We are going to be buying a few servers soon to co-locate and I am wondering if this is a good deal. I got offered the following from Dell.

PowerEdge 350 [Rack Mounted]
PIII 1Ghz
1GB SDRAM
2 x 40GB 7.2K RPM IDE Hard Drives
2 X 100Mbit NIC
3 years part warranty and 2 years on site support
$2,052.00

I am not sure if this is a good or a bad deal. Any help would be appreciated.

Hi Rochen,

Just my opinion but leasing servers is a more cost effective solution with good tax incentives - owning something that is outdated as soon as it is installed isn't always a good thing :-)

I presume you were planning on buying and not leasing these server(s)?

Just my 2 cents :-)

Originally posted by Dotcomsnz
I presume you were planning on buying and not leasing these server(s)?

Yes. I was just looking at my options. The reason I was going with Dell was because they are a fairly reputable company and you don't always know what hardware is going in the server if you lease. Sometimes companies put all the Dell server pictures etc. up on there site when really they don't use anything close to Dell's.

Anyway I could always lease through Dell Host but I have heard a lot of bad things about them.

RackMy.com look like a fairly reputable company and use Dell's but they only offer win2k hosting, maybe this is different if you colo with them.

Hi Rochen,

well if you lease from the big company or the reputable one, you should get what you are paying for - I didn't mean leasing from another host - I agree if you want quality you have to pay for it.

I know that most of the servers being put out today are built for well under $1000 - probably nearer $600. If you want the quality and backup and upgrades - leasing is still the best option in my opinion. Good luck with the searching :) Post an update if you decide or find someone good.

Regards

Steve

Originally posted by Dotcomsnz
Hi Rochen,

Just my opinion but leasing servers is a more cost effective solution with good tax incentives - owning something that is outdated as soon as it is installed isn't always a good thing :-)

I presume you were planning on buying and not leasing these server(s)?

Just my 2 cents :-)

There are more advantages to owning your own hardware if you want to provide quality service to people. When you lease a server you have to rely on your host to replace hardware and keep it updated for you whereas if you owned the box you could do these things yourself, assuming that you have 24x7 access in the co-location facility. Hardware that you lease is not always up to date, most of the time it's been outdated months before you decide to lease it.

This is the problem with web hosting today. Hosting companines are worried about saving a buck or two rather than providing quality services.

Hi There,

I did not mean just to lease a server from another host, I think i said that above - I mean leasing from a company who specialise in leasing servers - Such as Dell themselves for instance.

Leasing a server is still better than shelling out the initial cash and having that cash depreciate- A lease is an on going tax deductable expense and works out cheaper and better in the long term.

You can still fix the stuff yourself of course should anything go wrong as I'm sure parts and labour warranties have many loopholes, regardless of whether you buy or lease.

All it means that at the end of the lease term, you either buy the equipment at a very low cost and or get supplied with the latest cutting edge technology - You can get upgrades throughout the term too - with no extra monthly fees - It may be different in the US but that's the way it works here in NZ.

At the end of the day it's up to the individual, leasing rather than buying is not just trying to save a buck... it's about being profitable, that's why we are in business?

Anyway, that's not answering Rochens question, what he asked is was the server worth the money he stated.... Lets get this thread back on track, Sorry for leading it away :-)



Regards

A lease is an on going tax deductable expense Just be aware that not all leases are tax deductable. $1 buyouts, etc are not.

I think I'm with you, $1 buyouts, you can get around those by having someone else buy the equipment at the end of the term, and then you buy it from them - The Tax dept don't like the buy out you are right.

OK, anyone know if Rochens server was a good price or not?

Seems like a good deal Rochen?

Filling out the application server tier, Dell in February will begin offering its PowerEdge 350 server. A 1U (1.75 inch) high, rack-mounted server, the PowerEdge 350 is meant for infrastructure deployments and will list for $1,499. Prior to that, Dell in January will begin shipping a PowerEdge 1550 server. Also an 1U server, the PowerEdge 1550 is intended to provide high performance and is the first Dell server powered by a 1GHz Intel processor, Austin said. The 1550 will retail at $2,599.


Taken from http://www.infoworld.com/articles/hn/xml/00/12/05/001205hndell.xml

Depending on how much disk space you need, I would suggest the 1650 over the 350. It's not much more money and is a smoking machine. Also, buy the base server from Dell and get the additional items from other vendors. For example, you can get the same memory that Dell uses from Micron at 1/2 the price.

Dell servers are very strong and very reliable.

For example, from a Dell 1650 with a 1.X Intel Processor, 512 MB RAM, 18 GB SCSI Drive: $1,742.00

2 X 256 MB Sticks of Memory from Micron to get you to 1 GB of RAM ~ $170.00

Total price ~ $ 1,900.00.

Originally posted by RackMy.com
Just be aware that not all leases are tax deductable. $1 buyouts, etc are not.

that is not true, it depends on a few factors, how long is the contract, is the assest a fast depreciating item and a slew of other things.

Speak to your local accountant. they have these answers.


In reference to the cost of the server. I would add 1 modification to it and then the price seems right.

Add 1 more hard drive controller. and have the second drive work off of that.


now the question is, does the machine dump alot of heat ?

Mike

Mike,

$1.00 buy out leases are NOT tax deductible any more. They are consider like a loan.

Dell offers a couple of different lease plans (for example):
- Fair Market Value: At the end of the lease you can buy the hardware at "fair market value". These are tax deductible (considered operating leases) and 99% of the time FMV leases are really the only ones that are truly tax deductible.
- $1.00 Buyouts: At the end of the lease, you can buy the equipment for $1.00 and it's yours. These are never tax deductible.
- 10 % Residual Plans: Basically your residual payment is 10% of the total price. Again, not tax deductible.

Yes, you should talk to a CPA or tax adviser and they can steer you in the right direction!

Originally posted by RackMy.com
Mike,

$1.00 buy out leases are NOT tax deductible any more. They are consider like a loan.

Dell offers a couple of different lease plans (for example):
- Fair Market Value: At the end of the lease you can buy the hardware at "fair market value". These are tax deductible (considered operating leases) and 99% of the time FMV leases are really the only ones that are truly tax deductible.
- $1.00 Buyouts: At the end of the lease, you can buy the equipment for $1.00 and it's yours. These are never tax deductible.
- 10 % Residual Plans: Basically your residual payment is 10% of the total price. Again, not tax deductible.

Yes, you should talk to a CPA or tax adviser and they can steer you in the right direction!

Interesting, I have to ask my accountant. I have contract's that are custom and done with a leasing company that I've used for over 14 years on all equipment ( heavy, mobile, computers, etc...). and I've always ended up having to buy the computers at fair market value, some equipment that I have had on lease for years are about to come up and they require $1. Might be that I'm grandfathered LOL.

anyway your point seems valid. Leases with the 1.00 buy out are just another trick of the money trade.

mike

You may have been grandfather'ed in :)

The IRS changed the rules on $1.00 buyout leases a few years back because like you said "Leases with the 1.00 buy out are just another trick of the money trade"

Personally, I'd buy that same server for $1500 in a 1U or 2U form factor from SuperMicro (try MicroPro for a reseller) and buy $500 in extra harddrives, processor and memory....

my bad -i didn't see that it was to be co-located. get scsi hard drives then ;)

Good server at a good price. Dell has a great quality rack server.

Also, I agree with Rackmy. $1 buyouts are not tax deductible. I think this is the case with the 10% as well, but I am not a tax attorney.

Hi Rocher,

I know DELL is a good company, but consider this:

Supermicro 6012L
1U
Dual Integrated NIC 10/100
SICI 160
RAID support (with an adaptec 2005S)

$1175

Plus:

1 Intel Xeon 2.0GB $327
2 Samsung DDR PC2100 ECC Registered 512MB $160 each
2 Maxtor Atlas 10K III 36.7 GB 80Pin $262 each

TOTAL: $2.346 !!!

So, $300 more, but you get Intel Xeon 2.0 GB, DDR PC100 ECC Registered Memory (A lot faster than SDRAM), SCDI 10K Hard Drives, etc... also, you have a lot of room to upgrade, just buy another Xeon 2.0 GB or more memory (it have 4 slots), or buy another drive and the Adaptec 2005S ($270) and put RAID 5 on it, more performance, data security and availibility...

Also, Supermicro servers have a good reputation...

Well, just my opinion, I have researched a lot and this is my actual desition... Prices are from googlegear.com...