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IS THIS A RIDICULOUS PRICE FOR A SERVER?

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June 20, 2011 7:02:04 AM

Looking for some feedback; want to hear others' opinions on a server that the I.T. providers for a friend's business just sold to them:
It is a small business with fairly limited server needs:
- three users regularly access the locally hosted database,
- Outlook access (Exchange server) is provided for another 6 or 8 users,
- limited file sharing services are used intermittently by those same employees.
- There is NO NEED FOR AN APPLICATION SERVER or WEB-HOSTING now or in the future.
- Moreover, much of the past activity is moving to an independent hosting service,
as the business shifts some processes of its database to a browser based mgmt. tool-set (operating completely independently).

OK, the I.T. provider suddenly said they should buy a new server, and my friend's small business signed off on the purchase:

$11,000 for the prebuilt server, including some pricey software for virtualization, along with a new MS OS.
$7,000 for the installation / setup of that server.
for a grand total of over
$18,000 to replace their now four year old server.

Given their limited business demands, and the fact that some of the current work load would be moving to an independent host soon, it seemed to me that even if it was time to replace their "old" server, this solution was opportunistic overkill: way more server, at a much higher price, than could be remotely justified (why on earth is Virtualization needed here?). Not to mention the excessive setup fee -- even at $120 an hour, we're talking about 60 hours to set it up (really?). Basically it looks to me like the I.T. people kinda scammed my friend's business out of thousands.

Anyone want to weigh in on this with their own opinion? Thanks !
June 20, 2011 7:16:45 AM

I'm no expert, but that sure as hell seems way to expensive for such a simple server. You could build one for $1,500. Might I ask why you came after the fact though?
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June 20, 2011 7:29:54 AM

Good question,
Unfortunately, my friend's boss signed off on the purchase order when the I.T. people came to him; I THINK they offered it as if it were the only solution to some I.T. complaints they'd had recently, and therefore had to be done right away. So my friend found out about it after they already ordered the server.

But, it's STILL important to critically assess, because she's convinced her boss that it's time to seriously review the business relationship they have with this I.T. service provider -- I'm a designer of semantic tech, and a former university professor in Information Systems (I also build quite a few desktop machines at home), and so when she told me about it I was kinda shocked by what they had recommended, given the business use-case, and also by the price. I'm encouraging her to hold these people responsible -- otherwise, they'll just continue to take advantage. So I could really use the opinions of others here on pricing, just as a sanity check, before i give her any more specific analysis to include in her review.
Thanks for your feedback.
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June 20, 2011 7:37:47 AM

Sorry, for the brief post, I didn't wanna spend to much time on what could be a troll. We get those from time to time.

I'm not sure what they put in that server rack, but for internal use only by 6-8 people, there is no way it should cost $11,000. Like I said I'm no expert as I usually deal in desktop PC's, but for 11k there better be some SERIOUS horsepower, especially since they charged you a separate service fee.

Not sure if this is possible, but could you throw some specs our way? It might help judge the value of the system a little better.

Did they include any sort of warranty service or support?

Again, sorry I cannot be of more help. I'm not used to dealing with professional IT services :p  But if you could obtain the specs on said machine it would make it much easier to gauge it's worth.
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June 20, 2011 8:07:19 AM

Ok, got the specs finally:

_______________________________________________________________________________________
NEW SERVER
DELL PowerEdge Server (Dell Direct Price: $8,411.00) Tower Chassis for Up to 8, 3.5" Hard Drives
Windows Server® 2008 R2, Standard Edition, Includes 5 CALS
24GB Memory (6x4GB), 1333MHz Dual Ranked LV RDIMMs for 2 Procs
Embedded Broadcom® NetXtreme II 5709 Gigabit Ethernet NIC
Intel® Xeon® E5649 2.53GHz, 12M Cache, 5.86 GT/s QPI, 6C Intel® Xeon® E5649 2.53GHz, 12M Cache, 5.86 GT/s QPI, 6C PERC H700 Integrated RAID Controller, 512MB Cache iDRAC6 Enterprise
DVD-ROM, SATA, Internal Electronic System Doc, OpenManage DVD Kit with Dell Management Console RAID 1/RAID 5 for H700 or PERC 6/i Controllers Tower Chassis, No Rails Required 3Yr Basic Hardware Warranty Repair: 5x10 HW-Only, 5x10 NBD Onsite High Output Power Supply, Redundant, 870W NEMA 5-15P to C13 Wall Plug, 125 Volt, 15 AMP, 10 Feet (3m), Power Cord Keyboard and Optical Mouse, USB, Black, English (2) 146GB 15K RPM Serial-Attach SCSI 3Gbps 3.5in Hotplug Hard Drive (4) 300GB 15K RPM Serial-Attach SCSI 6Gbps 3.5in Hotplug Hard Drive HyperV Role enabled in the Operating System
OPERATING SYSTEM MICROSOFT Windows Small Business Server 2011 Standard OPL with 5 CALS MICROSOFT Windows Small Business Server User CAL Standard 2011 OPL 5 LIC
BACKUP SOFTWARE SYMANTEC Backup Exec 2010 for Windows Servers Version Upgrade License S-Basic
BACKUP DRIVES BUFFALO DriveStation DataVault - Hard drive - 2 TB - external - Hi-Speed USB BUFFALO MiniStation Stealth USB 3.0 - Hard drive - 1 TB - external - SuperSpeed USB - black
NETWORK SWITCHES PowerConnect 2824, 24 1GbE 2 Ports with SFP option, Web Managed
_______________________________________________________________________________________

Note: Part of their justification for the additional OS setup including virtualization (Hyper-V, managed remotely), was to run "multiple OSs" -- I just have no clue why multiple OSs are needed in the first place here. Again, they will be running no app server or web server, nothing of substance beyond the DB and exchange server.


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June 20, 2011 8:15:10 AM

Just to be clear, I have no doubt they could rack up the full $8,000 (plus), by outfitting it this way from Dell -- i know how expensive that route can be. But my concern is that nothing like this sort of system is needed, or useful, in this very limited small business context (not to mention the $7,000 setup fee :ouch:  )
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June 20, 2011 8:21:29 AM

Ahh like I said, serious firepower.

From what I'm reading, they sold you the wrong type of server. It's got a very expensive dual Xeon processor setup, a nice RAID controller, and 15k drives (expensive and overly unnecessary). This kind of setup seems to be well over the top. Most of that 8k is coming from the 15k drives and RAID controller. Chances are the controller is necessary, but the 15k drives are not.

For instance, the latter 15k drives probably costed about $500 (not to dell, but to the IT company) each. Here's what I'm talking about: http://www.newegg.com/Product/Product.aspx?Item=N82E168... Now these drives are to my understanding often used when data speeds are crucial, and every milisecond counts. This doesn't sound like your usage case. For the same price, you could have bought 4TB of ultra reliable and high speed storage for $400, the cost of a single drive.

The other thing is what sort of RAID setup is running? Not an important question, but i'd like to see if that card is even being put to work..

So your suspicions appear correct. They overpaid. Now I will leave the rest to the actual experts on servers here.
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June 20, 2011 8:48:48 AM


I didn't want to put words in your mouth, but yeah, I was thinking the same thing on the drives: if some much cheaper and much larger 10k drives were partitioned so just the higher-speed parts of each disk were put to work on the high-demand tasks, the other slower partitions reserved for low demand, backup or whatever, you'd actually end up with a faster drive array, and with double the disk space. And actually, even a good stack of quality 7200rpm drives, with a minimally decent RAID controller, treated similarly, would give them more than enough speed for what they're doing, I would think.

Ah, trying to look up the name for that kind of partitioning, I came across this article on ZDnet.. <--- Confirmation.

Thanks again for your time on this. :) 



Now, I could use the detailed opinions of some server-side specialists on this.

ANYONE?
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June 20, 2011 9:41:16 AM

Does the price include a multi year management and servicing contract ?

12 cores and 24 threads is probably the definition of over kill for 3 users . Was there a demand for headroom? Is the company going to employ 23 more people in the winter? etc
The additional OS set ups will be related to the VM's . Each has an independent and probably individually licensed OS





A simple way to find out the answers to your question :
Have your friend write a brief description of the requirements of the business server , and then email it to 3 or 4 other IT providers in your region for discussion and quotes .
If they all come in at half that its going to be a bit obvious ............
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June 20, 2011 10:12:58 AM

As far as I know, the price doesn't include additional service or management contract beyond initial setup of server. Seriously.

As for the OS setup, yeah, I did understand their intention was a multi-VM arrangement. But, do you see the need for any virtualization, given the business situation I described? I'm not seeing it.

Thanks.
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June 20, 2011 12:16:30 PM

Yeah, this system is overkill. As someone who does this, let me provide a possible reason for some of the overkill...

First, all system design should account for any and all reasonable growth over a 5 yr period. Don't want to be replacing a server before it's been amortized.

The drive system... not bad. A good sized mirror for the local OS and possibly the exchange system, the RAID5 for the data and the Hyper-V guests.

Hyper-V\Virtualization - a great way to provide remote functionality and better control and support. I support 2 offices myself where I used a beefy server and provide all remote services via VMs. This is especially good if they are running a DB app. Let it run in the VM (locally from app to data) rather than the app processing data over a slow link.

SBS is a good choice for a small office as it has the Exchange server bundled in at a very reasonable price.

The labor to install it seems way over inflated. I just recently did a similar job for a Financial Planning firm, a server good\big enough for 5 users, with 4 of them having remote VMs, 1 piece of specialty software running on it's own VM (rather than a separate\small server) setup and training came in at a litle over $9000 total (hardware and setup).
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June 20, 2011 1:11:37 PM

Yeah, they've been scammed. Massively.
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June 21, 2011 5:40:16 PM

Seriously overkill, there is like 3k in hard drives. 15k RPM is completely unnecessary. They only times I ever run 15k drives is on SQL servers or heavy use Terminal Servers. I have never installed a 15k drive in an SBS box.

$7k install is also very high. We generally figure 40 man hours for a SBS server install/migration which equates to about $4800.
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June 23, 2011 4:13:08 AM



THANKS EVERYONE !!

ALL YOUR FEEDBACK HELPED A LOT TO PUT AN END TO THIS KIND OF NONSENSE: MY FRIEND'S BOSS CAME DOWN HARD ON THEM, DEMANDING JUSTIFICATIONS FOR THESE EXPENSES, FINALLY, AFTER YEARS OF SIMILAR "OPPORTUNISM" ON THEIR PART.

I might as well attach their name to this fiasco, as a warning to others thinking of using their service:

They are "Progressive Technologies", operating in the Hilton Head, SC and Bluffton, SC area.

And from the above, very reasonable responses, it is obvious that they do take advantage of their clients. Be warned.
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June 23, 2011 4:23:29 AM

Well I am glad you got it sorted out. I assume you will be finding a new IT provider?

Glad we could help and be sure to drop by the forum with any more questions.

Cheers, Striker.
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