Will Xserve work without a rack?

Before I get all these rants about how stupid this question is let me preface it with a short story:
The owner of my company wants a new server. He asked me which I thought was better: tower or rack mount. I said that the PowerMac doesn't have the service warranty we would expect from a server, and as a desktop, is not really designed to run 24/7 the same way Xserve is. So we configured a new Xserve and it is in the process of being made. He then asked me the question: "will it work without a rack?" Being honest, I said "It would power on, but it's not recommended to run that way because it can't cool properly and it's not physically secure."
Now he tells me we aren't ordering a rack for this $6000 server. Can you please list all the reasons this is NOT going to work, so I can go back to him with a huge rebuttal? It just doesn't seem logical to me to not spend a few hundred dollars to properly secure this very expensive piece of equipment, and I don't have any fight left in me to come up with all the answers on my own.
PowerBook G4 12" 1.5GHz   Mac OS X (10.4.7)   5th Gen iPod Video, 1st Gen iPod Nano

He then asked me
the question: "will it work without a rack?" Being
honest, I said "It would power on, but it's not
recommended to run that way because it can't cool
properly and it's not physically secure."
Speaking from my limited experience (18 months) with our Xserve G5: The Xserve does not need top and bottom venting; it cools front to back. A risk, though, will be that it gets shoved back against a wall and thus has poor airflow out the back, and you don't realize until you have done it what a mess of cables comes out the back and why you need the cable management arm (as aggravating as it is when you first use one) to manage the cables.
The Xserve is heavy. It's difficult to walk away with one. The enclosure lock will still work without a rack, but it's not real security anyway, just protection against the drives being bumped out by accident. But an unracked Xserve will be prone to injury and falling off a table, etc. They are BIG and HEAVY. The Intel Xserve is even longer than the Xserve G5 (look at the dimensions).
If the concern is the expense, well, you can build your own rack rather cheaply. I suggest Starcase (http://www.starcase.com), which lets you build a rack of any dimensions - you will probably want at least a 3U or 4U rack for your Xserve - 1U for the Xserve, 1U for a UPS (APC has a nice 1U 1000W UPS and a same-size 750W UPS), 1U for a tape drive and autoloader (you will need to back up all that data), and you might need another few rack units of height. The nice thing about the Starcase rack solution is that, as your rack height needs expand, you can simply get the four corner posts of greater height and grow your rack. Starcase also has side panels, top panels, etc. For custom-height solutions (rather than their pre-bundled standard sizes), see:
http://www.starcase.com/customsteel_rackstore.htm
Check the Starcase prices so you can present your boss with a true picture of the cost. They are built like a tank. I STRONGLY advise that you put your Xserve in a rack; otherwise, it will be very difficult to service when the time comes - and you WILL need service, eventually.
However, note that the Xserve is NOISY. If the Xserve is going to be in an office environment, you will need an acoustical enclosure, such as the XRack Pro. See:
http://www.xrackpro.com/
Very nice, very quiet, and a bit pricy.
Hope this helps.
Russ
Xserve G5 2.0 GHz 2 GB RAM   Mac OS X (10.4.8)   Apple Hardware RAID, ATTO UL4D, Exabyte VXA-2 1x10 1u

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