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To: Mary Cluney who wrote (138578)	7/3/2001 11:32:44 AM
From: Tony Viola	Respond to of 186894

Mary, >Secondly, when the industry say they sell 4 million servers a year and that produces $60B in sales, I don't think they include other major items in hardware, software, and services into the sales number. You're right and the FUD guy is wrong. IBM, who is the premier services company, collects services revenue into a division separate from the server division. Software can be bundled or not, depending on the product or the whim of the moment of IBM about bundling at the particular time. Server revenues are just that, what you see is what you pay for. Tony

To: Mary Cluney who wrote (138578)	7/5/2001 12:36:09 AM
From: Dan3	Read Replies (2) \| Respond to of 186894

Re: The server division will not get credit for software and services sales. IBM Global services (which operation I suspect you think I'm lumping in with server sales) does things like administer databases and operate helpdesks for companies. The server divisions sell servers, components for those servers, support contracts for those servers, supports the servers, sells software for the servers, etc. 4 million servers at ASP of $15,000 is not a bad estimate Mary, I received a Gateway Federal systems flyer yesterday at work. It featured a couple of desktops, a couple of notebooks, and one server. The server was a dual processor capable system that, by default, shipped with a single 933MHZ P3 Xeon (256K cache). The server gw2k.com is typical of what's offered by Dell, HP, IBM, etc. and variation on it (often in rackmount cases or as "blades" probably account for more than 3 of your 4 million servers. The average configured price is less than $5K (including software) and of that $5K less than $250 goes from the OEM to Intel for the processor. 1 million of the 3 million likely ship with 2 processors (making it a $500 sale) but another 1 million ship with less expensive PIIIs, bringing the ASPs down some. If you want to try your hand at configuring one of the more expensive servers, I think you'll find that Citrix or Oracle oriented server, with 4 large cache Xeons, will run at least $30K to $60K, with $4k of that going from the OEM to Intel. Remember that when you budget for a large server, you have to include memory for it, disk drives (which may be procured as part of a SAN, Tony, but you still have to buy them and they still go into the budget as server costs :-), controllers, software, and backup. And those other items don't go into the budget as help desk support, misc supplies, or human resources expenses, they go into the budget as server costs. So, of your $15 Billion in quarterly server sales and a million units, 3/4 of the units are systems already with Intel inside for $350 million in sales, a good part of the remaining sales are for S/390, RS6000, AS400, SPARC, etc. sales which are going to be gained very slowly, if at all, but Intel has a good shot at the Alpha and HP sales over the next few years, and a good shot at the SUN sales if SUN doesn't shape up. Meanwhile, AMD is coming at Intel from below in the server market, just as Intel is going after those other guys. Remember that going from a SUN to a WinXP server system is a nightmare that will include new software, new OS, new procedures, and riffing (reduction in force) some of the people involved in the decision, while replacing a dual PIII server with a Dual Athlon server doesn't involve much more than doing a backup and a restore. You should reload the OS and apps (to make sure you get the right chipset drivers and registry entries), and do a dump and imp of your database(s).