Pricing a dual CPU server

- by Paul Murphy -

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, Sun, Dell, IBM, and Red Hat websites on January 26/05. I'm a SPARC bigot so the first machine I looked at was the Ultrasparc III based Sun 250. At $8,045 list, this thing offers a tremendous track record for reliability, Solaris 9, dual 1.28Ghz US3 CPUs, 4GB of RAM, dual 73GB 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 took 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 1.65GHz POWER5 processor including 4GB of memory, two 36.4GB hot-swappable disk drive and dual 10/100/1000Mbps integrated Ethernet ports.

With Red Hat Linux and 4GB 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.)

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 400mhz US2, 4GB, 182GB 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 250 based machines that would also be more than adequate. As configured below Sun's V20z listed at $7,695.

2 AMD Opteron Model 250 Processors at 2.4Ghz
4-GB Memory
2 73-GB 10000 RPM Ultra320 SCSI Disk Drive
1 CD-ROM/Floppy Drive
2 10/100/1000 Ethernet Ports
Solaris x86 RTU

In comparison, an identically configured IBM e326 with Red Hat Linux would cost over 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 Sun's offerings. As specified it had:

2 x Xeon 3.2Ghz
4GB DDR2 400MHz (2X2GB)
2 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 73GB US320, 10K RPM
Dual On-Board NICs
24X IDE CD-ROM
1.44MB 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.

The real alternative to the 250 isn't the AMD machine but Apple's X-serve. 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 4GB, dual CPUs, and a four way RAID consisting of four 250GB drives with a 1GB buffer, it came in at $12,597 -significantly more machine for over 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 2GB 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 that there just aren't reliability numbers on it, and secondly that 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 X-Serve/X-raid combination for around $15K 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.