Pete, beg to differ with you, but in that Compaq example, the $6M for hardware was more than 50% non-server, even though they called it server hardware. If you look at that list, starting with the EMA 12000 storage array, and down through the FC controller and fibre switches to the bottom of the hardware, these are all part of the SAN with which the server was tested. The SAN should not be lumped in with server cost. The server itself was less than half of the $6.4 million hardware bill.
So, out of a $6M+ server, CPU chips cost less than $128K or about 2%. If Intel only supplies the CPU chip, it will be even less than that.
Even ignoring the above, you are ridiculously low with your 2%, or 4% if you took out that SAN stuff. I know this from years of experience cobbling together computers. First, you're comparing server cost to the OEM with their server selling price to a customer ($128K would be the cost to an OEM for 32 plain jane Xeons, not 64 bit chips designed for 5 or better nines servers. The $3M is the selling price to the customer, highly marked up wrt the OEM's component costs). I really don't think Itaniums that go into 5 nines to 8 nines servers are going to get just $4K for Intel. They should be somewhere between that and what Alphas and SPARCs sell for, which I would guess is more like $12K each.
Rule of thumb: CPU and related HW, plus memory and related HW is about half the cost of a large server, to the OEM that builds it. Bear in mind that large servers don't go out with gazillions of drives in them any more: those are out in the SAN now. They also don't go out with many PCI/HBA cards, just empty slots, as customers tend to buy those separately. By the pound, they go out to customers as mostly sheet metal, power supplies and fans, a few drives (lots of redundancy in all of these however), and mobos with lots of CPUs and memory.
You have been continually downplaying Intel's sales that they may gain when getting into 64 bit servers. What is it, if and when AMD gets there, the story will switch, like "80% of server cost is in the CPUs"?
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