NTFS has the following advantages (which are particularly significant for network servers):

Complete support for Windows NT security.
NTFS is the file system of choice tor Windows NT Server because it is the only one that provides security at the server computer. Unauthorized users cannot bypass security on an NTFS volume by booting the server from a floppy.

Less trouble with file fragmentation.
FAT always starts storing files in the first available clusters, frequently forcing it to spread files across multiple noncontiguous clusters. This fragments the files and greatly slows file system performance because more head seeks must be made to retrieve the entire file. On NTFS volumes, Windows NT always looks for a block of contiguous clusters large enough to hold a file in unfragmented form. If such a block is found, the file will not be fragmented. Files can become fragmented on NTFS volumes, but the problem is less pronounced.

No tendency to enlarge the minimum cluster size as the volume size grows.
File space is allocated in cluster-sized increments, with each file taking at least one cluster. On FAT volumes, the cluster size increases at certain storage capacity intervals. When a 255MB FAT volume is formatted, the cluster size is set at 4KB. But a 2048MB FAT volume is formatted with 32KB clusters, which means that even a 1-byte file takes up 32KB. NTFS does not have this problem and uses uniform-sized clusters regardless of the partition size. Because servers tend to have especially large hard disks, the greater efficiency of NTFS is highly desirable.

Long filenames - up to 256 characters - with support for mixed-case letters.
OS/2 users can access long filenames; MS-DOS users see shortened versions of the long filenames.

File-by-file compression.
Files retain their individual identities. When a FAT volume is compressed, all the files are stored in a single master file, which makes all files subject to loss if any part of the master file is damaged.

Disk activities can be logged to enable activities to be rolled back in the event of a system failure.
Corrupt files resulting from hardware or power failures are much less common with NTFS.

Although only Windows NT computers can directly use NTFS files, network users can access files on Windows NT servers quite normally whether they are using MS-DOS, UNIX, or Macintosh computers. Windows NT presents the files to non-NT computers in a form that the computers can accept.

With Intel x86 servers, the only reason not to use NTFS is that you need to dual boot the computer using DOS or OS/2. Frankly, for servers, that's not an advantage. You want servers to be locked up tightly, and you most certainly don't want users to be able to boot the computer under DOS and attack your files.

With Advanced RISC computers, the system partition must be formatted with the FAT file system to enable the computer to boot. All other partitions can be formatted with NTFS.

In summary, all Windows NT computers should use NTFS whenever possible (with the sole exception of the system partition on a RISC-based server).