[SunRescue] New Sun midrange servers...

[Chris Byrne]

What truly amazes me is the margin on high end hardware.

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.

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

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

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.)

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).

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.

Chris Byrne

-----Original Message-----
From: rescue-admin at sunhelp.org [mailto:rescue-admin at sunhelp.org]On
Behalf Of Jonathan Katz
Sent: Thursday, March 22, 2001 08:35
To: rescue at sunhelp.org
Subject: Re: [SunRescue] New Sun midrange servers...


Pete wrote:
> I've got a wish list that includes the deskside Sun Fire 4800... Man, that
would
> make a nice basenji.com, with 12 procs and 96GB of RAM... <big, dreamy
grin>
> All I need is $365K for the base 4-proc/8G system, and whatever else the
other 8
> procs and 88G costs...

Yeah.. but think discount :)


-Jon
Jonathan Katz = J. Random BOFH = http://jonworld.com = jon at jonworld.com
	"Mhz is the benchmark for childhood head-injury victims."
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