There's an educational institution that wants to have its users have some space on the internet....

They are asking for "unlimited space" which is an urban legend.

Regardless of what they would like to have, I would like to give them a strategy for expansion.

Should i just suggest a dedicated server per 500 students?
Basically all of them will be testing perl / php and doing some c development etc..
similar to a regular hosting customers, but most of the work will be done for their classes. Because many of them will use the shell to check mail and edit their files.. it'll have heavy loads.

Any suggestions on a good platform? I'm thinking Sun Enterprise, but would a cluster of 2 good lintel (linux+intel) boxes do the job?

I'll appreciate your comments. Thanks in advance.

It depends totally upon how much the students are going to be using this, and that isn't something which you can predict in advance. My old university offered free web hosting to all its 20,000 students from a single system; but they stipulated that it could not be used "for personal gain" (which basically just meant that you couldn't make any money off of it) and only a few hundred students actually took advantage of it.

Design the system to be scalable, start with one server, and then add more servers as necessary. This is a consulting contract, not a webhosting contract.

Just a suggestion, but if you want an upgradeable server, my favorite is compaq prolient 5500(retired or whatever), but take a look at em, pretty upgradeable and plenty of room for extra space./