I have heard this a lot over the years, in one way or another – “The only price that really counts is what I actually pay for my server.”
Alright, so why bother with a TCO analysis? The truth is that server acquisition costs only contribute 20% (or less) to a 3 year server TCO. Management and other OpEx costs contribute the remaining 80%. If you go to 5 years, the acquisition cost starts to fade into obscurity.
There are a number of studies you can find online that call out server acquisition cost at 15% to 17% of TCO, or even less. One is an Information Week report that quotes a 2007 IDC study. The Information Week article is very good, with multiple sources and definitely worth a read. Since 2007 there have been myriad improvements in processor performance, as well as, server and architectural innovations (Cisco UCS). All of these supply ample rationale for a low CapEx component for Server / Data Center Total Cost of Ownership, see the figures below.
[The WW Server Related Spend… chart is from IDC, “New Econmoinc Model of the Datacenter”; IDC 2011] [Only the graph is from the cited source, the table is my analysis of the numbers presented by the graph.]
Summary of the figures above:
Server purchase spend and associated power & cooling spending is flat (red and green bands above)
Physical server management cost is the down (blue aband bove)
Virtual server management cost are way up and increasing (orange band above)