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To: Mary Cluney who wrote (138993)	7/10/2001 2:53:32 PM
From: Paul Engel	Respond to of 186894

Mary - Re: "It seems like they charge $466,200 for the Alpha Server GS320 and $16,100 each for 31 add on 1 ghz cpu for an additional $499,100" That's good business - if you can get it ! Paul

To: Mary Cluney who wrote (138993)	7/10/2001 3:08:38 PM
From: Tony Viola	Respond to of 186894

Mary, good find. From that price list, it looks like Compaq sells the guts of the CPU hardware, they call the Compaq AlphaServer GS 320 6/1001 Model 32 for $466K, and it comes with one CPU. This would include mobo, chipsets, cache, etc. Nobody would buy just one CPU, so they sell the add-ons at $16,100 each. That is a nice price. Don't forget though, that price is a marked up one that they charge you. They pay much less than that to the CPU chip vendor. Still, even if it's 8K each to the CPU chip vendor, it's still nice. Tony

To: Mary Cluney who wrote (138993)	7/10/2001 6:00:35 PM
From: pgerassi	Read Replies (1) \| Respond to of 186894

Dear Mary: The main server box does contain 1 CPU module. The module is comprised of a PCB, (1 probably or more chip) CPU, high speed SRAM L3 cache (8 MB), control logic, a big HSF, and installation and maintenance costs. I estimate that the CPU chip itself is much less than $16K. Markups in this area are 100 to 300% typically, so CPU chip module is more likely to be $4K, if not less. 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. You can look at it another way, the box (3 cabinets), main FSBs, MB, PCBs, chipsets, PS, etc., plus 1 CPU module cost $466,200. One note, it appears that RDBMS providers are going to a tiered platform power based pricing scheme. This may exacerbate the trend to smaller CPU power boxes with larger memories and storage than typical now. Pete

To: Mary Cluney who wrote (138993)	7/10/2001 10:24:42 PM
From: kash johal	Read Replies (1) \| Respond to of 186894

Mary, Several comments. 1. $60Bn market figure. This seems very reasonable. Sun alone is a $20Bn/yr company with majority of their sales as servers. 2. You are way overestimating impact of itanium in $ sales IMHO. The same high performance CPU will go in several market segments for several suppliers ranging from single CPU workstations to very high end servers. The key is that this will drive higher volumes and lower CPU prices. I can see Intel having itanium chip sales in order of 1M units/yr with ASP of $4K max in a 3-4 few years which translates to $4bn in revenue. Profits on these chips may reach 25% or close to $1Bn/yr. Thus it can be a great business but nothing like the overall size of Intel which is a $30Bn business today and likely to be $40-50Bn in 3-4 years. Perhaps another way of explaining it to you is to look at SUN. Their highest performance CPU in their low end workstations which are priced around $5-10K (SUN BLADE 1000 family). The same chip will be used in $1M plus systems as well(in fact their highest $$ systems are still using slower older generation chips). The value of the CPU's in the server market will DECREASE because system houses will use industry standard CPU's. So inherently for Intel to succeed they must offer reasonably compelling value. Now lets suppose they price their chips at $10-20K each. Folks like Sun, IBM will wipe HP,CPQ,Dell etc out in the server market as their inhouse systems will be much lower cost. regards, Kash