Servers That'll Give You An 'In' To Small Businesses

These days, no business is too small to need some server space. Even with only a handful of employees, companies need to share and back up data; they use intranets and extranets, build networked databases and share storage resources.

Entry-level servers may seem like small fries (who wants to bother with selling a $700 box?), but such servers represent a major opportunity for continuing services and support, as well as a chance to get in on the ground floor with companies that may turn out to be the next Google or Microsoft.

Slide Show: 5 Leading SMB Servers

The SMB space is growing and the entry-level server market along with it; every major systems vendor has taken notice, and all maintain entry-level product lines. Hewlett-Packard recently moved aggressively to lower its entry-level price point, introducing the Athlon-based ProLiant ML115 tower at around $500. Though IBM's primary focus is somewhat upmarket--it considers its $8,000 System i 515 Express tower an entry-level model--its Intel-based xSeries starts at less than $1,000. Even Sun offers sub-$1,000 configurations of its Sun Fire X2100 1U rack-mount server, while Intel sells "semi-whitebox" servers requiring minimal assembly for slightly more than $1,000.

"We saw year-over-year growth in the 6 to 7 percent range for SMBs, and that's been pretty consistent for the past few years," says Krista Satterthwaite, HP's group manager of industry standard server marketing. "Indications are that very small businesses are growing very fast, and probably matching that average, so it's not surprising that we're seeing a lot of demand for the ML 115. Our partners were asking us to have them available in quantity the day of the launch," she adds.

For solution providers, it can pay to be vendor-agnostic on these entry-level servers. Given the low total price of the hardware, there's generally little benefit in attempting to wring every last point of margin out of the sale unless you're buying in significant quantities, according to solution providers interviewed. As a result, it makes more sense to let client concerns drive the decision, including price point, overall reliability and even name recognition, they say.

"The clients often come to me with the hardware decision mostly made, and I work with that," says Aaron James, president of Santa Rosa, Calif.-based Voidworks Technologies. "A lot of clients ask for Dell by name because they're familiar with the product. They've probably had one in their house for six years, and it hasn't been a problem for them, so they kind of accept them as reliable. Dell's got problems, but on something like this I kind of go, 'OK, I can deal with that.'"

White boxes are also an option, but can be tricky to build cost-effectively at entry-level price points. "I used to do white boxes a lot, but the overall expense of the time wasted on them just killed me," James says. "Unless the client needs something really fine-tuned, in the end, you're really spending more time on the machine than it's actually worth."

The real value of the entry-level server for a solution provider is the opportunity it offers to provide services, support options and follow-on sales. Small businesses often have limited in-house technical resources and need ongoing access to the solution provider's expertise; the server itself is just a way to get your foot in the door. Building a simple solution around one of these servers, moreover, can be a relatively low-touch process, providing a decent return on time invested even if total revenue is modest.

"We make zero money on hardware here," notes J.R. Guthrie of Advantage Micro in Tucson, Ariz. "But then, [customers] need an engineer to go out there to do all the shares and all the installs. Then I'm going to sell a backup hard drive, software, UPSes. They'll need a firewall. By the time I'm done, I've done my job; I've protected the guy well--he's confident, he's happy, and he's spent more than he ever thought he'd spend with me."

Taber Alderman of Systems Implementation in Troy, N.Y., agrees, even when it comes to the more expensive IBM iSeries servers. "We're in the business of selling our software. The i 515's the best server available for my clients, but in the end it's a drag-along that lets me sell software and the other things I can wrap around the server," she says.

Over the long term, entry-level servers provide an opportunity to build relationships with businesses that won't always be small. Even if they don't require a great deal of ongoing support in the short term, a company that has a good experience with its first server is likely to return to the partner that provided and configured it when it's time to scale up and diversify its IT infrastructure.