Dear Mary:
Are you dense or can't you read? The medical system was not using a tape library, but a broadcaster and a manufacturing system connected to the warehousing system was. The manufacturing system uses the tape library for doing all those things that used to be done in batch mode on the old mainframe used for that purpose. They did not want to spend money on rewriting those applications. It was far cheaper to simply buy faster hardware. The warehousing system simply had to connect to the mainframe by simulating a 3270 terminal simply because that meant they did not have to change any mainframe software. As for the broadcaster, all commercials, and many programs are stored in tape libraries and is a true "video server". The same hardware is used in data tape libraries because it is simply put tape 4367 into tape deck 3, and many simple commands like that. In typical data tape libraries, two PCs are used, one controls the arm, and the other controls the tape drives and connects to the mainframe with one or more SCSI channels.
As to your server configs, here is what is wrong:
1. A small business starter server configuration PowerEdge 300SC. Single processor 800 mhz/256k cache PIII with 128MB SDRAM 10 GB HDD, Red Hat Linux with 3 yr service support. (no monitor)
Server cost $1010.00. CPU cost $400.00
This is no more than a very small web server. Its missing NICs, video board, switching ports (obviously to control boot, etc.) for keyboard, mouse, and monitor. All of these cost money. Furthermore, even with 2 or more 100BT NICs, 800 MHz P3 or Celeron does not cost $400. The chip brings to Intel revenue of $80 to $100. So for this low end where anywhere else you could get a NIC enabled system with the same features for $500 and a good CPU of $120 (P3-800EB FCPGA) in a cheap PC case. In a 1U Web server case add another $300. That gets you a margin of 15% but still a very low end system. No redundancy, no backup, no raid, and no hot swap. Those things cost about $2K and up. And we haven't even dicussed the RDBMS unless you want one of the simple ones that come with Linux.
2. PowerEdge 4400 dual processor system Dual PIII Xeon 1ghz/256k cache, 128MB SDRAM 73 GB HDD, 3 yr. Hardware Support.
Server Cost $5449 CPU cost $1400.00
Too little disk for either network attached storage or heavy RDBMS work. Just another glorified PC acting as a server. Nothing here that a simple dual socket 370 could not do for a hell of a lot less money. It would use two P3 700 MHz in a dual board with on MB SCSI. For simple RAID-1 (disk mirroring), at least 2x the drives are needed and most application blow through 30GB databases (some 5 man shops go through that each week). A more typical setup for dual 700 MHz would be triple 73GB 10K SCSI RAID-5 with 16MB cache in the controller, 3GB SDRAM ECC, quad 100BT NIC, and a good autoloader DLT tape backup unit, and a 1KVA UPS, all for about $11K. Now server cost is $16K, CPUs $240, or 1.5%
And I still think It is not good enough for an enterprise system, but much better than yours.
3. Scalable Enterprize Server PowerEdge 6400
Quad Xeon 700 mhz w/2m cache, 8GB RAM
dual 73GB Raid HDD
Windows 2000 Server 5 Client License
Server Cost $30,228 CPU cost $10,450
At least we are getting beyond the glorified PC sizes here. But a 5 client license is a joke. If that is all the users it can handle, Win2K should be shot! I have seen 133 MHz Pentiums handle 10 to 20 users in an intense compile environment and 20 to 30 in a Oracle 8 RDBMS environment both using UNIX systems with only 128 MB of memory. With 8 GB, and 4x700 Xeons, 100 users should be easy and more like 250. 240 to 320 GB of disk is needed to hold 80 GB of real data in a RDBMS. Thus quad 73GB disks at a minimum. So add $4k more. Still need that autoloader DLT for backup (you need to backup at least once a day for decent recovery times) for $4K more. Add 2 1000BT NICs for $1K more. A 2 KVA UPS for $2K. But, 4 Xeon 700MHz with 2MB cache are only $5K, not $10K.
So without a 250 concurrent Oracle 8 license, the server is up to $41K and the CPUs only $5K. I think that you could still get away with only 1 or 2 processors installed. A dual AMD 1.2 MP could do this job for a lot less money and still have excess power. Server $20K and CPUs $500.
Besides, the Olympic Committee could do it without needing a single server box, just their workstations with upgrades to disk, memory, and a few other things. Heck, if they used ordinary home PCs running Linux, they would have enough power and plenty of storage for what they need to do. A single Beowulf cluster could also take care of their server needs. Both are composed of 1-2 way PC or 1U rackmounts.
Now PCs have the highest CPU margin, 2 way SMPs the next, and so on. My largest claim is that $60B is not just bare bones hardware. It is likely to include OSes, RDBMSes, routers, switches, NICs, cables, PBXs, UPS, and all of the other hardware to install and run these systems. Given that PCs and 1-2 way servers are extremely alike, it is difficult to see any real dividing line between the two. You are using that fact to say that most of the $60B will be glorified PCs. But, Intel already includes that so no new additional spending beyond typical PC growth rates can occur. The market in the high end system hardware is flat to down. The market for high end system software is not.
Most of those lucrative sales are kept in the hands of the OEMs and VARs. They do not trickle as much to component suppliers. If that $60B includes system integration, 1% CPU margin is at the high end wouldn't you agree? If it just includes supplied GP software, CPU margins may go to 2%. If the 1-2 way is eliminated, since it tracks the normal PC market, that $60B becomes, what, $6 to $12B? CPU margins in this market also drop compared to 1-2 ways. Now max possible additional revenues are $1B or less. Now it's no longer a BIG market for Intel. Matter of fact, competition from AMD in the 1-2 way market could lose just as much for Intel as it could possibly get in the high end and the battle will drag even more sales into the low end market.
All in all, you are going lower into the lower end to justify your numbers, yet you always talk of the huge market at the high end. And you have yet to take into account the fact that most servers are shipped with less than the maximum number of CPUs (they want the higher amounts of memory but, not the processing power or its costs).
Pete |
