As you know, the original Kaleidescape product line consisted of a 5U Server, a Player (no optical drive), and a KREADER with an optical drive for importing DVD content. That was the basic system. Over the years, K added several new products to that system (Speed Readers, Servers (3U/1U/1U+), upgraded Players, Vaults).
When the decision was made to start the transition to "digital" support, new products were needed, not only because of the changing technology, but because of contractual requirements with content owners to allow persistent copies to be stored in Servers. These new products were designed to only support the newly opened K Store, and the first product released for that purpose was the Alto Player (fun side note, I own the first Alto released for sale (serial# 0001)), followed later by Players (Strato) and Servers (Terra) that supported 4K. Over time K was able to integrate their Vaults with the Alto/Strato's to add the additional capability of physical disc playback in those systems, for owners that desired that capability.
At some point in this transition process K started to identify all of the first product line as "Premiere" products, and the newer product line as "Encore" products (consisting of Alto, Strato, and Terra products). The use of "Encore" for identifying the newer line in their product marketing was eventually dropped and K started referring to these new products as "Strato" and "Terra," (they dropped Alto as a product because it didn't support 4K). To this day, many of us still use the term Encore when referring to the Strato and Terra products.
Premiere and Encore products remain completely separate lines, with exception to the Vault integration mentioned earlier, and the use of Co-Star to see a unified on-screen guide of content owned on both systems. The drives used in these two systems are not interchangeable. As to why that's the case, I believe on some level it's related to the business model changes that recognize the move away from disc based content, and eventual discontinuance of the Premiere line, along with design differences between the two lines.
Premiere Line:
5U Server
3U Server
1U Server
1U+ Server
KPLAYERS (2500, 5000, etc.)
M-Class Players (M500, M300, M700 (Vault/Player)
Vaults (DV700 and M700)
Readers (single optical drive, and multi-disc Speed Readers)
KMUSIC-4000 (Music Player)
Encore Line:
Alto Player
Strato (Player: with and without storage)
Strato-S (Player with storage)
Strato-C (Player only)
Terra Servers (Full sized and Compact)
Jim
Disclaimer: The above info is MY take on this subject based on my experience as an owner and dealer over the years, going back to when K opened for business. My statements are in no way intended to speak to K's motivation for some of the changes that occurred over the years, nor to their actual business model, or future plans.