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What Should A Home Server Cost?

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The big unanswered question with Windows Home Server is how much it’ll cost you to get one.

I’m going to try to answer that question, based on the minimum system requirements:

Let’s start on the OEM side, by looking at the offerings from Dell, since its pricing can be somewhat reliable, and usually at the severe low end of the pricing spectrum. Also, lets assume we are buying a system with a 64-bit AMD Sempron processor, since those are being quoted for the HP reference design, and are both cheap and future-proof.

Dell’s cheapest possible Dimension PC meets the Home Server requirements, and features:

Processor AMD Sempron 3400+ (2 gigahertz core)
Operating system Genuine Windows XP Home Edition
Memory 512MB Single Channel DDR2 SDRAM at 533MHz – 1DIMM
Hard drive 80GB Serial ATA Hard Drive (7200RPM)
Optical drive 16X DVD-ROM Drive
Price $359

Now, for comparison, a similar system by a system builder in my area, ComputerNYC (I have no idea if they are any good):

Processor AMD Athlon64 3500+ (2.2 gigahertz core)
Operating system Genuine Windows XP Home Edition
Memory 512MB Single Channel DDR RAM – 2DIMM
Hard drive 80GB Hard Drive (7200RPM)
Optical drive 16X DVD-ROM Drive
Price $482

The Dell system is a slightly better deal, however, the ComputerNYC system can be ordered without an operating system for $92 less ($390) and comes with a faster and better processor, so I’ll call it a wash. It seems like a simple matter to get a Windows Home Server capable system for $400, with Windows XP. The kicker: Home Server is an operating system, and you’d have to replace Windows XP with Home Server, which presents an entirely different set of problems.

We can assume Dell will only offer Home Server initially on some configurations, probably taking a high-end route and only letting you buy with a ton of hard drive space, a unique case, and more expensive hardware. As a result, don’t expext to find it on their cheapest PCs. System builders, on the other hand, will usually do whatever the hell you want, even sell you Home Server without a PC. Windows Media Center was only supposed to be sold with a PC or an upgrade, and some stores sold it with an “upgrade” of a power strip. Cute.

Lets compare some Microsoft operating systems, as priced at Newegg:

Product Price
Microsoft Windows XP Home With SP2B 1 Pack – OEM $90
Microsoft Windows XP Media Center Edition 2005 w/SP2B – OEM $110
Microsoft Windows XP Pro SP2b 1pk w/Upgrade Coupon for Vista – OEM $140
Microsoft Windows Server for Small Business 2003 with SP1 5 Client – Retail $410
Microsoft Windows Server 2003 R2 Standard Edition 1PK OEM $680
Microsoft Exchange Server 2003 Standard – Retail $1180

Pricing for Windows Storage Server, a very different but similarly-useful product, is estimated to be between half and equal that of Windows Server Standard. I’m going to estimate it at $300-400, based on current Microsoft products but if Microsoft is smart, a price equal to that of Vista Home Premium at retail the sweet spot at which it will be a good seller is $150 higher than XP/Vista Home, or about $240, making the cost of our fictional system builder Home Server at:

Total: $632

With a gigabyte of storage coming to about $400, and some people having hard drives lying all over the place (and keep in mind, external drives work just as well), I’d say $600 for a base Home Server and $1000 for a 1-terabyte Home Server to be right in the sweet spot. Now, the question to be answered in the future is: Can I build a system for less than $390, and buy Home Server elsewhere? If any of my readers want to answer that one, I’d be very interested.

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Nathan Weinberg writes the popular InsideGoogle blog, offering the latest news and insights about Google and search engines.

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