[SunRescue] New Sun midrange servers...

[Peter L. Wargo]

On Thu, 22 Mar 2001, Chris Byrne wrote:

> Okay, a fully loaded E10K for example can go for 2 million bucks plus. The
> actual manufacturing costs on it are only a few thousand, probably less than
> 10k.

Actually, I asked when I bought NCGR's 10K.  It actually costs more than
that... (I was under NDA at the time, so I can't say how much).

> The IP they have to license from other companies is minimal so I figure it's
> covered in the production costs.

I would imagine that's true - If they can offer Sol8 for free, yada, yada,
yada..

> The technology is something like seven years old at this point, and it's
> development costs were fully amortized a long time ago.

Not to mention the deal they got buying Cray business division from SGI
for peanuts.  Heh, heh...

> Selling the thing takes maybe one man months (probably WAY less. If you need
> an E10K you know it and aren't likely to need a lot of sales effort). These
> are people who make something up to 300k a year if they get all their bonus
> targets and max their commissions, so let's say 1/12th of 300k is 25k (If
> you don't believe a salesman makes that much watch Glengarry glen Ross and
> listen to Alec Baldwin's speech.)

Not as true as you think.  Our sales guy actually got hurt by the E10K, as
they raised his target for the next year.  Not like he was going to sell
an E10K a year (especially a fully-loaded one) in Santa Fe, NM.

> Let's say another 25k to help cover the costs of marketing, storage, and
> overhead for the company, in fact lets take our total, and round it up to
> say, 100k as the actual cost to Sun every time one of these bad boys goes
> out the door (I think it's a hell of a lot less personally, probably more
> like half that).

I would guess not, but that's a guess.

> At that point they are selling the machine at a 2000 percent markup. The
> only other products that sell at that kind of markup are diamonds  and
> recreational pharmaceuticals (up to 10,000 percent markup on both of those
> actually).
> 
> But if people keep buying them at that price, and they sell them faster than
> they can make them so obviously they do, Sun will keep sealing them at that
> price.

Funny, i thought it was a bargain.  When I saw the performace we got out
of ours, I was stunned.  Worth the few million, easy. :-)

Plus, as has ben mentioned before, good companies develop computers like
car makers - the cool new features start ont he high-end, where people pay
for 'em, then shift down the line.  The new Sun Fire stuff looks to have a
*lot* of the HA and domaining features of the 10K, and they are much
cheaper.  

Plus, my copy of Quake2 (solaris) still runs on 'em... :-)

-Pete