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To: pgerassi who wrote (138737)	7/6/2001 3:08:35 PM
From: Mary Cluney	Read Replies (1) \| Respond to of 186894

My dearest Peter,<<<But at the higher level servers, the CPU makes for a much smaller segment of the pie. Out of $40B in servers at the upper ranges (mid and high), only $1B to $2B per year are in the CPUs and even these will be superceded by super clusters of 1-2 way servers. Who will pay $1M for server hardware when a $70K server can do it better, faster, and cheaper with far more redundancy? >>> I like your style. You start with some very creative assumptions designed to arrive at some powerful conclusions. Or, is it the other way around, you start with the conclusions and then create the assumptions? Nevertheless, your assumption that at the higher level servers, the cpu cost is 2.5 to 5.0 % of server cost gives me a picture of a 4-Way xeon that cost $100,000 (that is just an example of a server with a 4% cpu cost). While there may be such configurations as well as 4-Way Xeons costing multi million dollars and even 4-Way Xeons that are so valuable that they are priceless, I do not believe that factory shipped servers typically have invoices with this kind of cpu cost ratio. (However, I do not know what the typical factory invoiced cost ratio is for a high end server.) It is also a good assumption that 1-2way servers will become more powerful, cost less, and perform more and more of the functions that higher priced servers currently perform. No one, indeed, will pay 1 million dollars for a server when a $70,000 one will do. But, that does not imply that there are not more complex task that the $70,000 servers cannot do and that requires a million dollar server. <<<Let me give you another example of a small server. ...... Now the CPUs are less than 0.2% of the cost and much more like 0.1%. These servers are installed by the thousands and are included in your figures in the 1-2 way category. This does not include the application software, integration, maintenance, or any other such integration or infrastructure costs.>>> There is nothing that you say here that I can dispute. Servers are increasingly taking over mundane tasks. However, I don't think this gives anyone a real sense of what servers are typically doing in the real world - in the global economy - and the pent up demand for server type applications. Just think of the number of hospitals in the world that need server type applications for billing, patient admissions, prescriptions, imaging, transcriptions, record keeping, and the many other functions that keep health care costs so high. (Please, don't tell me that most of these functions are already automated and require no more server type resources). This doesn't begin to itemize the requirements for IT support the health care industry. Now, if we move on to the local financial institution and see if there are functions that they think can be automated - I am willing to bet that each local financial institution's management has a list of areas where server type technology is needed to make their operations more efficient and profitable. You can go from sectors of the economy, educational establishments, local, state, and federal governments and speculate on potential IT needs and you will arrive to the conclusion that CPU's will be more important than ever. In fact, you could practically state that CPU requirements will be infinite. My point, if I could, is that the age of technology is in its infacy and that the CPU is at the heart of this technology. I do not beleive that relative cpu cost will diminish in the overall scope of things. In, fact, I think that ratio can only get bigger. Mary