The timing of Xserve was just extremely bad. It was a latecomer to an already saturated market of proprietary UNIX hardware that was already spiraling downward.

The timing of Xserve was just extremely bad. It was a latecomer to an already saturated market of proprietary UNIX hardware that was already spiraling downward. Once the iPhone was a hit and was printing infinite money Apple had no reason to care about the enterprise market ever again. IMO even if OSX and the PPC Xserves had been ready in the mid 90s, they definitely would have captured a larger enterprise market share (WebObjects too) but it still would have died off, like Sun, for the exact same reasons.