Dear Mary:
You must not know then that an OEM needs to pay for the engineering that makes the CPU go into a server, the PCB that it sits in, the PS, the buses, the interconnects, and all those things you evidently think are free. Then you must add in the costs to test both to see it works in all the conditions it must face and each unit for QA purposes. That must all be free too to you. Then it is tested for standards complience to the FCC, UL, EU, and all those other bodies. You must think that is free too. The cost to document all of that must be free. The cost to stock those parts and assemble them must be free too.
Sorry, that all costs money even after obtaining a CPU chip from anyone including Intel. Now you add in charges to make up for marketing, shipping, and all those administrative costs. Then you must add in some profit, hey they do not do this at cost? You'd shoot them, if you were a shareholder in that OEM.
So margins are that high, especially in the GREAT server market, else why would Intel want a piece of the action? By your lights, Intel should sell CPUs for the cost of the materials to make them. You want them to sell Itaniums for a few bucks? Get real!
And I submit that any company that needs 50K TPCm out of their server 24-7 will pay much more (maybe 2X in CPUs at most, but at least 2X for memory, 3 to 4X for controllers, 1.2 to 2.5X for disks, and more than 10X for everything else).
You need to make everyone overpowered underdisked servers to make your point and conveniently forget about markup needs so that the OEMs make money for without the later, the former would not be bought or added to server revenue. Heck, even in the three pricing quotes you made the CPU chip markup is at least 100% for a PC maker like DELL.
If anything, I overestimated the server CPU chip revenue proportion.
Pete |
