The thing is, hosting takes commodity parts (where most of the 'economies of scale' are available almost at the retail level) and uses those parts to provide service. The barriers to entry are small: one really good SysAdmin and enough money to rent a full rack with power and servers.
see, I think that if you buy less than a full rack, sure, you get eaten alive. But if you can fill a full rack and 1 30A 208V circuit, the savings as you buy more space diminish. Again, hosting is a commodity, and most of the economies of scale are available almost at the retail level. (in this case, from what I've seen the full rack with 1 208V 30A circuit is about the minimum you need to buy to get a reasonable price, but buying 10 racks like that doesn't get you much of a discount.)
SysAdmin time... well, really you need at least 2 SysAdmins, for reasonable coverage, but one can be less experienced (but still very, very careful!) Now, two sysadmins can handle more than one rack, so you do gain benefits if you scale out the capacity to what your two guys can handle.
Look at amazon EC2, they are still charging $70/month for 1.7GB ram. That was a pretty good price, in 2006. Think about how many of those you can fit on a $4000 dual quad-core system with 32GB ram. that's a lot of money.
From what I have seen consulting for large companies, they don't get a discount on hardware or people, either. Sure, they might give dell millions of dollars, but I pay $1.5K per 32G box less just 'cause I buy motherboards with 16 ram slots and use 2gb modules, while the dells use motherboards with 8 ram slots, requiring expensive 4GB modules.
And SysAdmins, well, from what I have seen good people are much cheaper for small companies (at least in part because small companies can hire people and then easily fire them if they aren't that great.)
What is your opinion of Rackable, iDataplex, and the secret Dell cloud servers? Supposedly these are really cheap but can only be ordered in large volume (like 10 racks).
I don't know, I haven't used them. It's possible that they really are cheap, but I kindof doubt it. From what I have seen at large companies, purchasing decisions are first filtered based on what companies are willing and able to jump through the 'preferred vendor' hoops, and then largely decided on whoever gives the best kickbacks (or whoever has the best 'relationship' with the otherwise powerless middle manager making the decision) rather than on price or other objective concerns. Maybe I am wrong, and there really is information being exchanged that I am not seeing. I'm just saying how it looks from the point of view of a consultant brought in to advise on the technical suitability of the servers.
I worked at a company that bought large volumes of servers from rackable a while back, (as a SysAdmin, not a consultant) and I don't know about the price, but the support was pretty good,
The thing is, hosting takes commodity parts (where most of the 'economies of scale' are available almost at the retail level) and uses those parts to provide service. The barriers to entry are small: one really good SysAdmin and enough money to rent a full rack with power and servers.
see, I think that if you buy less than a full rack, sure, you get eaten alive. But if you can fill a full rack and 1 30A 208V circuit, the savings as you buy more space diminish. Again, hosting is a commodity, and most of the economies of scale are available almost at the retail level. (in this case, from what I've seen the full rack with 1 208V 30A circuit is about the minimum you need to buy to get a reasonable price, but buying 10 racks like that doesn't get you much of a discount.)
SysAdmin time... well, really you need at least 2 SysAdmins, for reasonable coverage, but one can be less experienced (but still very, very careful!) Now, two sysadmins can handle more than one rack, so you do gain benefits if you scale out the capacity to what your two guys can handle.
Look at amazon EC2, they are still charging $70/month for 1.7GB ram. That was a pretty good price, in 2006. Think about how many of those you can fit on a $4000 dual quad-core system with 32GB ram. that's a lot of money.
From what I have seen consulting for large companies, they don't get a discount on hardware or people, either. Sure, they might give dell millions of dollars, but I pay $1.5K per 32G box less just 'cause I buy motherboards with 16 ram slots and use 2gb modules, while the dells use motherboards with 8 ram slots, requiring expensive 4GB modules.
And SysAdmins, well, from what I have seen good people are much cheaper for small companies (at least in part because small companies can hire people and then easily fire them if they aren't that great.)