stackable platters connected by a vertical PCI bus they could keep the form and spirit and step out ahead of the competition again. This would bring expandability to the "low-end" of the Apple market, but at some additional risk.

Expansion means multiple new items to stock, new SKUs to manage and keep track of in the supply chain, which is a non-trivial exercise. You don't jump in to adding products to the mix unless there's a good business case. The stackable, modular idea has been bounced around by various designers over the years, but the closest I've seen to date that really takes the idea and runs with it is Asus. The Asus approach is wireless connectivity between the modules which strikes me as inefficient (in 2008...in 10 years, I suspect that the line between a module and a "PC" will be awfully fuzzy). Another example that looks interesting, but doesn't go as far as I would go (remembering Steve Jobs' hatred for cables...).

One example and another that are pretty much in line with where I think they could be heading. Something worth noting is that Apple is again playing the design leader in this market space. Look around at the number of add-on peripherals specifically designed to mate and stack with the Mini, from Apple's own Airport Extreme base station, various usb and firewire hubs, and hard disks galore. I would say that this indicates a robust Mini user base that continues to grow in order to justify this level of interest in by aftermarket manufacturers. The Mac Mini is far from dead and if it disappears, it will certainly be replaced with something even more interesting...

Update to add link to a followup article

Tuesday
May132008

Re: TheDigitalLifestyle.tv: Why buy .Mac these days?

TheDigitalLifestyle.tv: Why buy .Mac these days?: "Sync & Backup: These two features almost don’t deserve any attention. Backup has been replaced by Time Machine or just an external HD. Sync is not worth any part of the $99 price tag and thus deserves none of our attention or yours."

(Via TheDigitalLifestyle.tv.)

That's funny. I find the sync features the most compelling reason to purchase the .mac service. I agree that most of the other basic services of .mac can be easily replicated with free offers from various suppliers. But I disagree vehemently that the sync proposition has no value. As mentioned, I think that it has little value for those who currently only own one mac, but if you have multiple machines or use multiple user accounts, it's irreplaceable.

If my suspicions are correct, then the .mac service will soon have even more value for those people with a Mac and an iPhone, offering over the wire syncing and cutting iTunes out of the loop (except for music and video I would guess). 

Sunday
May112008

iPhone localization and the missing keyboard

I'm following the discussion around the upcoming 2.0 release of the iPhone, combined with the anticipated hardware refresh that will undoubtedly bring 3G to the plate and have noticed that the missing keyboard meme has come back around. I think that (as usual) Gruber covers the major points nicely, but there are a couple of additional things I'd like to address.

The first one has to do with localization. I live in France and communicate in both English and French on a regular basis with my iPhone. I used to have a Blackberry and liked the well integrated email and calendar support although very efficient for email, the calendar left some room for improvement. My major beef is that when you sell an item with a hardware keyboard into a localized market you make a pile of assumptions. Most notably that the user will only ever need to write in the local language. I realize that I'm a bit of a niche market, but I suspect that the higher up the chain you live in Europe the higher the likelihood that you converse in multiple languages and the higher the likelihood that you use a smartphone.

I found the Blackberry keyboard to be pretty nice, although I was coming off a Treo 650 keyboard so the subtle differences kept tripping me up for the first couple of weeks. My major issue was the moment that I needed to start writing in English. The Blackberry would helpfully try to correct my text as if I was writing in French. This brought about much use of colorful language (often not found in the Blackberry dictionary either). I lost count of how many messages I sent with the word "thé"* in place of "the".

On the iPhone you can make multiple keyboards available under Settings > General > International > Keyboards. If you have selected multiple keyboards, an additional key that looks like a globe will appear to the left of the spacebar and tapping it toggles between selected keyboards. With the toggle also comes a change of dictionary for the auto-correction features. For some reason that I don't yet understand, I find that switching between soft keyboard layouts relatively easy whereas switching physical keyboards induces a lot of errors while going through the adjustment/training period. I currently switch multiple times/day between the different layouts depending on the context and have discovered that the one finger tap approach can adjust on the fly once you've mastered the basic technique.

The biggest hurdle of a Treo or Blackberry user has in mastering the iPhone is that you don't keep your fingers in constant contact with the keyboard and use a slide-pressure-slide-pressure technique to typing. You have to get your finger into and out of the detection field. This is where I see Blackberry habitués getting frustrated.

The second point has to do with haptic feedback. I think that there is some really interesting work being done in this space that will change the feeling of using a virtual keyboard. Interestingly, when you google "haptic feedback keyboard" almost all of the links come back with stuff regarding iPhone prototypes (plus a couple for Nokia). Personally, I think that Apple is pursuing this kind of thing more for the gaming applications than for additional ammo to sway current Blackberry users, but hey "two birds, one stone" never hurt.


* French for tea.

Sunday
May112008

Why Dell will not bounce back

Why Dell will not bounce back: "Bottom line is this: the only innovations worth making are the ones involving product ideas and product design. I mean, Duh. Right? It's pretty obvious. What's amazing to me is how few companies actually seem to realize it. To sustain an edge in any market you must make better products than your competitors, consistently, over and over and over again. Just making the same products as everyone else but taking a little friction out of the system can give you an advantage, but only a temporary one."

(Via The Secret Diary of Steve Jobs.)

Bingo. And combined with the current move to virtualisation, I think that all the major PC and Server builders out there are in for a very rough ride in the next 5-10 years. As others have mentioned, the current commodity PC is a race to the bottom, but nobody's mentioned what happens when you hit the bottom.

The other missing piece of this equation is loyalty. If price is the only major differentiator, then there's no reason for me to be a repeat customer. If you offer me something that nobody else is able to offer, then I have a reason to become a repeat customer.