On Friday, Apple announced that it will discontinue the XServe as of January 31, 2011. In an online document called Xserve Transition Guide, Apple advises people to use the Mac Pro or Mac mini as a server platform for Mac OS X Server.
http://www.apple.com/xserve/
http://images.apple.com/xserve/pdf/L422277A_Xserve_Guide.pdf
In the document, Apple said "Mac Pro systems deliver performance and expandability equal to or surpassing Xserve" and that " a single Xserve could be replaced with one or multiple Mac mini server systems." The company also said that the Mac mini is "Apple's most popular server form factor."
The Xserve is a flat, rack-mountable headless Mac server platform with hot-swappable hard drives and power supplies, unlike the Mac Pro and the Mac mini.
Regarding support of existing Xserves, Apple said this:
Apple will honor and support all Xserve system warranties and extended support programs. Apple intends to offer the current shipping 160GB, 1TB, and 2TB Apple Drive Modules for Xserve through the end of 2011 or while supplies last. Apple will continue to support Xserve customers with service parts for warranty and out-of-warranty service.4
The announcement comes at a time when the company still has not made any statement on whether or not it will release a server version of Mac OS X 10.7. This is unusual for Apple, which often announces the client and server version of a major revision at the same time. This has lead to speculation on the web that Apple plans to drop Mac OS X Server. However, at this time, Apple's Active Directory integration solution for Mac clients still requires Mac OS X Server.
Lion-preview-no-server.html
Apple has been selling the Xserve since 2002. The first Xserves were powered by PowerPC processors.