I am curios to find out if Dedicated Server providers buy or lease their servers. I understand the financial implications of both methods, I am merely interested in seeing how these companies deal with equipment costs. Also, where do these providers get there servers from?

1) Directly from the large manufacturers (IBM, Dell, HP/Compaq etc.),
2) Resellers of these manufacturers (CDW, Ingram Micro, etc.),
3) 3rd party manufacturers (no name servers)
4) Build there own boxes

For option 3, how well do the smaller server manufacturers honor their warranties? Any on-site support or at least overnight parts replacement?

Anyone please feel free to reply, both those that work/operate these companies and those that have experiences with them or second-hand knowledge.

Again, this is just to satisfy some curiosity and in a way settle a debate with some colleagues. I am not lookin for anyone to reveal any "industry secrets." We are not looking to go into the business as we are focused in software development and the ASP/MSP market. Thanks for any information you can provide.

We buy our hardware both directly from the manufactures and from resellers such as tech data, ingram micro etc. We base our prices on being able to amortize it within 6 months.
We have both overnight parts replacement for everything in any client locations or any of our facilities along with on site support for a majority of it.

Originally posted by zerphyte
We buy our hardware both directly from the manufactures and from resellers such as tech data, ingram micro etc. We base our prices on being able to amortize it within 6 months.
We have both overnight parts replacement for everything in any client locations or any of our facilities along with on site support for a majority of it.

zerphyte,

Thanks for the reply. I had a quick question. If you try to recoup your costs over a 6 month period (not factoring in interest, depreciation, etc.) on, lets say, a low end server that you got a good deal on for $1,500 that would come out to $250 a month. Don't most providers charge under $300 for dedicated servers including bandwidth? Usually the only thing that could bring the price higher is large amounts of bandwidth.

What part of the equation am I missing?


Thanks again for the information.

You need to factor in the costs of support, rackspace etc. We have managed to provide top of the line machines for $250/month with a small amount of bandwidth (75GB) and still remain profitable.