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To: Mary Cluney who wrote (141385)	8/12/2001 4:14:22 PM
From: pgerassi	Read Replies (2) \| Respond to of 186894

Dear Mary: If you didn't get that I was talking annually, make a note of it. Besides the 2% number is for mid to large servers. 1 way web servers do not apply as I consider them to be just PCs. Ditto for print servers. Storage servers can be made out of medium PCs (CDROM towers, etc.), high end PCs (low to mid end RAID and tape libraries), workstations (mid to high end RAID and tape libraries), and up. Clusters and mid to high end server boxes is what should be placed in server numbers to separate them from the PC end. IDC may include these low end systems, but if you want to consider each market separately you need to remove the PC and workstation markets out. Since you have expressed many times to exclude storage servers (single function file serving types), you must separate them out as well. And you can no longer use the IDC numbers as they include SANs and all of the others when the purchase says somewhere "server". In fact from a CPU manufacturer point of view, server class CPUs are those which are designed for mid to high end server work. And that separation point has been rising with CPU power. The power required for server type tasks however rises more slowly, and thus, you get server creep towards the lower end of the CPU performance grades. The margins drop as you go towards the lower end and this is where your perception and mine becomes different. I base mine on the narrow legacy viewpoint. This view is shared by those who make mainframes and do those enterprise tasks where those were mostly used. You are basing yours on the wider tasks viewpoint. If it does mainly server tasks, its a server is that view. In that point of view, the bulk of the servers are PCs. Intel and AMD treat those as mainline PCs, not servers. The volume that makes it cheaper to use these CPUs in server type tasks comes from here. The development costs are spread over a far larger volume. And the gross margins are far smaller. If you want to talk of the $1000 and up ASP server systems, you need to take the narrow view. If you want IDC's $60 billion server market, you must use the wider market and its just above mid range of the PC market that makes the bulk of the unit numbers and ASPs in the $300 ranges. Matter of fact almost all PCs are servers in one way or the other, if you want the widest view. So do not use $1200 ASP numbers in the wider view. Mixing views is where many people go wrong. $3000 dollar corporate servers contain $100 CPUs (what do 600 MHz PIIIs go for?), not a $1000 one. Pete