Who Exactly Is Apple Targeting with OS X Lion Server? [Speculation]

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With the release of Mac OS X Lion Apple is changing the way it handles pricing and distribution of Mac OS X Server. Rather than issuing a separate release priced at $499 or more, Server will now be a $49 upgrade to the standard Lion installation, available for download through the Mac App Store.

Who is Apple targeting now with Lion Server, and why?

Previously Server has been targeted at IT Professionals, Corporate (Enterprise) Users, and Small Businesses. In combination with Xserve hardware Apple offered a single-rack-space solution that could be a Directory Controller, DNS controller, multi-protocol fileserver, FTP, email and webserver, etc.. Setup is complex and requires strong IT skills, and the high price has served as a barrier to entry.

The newer Mac Mini Server makes a good basic fileserver, webserver and Time Machine backup disk for workgroups and small businesses. Using Simple Server mode and the Server Setup interface (instead of Server Admin and Workgroup Admin) more complex functions are hidden from users, and it’s easier to configure.

But now the Cloud is all the rage. How many people today want to run their own calendar and contact servers when Google, Yahoo and thousands of other cheap hosted services are available? Apple will even be offering these services themselves for free with iCloud this fall.

For an IT pro, the advantages of Server are declining. Apple’s dedicated server hardware, the Xserve, was discontinued earlier this year, and Server is now offered as an optional install on either the Mac Mini or the Mac Pro. But filesharing, web hosting, etc., are commodity services offered on much cheaper Windows and Linux systems designed as true server hardware.

Perhaps most importantly, Apple’s commitment to supporting Server is not something corporate users and IT Professionals can count on – witness the recent Final Cut Pro X debacle, and the abrupt discontinuation of the Xserve line. Apple feels no need to offer long term commitments of services nor advance notice of product discontinuations to end users. This behavior is not new nor limited to Server and Pro apps, but it significantly affects business and professional users.

So with no dedicated hardware, no pressing need for many of its capabilities, and Lion selling for the low price of $29.99, maybe just selling Server as an inexpensive add-on is the only way to go? For small businesses and savvy Mac users this is a great deal. Sure I’ll add Server to one of my Macs for $49, why not?

Well, that could be a problem. I’ll bet that many of my clients who know “just enough to be dangerous” are also going to pop for the upgrade, folks who wouldn’t have spent $499 earlier. These are people who should not try to configure a server of any kind. They will figure out ways to turn on but only partially configure DNS control or network user management, cut off their internet access, then call me panicked for help getting their Macs working again! I supposed that’s good for business, but not the way I prefer.

From Apple’s description on the Welcome screen, Server is going to evolve into a local hub for sharing data between Macs and iOS devices. Perhaps this system will also be linked to one or more iCloud accounts? Rumors of this capability getting added to Time Capsules were floating around last month, but adding these features to Server (which can run on any supported Mac) makes more sense. That allows Server to function as a supplement to cloud services, rather than an alternative to them.

So what do you think? Who is Apple targeting with Lion Server? Will you use it? Let us know in the comments.