[Beowulf] Re: Third-party drives not permitted on new Dell servers?

[Geoff Jacobs]

Lux, Jim (337C) wrote:
> 
> James Lux, P.E. Task Manager, SOMD Software Defined Radios Flight 
> Communications Systems Section Jet Propulsion Laboratory 4800 Oak 
> Grove Drive, Mail Stop 161-213 Pasadena, CA, 91109 +1(818)354-2075 
> phone +1(818)393-6875 fax
> 
>> -----Original Message----- From: beowulf-bounces at beowulf.org 
>> [mailto:beowulf-bounces at beowulf.org] On Behalf Of Doug O'Neal Sent:
>>  Tuesday, February 16, 2010 10:21 AM To: beowulf at beowulf.org 
>> Subject: [Beowulf] Re: Third-party drives not permitted on new Dell
>>  servers?
>> 
>> On 02/16/2010 12:52 PM, Lux, Jim (337C) wrote:
>>> 
>>> On 2/16/10 9:09 AM, "Joe Landman" 
>>> <landman at scalableinformatics.com> wrote:
>>>> 5X markup?  We must be doing something wrong :/
>>>> 
>>> 
>>> Depends on what the price includes.  I could easily see a 
>>> commodity drive in a case lot being dropped on the loading dock 
>>> at, say, $100 each, and the drive with installation, system 
>>> integrator testing, downstream support, etc. being $500. Doesn't 
>>> take many hours on the phone tracking down an idiosyncracy or 
>>> setup to cost $500 in labor.
>> But when you're installing anywhere from eight to forty-eight 
>> drives in a single system the required hours to make up that 
>> $400/drive overhead does get larger.  And if you spread the system 
>> integrator testing over eight drives per unit and hundreds to 
>> thousands of units the cost per drive shouldn't be measured in 
>> hundreds of dollars.
>> 
> 
> True, IFF the costing strategy is based on that sort of approach. 
> Various companies can and do price the NRE and support tail cost in a
>  variety of ways.   They might have a "notional" system size and base
>  the pricing model on that: Say they, through research, find that
> most customers are buying, say, 32 systems at a crack.  Now the
> support tail (which is basically "per system") is spread across only
> 32 drives, not thousands. If you happen to buy 64 systems, then you 
> basically are paying twice.   Most companies don't have infinite 
> granularity in this sort of thing, and try to pick a few breakpoints 
> that make sense.

But in this case, they're selling not 32 controllers, or whatever.
They're selling thousands or tens of thousands of controllers and tens
or hundreds of thousands of drives across the entire product line. Do
they qualify drives per system, or across the line (perhaps per
controller model)?

> (NRE = non recurring engineering) As far as the NRE goes, say they 
> get a batch of a dozen drives each of half a dozen kinds. They have 
> to set up half a dozen test systems (either in parallel or 
> sequentially), run the tests on all of them, and wind up with maybe 2
>  or 3 leading candidates that they decide to list on their "approved 
> disk" list.  The cost of testing the disks that didn't make the cut 
> has to be added to the cost of the disks that did.
>
> There's a lot that goes into pricing that isn't obvious at first 
> glance, or even second glance, especially if you're looking at a 
> single instance (your own purchase) and trying to work backwards from
>  there.  There are weird anomalies that crop up in supposedly 
> commodity items from things like fuel prices (e.g. you happened to 
> buy that container load of disks when fuel prices were high, so 
> shipping cost more). A couple years ago, there were huge fluctuations
>  in the price of copper, so there would be 2:1 differences in the 
> retail cost of copper wire and tubing at the local Home Depot and 
> Lowes, basically depending on when they happened to have bought the 
> stuff wholesale. (this is the kind of thing that arbitrageurs look 
> for, of course)

Logically, one would not see consistency in the markup in such a case.
Nor would the tier one vendors be consistently marked up at similar amounts.

> Some of it is "paying for convenience", too.  Rather than do all the 
> testing yourself, or writing a detailed requirements and procurement 
> document for a third party, both of which cost you some non-zero 
> amount of time and money, you just pay the increased price to a 
> vendor who's done it for you.  It's like eating sausage.  You can buy
>  already made sausage, and the sausage maker has done the 
> experimenting with seasoning and process controls to come out with 
> something that people like.  Or, you can spend the time to make it 
> yourself, potentially saving some money and getting a more customized
>  sausage taste, BUT, you're most likely going to have some 
> less-than-ideal sausage in the process.

They should be willing and able to convince people of the value of each
and every product they sell, and that includes justifying the
non-interoperability of their disk controllers with 3rd party HDDs.

> The more computers or sausage you're consuming, the more likely it is
>  that you could do better with a customized approach, but, even
> there, you may be faced with resource limits (e.g. you could spend
> your time getting a better deal on the disks or you could spend your
> time doing research with the disks.  Ultimately, the research MUST
> get done, so you have to trade off how much you're willing to spend.)
> 

Jim and Joe both are likely to have more of an idea of the realities
going on inside Dell than I. Michael Will likely does as well as some
others on list. However, it's up to Dell to justify their decisions to
those on list who have concerns of this nature either now  or when asked
to in the bidding process. Just like how Joe was able to explain one of
the subtle, relevant problems in system integration, all in one email!

It's as simple as that. They should be able to justify their position,
without sounding like they're high on Prozac.

Whenever there's a discussion on vendor markup, I always think on the
Audiophile scene. In particular:
http://www.usa.denon.com/ProductDetails/3429.asp
http://www.positive-feedback.com/Issue32/anjou.htm

I think I can speak on behalf of everyone that we do not want computer
hardware vendors to degrade to this level.

-- 
Geoffrey D. Jacobs