HARDWARE
Pricing a Dual CPU Server

Some friends of mine are considering setting up a new company around an e-commerce idea and asked me to research the cost of the IT infrastructure needed. As part of that, I went Web shopping for a low end server to get them started, and found some surprises.

Note that all pricing data shown below is from the Apple (Nasdaq: AAPL), Sun, Dell (Nasdaq: DELL), IBM (NYSE: IBM), and Red Hat (NYSE: RHT) Web sites on January 26.

What my friends need is pretty basic: something that will give them absolutely no grief while comfortably serving up something less than an anticipated maximum of about 50,000 Cocoon generated pages in the daily six-hour interval from about 6 p.m. to midnight in New York (3 p.m. to 9 p.m. in California). The primary server will be on their premises, in part because they're using Cocoon and in part because I distrust hosting services and recommended against that option.

Great Little Machine

I'm a SPARC bigot, so the first machine I looked at was the Ultrasparc III based Sun 250. At US$8,045 list, this thing offers a tremendous track record for reliability, Solaris 9, dual 1.28 GHz US3 CPUs, 4 GB of RAM, dual 73 GB US320 disks, and a big machine architecture in a small tower.

It's a great little machine, but nowhere near state of the art for dual processor performance. Worse, Sun's been hanging fire on the UltraSPARC IV based replacement for so long that I'd expect the speed-doubling upgrade would arrive the week after my friends take delivery of the 250. That's a problem, not because it would have any effect on the quality or value of the 250 -- it wouldn't -- but because it would change the buyer's perception of the deal , and therefore of me, by making them feel a bit ripped off.

In contrast, IBM has its two-way Power5 based model 720 available for sale now. Here's how IBM describes it's basic configuration:

OpenPower 720 rack-mount or deskside server with 2-way 1.65 GHz Power5 processor including 4 GB of memory, two 36.4 GB hot-swappable disk drive and dual 10/100/1000 Mbps integrated Ethernet ports.

With Red Hat Linux and 4 GB of main memory, this thing sells for $13,469, about $5,000 more than the Sun 250. (It's not clear from the documentation, by the way, whether IBM considers the dual core Power5 in the 9124-720D to be two CPUs as indicated above or one as suggested by other material on their site.)

Cost Consideration

If the buyer wanted to spend that much, they could get a fully refurbished Sun 450 for about $4,000 from anysystem.com (4 x 400 MHz US2, 4 GB, 182 GB of internal SCSI2, and a one-year warranty) right now and a 290 or whatever emerges to replace the 250 after the business takes off. That reduces start-up cost, gives them a back-up server for later, and would still be almost $1,000 cheaper than the IBM/Red Hat option.

Both Sun and IBM offer dual AMD (NYSE: AMD) 250 based machines that would also be more than adequate. As configured below, Sun's V20z listed at $7,695.

Two AMD Opteron Model 250 Processors at 2.4 Ghz
4 GB Memory
Two 73 GB 10,000 RPM Ultra320 SCSI Disk Drive
One CD-ROM/Floppy Drive
Two 10/100/1000 Ethernet Ports
Solaris x86 RTU

In comparison, an identically configured IBM e326 with Red Hat Linux would cost more than a thousand more at $8,983.

The comparable "industry standard" machine, the Dell PowerEdge 2850 with Red Hat Linux, came in at $8,472 -- more than both of Sun's offerings. As specified it had:

2 x Xeon 3.2 Ghz
4 GB DDR2 400 MHz (2X2 GB)
Two Post Rails for Non Dell Rack
Red Hat Enterprise Linux AS 3, 1YR RHN Subscription, Non Factory Install
Drives attached to embedded SCSI controller, No RAID
2 x 73 GB US320, 10K RPM
Dual On-Board NICs
24X IDE CD-ROM
MB Floppy Drive
Redundant Power Supply With Dual Cords

All three of the PCs need a rack mount -- meaning that if you only need one machine, their real price is about $1,500 higher than list, and the SPARC/250 becomes the price leader by a few hundred bucks simply because it's a tower.

Xserve Option

The real alternative to the 250 isn't the AMD machine but Apple's Xserve. It's different, but would run the software and is clearly the fastest at computing, although slower for page at a time I/O unless you also get the intelligent X-raid array instead of the internal SATA disks.

With 4 GB, dual CPUs, and a four-way RAID consisting of four 250 GB drives with a 1 GB buffer, it came in at $12,597 -- significantly more machine for more than a thousand less than the IBM 720, but also $4,000 more than the Sun 250, and again not available in a tower configuration.

There were a couple of interesting surprises in this process. First, I was a bit surprised that Sun and IBM both sell upgrades at a significantly larger premium than Dell does. Adding two 2 GB DIMMs, for example, would cost $2,100 from Dell but $2,500 from Sun and $2,958 for IBM customers.

Secondly, I had expected IBM to try to buy market share with its low end Power5 boxes. Instead it seems to be pricing the product only for IBM loyalists -- offering considerably less machine for more money than both its major competitors.

The biggest surprise, however, was my own gut level reaction against buying the V20z. On the numbers, that's obviously the one to get, but it wasn't the one I recommended.

Fundamentally, these people are betting their new company on a small machine, and I just didn't feel comfortable asking them to bet on a PC. There were two rationalizations: first, there just aren't any reliability numbers on it, and secondly, the V20z, like the SPARC/250, is due for replacement by a line of genuinely Sun designed AMD servers.

That's what they were, however, rationalizations for an emotional response. So I pointed this out to the client, discussed all the prices with them, and suggested that they should either get the Apple XServe/X-raid combination for around $15,000 net if they felt confident and had the cash, or get a used 450 now and plan to upgrade to whatever replaces the 250 when the business is well established.