1HotWebServer.com Prices Turn Up Heat

Last month, the Tarzana-based company came out with a 1u, 500MHz Celeron-based server priced at $299. Sean McClelland, president of 1HotWebServer.com, said the company has been selling 20 to 30 systems a week. The company also recently introduced a 1.5GHz Pentium 4 system for $650.

"[Ours is the lowest-priced system [on the 1u server side, and once these are gone, I don't think you'll see prices like that ever again," McClelland said.

The key to the price breakthrough was a deal the company got on discontinued certified-Intel chassis, he said.

Once the company goes through its inventory of bargain chassis, prices on the 1u servers will go up by about $20, McClelland said. Still, he's determined to remain a price leader.

"I think we are taking most of our market share from the branded vendors [with our low-price servers," he said.

But not everyone thinks the $299 1u server will be a market changer.

"That's a very low-end system, and they seem to be selling it below cost," said Lawrence Ling, president of QES Computers, a Pleasanton, Calif.-based systems integrator and builder.

Ling said his low-end 1u servers range from about $700 to $1,000.

"I'd be concerned about quality. Maybe they're using it as a gimmick to attract customers to their Web site," he said.

1HotWebServer.com, with annual revenue of about $3 million, sells some 40 percent of its systems to VARs, 30 percent to ISPs and the balance to appliance vendors, McClelland said.

The company's new Pentium 4 system will keep the heat on branded vendors, he added.

The new systems will come with a 40-Gbyte hard drive and a 250-watt power supply as well as a CD and a floppy drive, McClelland said.

> PRODUCT: 1u Celeron-based server
> PRICE: $299
> WARRANTY: 1 year
> AUTHORIZATION REQUIREMENTS: None
> DISTRIBUTORS/INTEGRATORS: Sold directly to solution providers and systems integrators
> COMPANY: 1HotWebServer.com
Tarzana, Calif.
(818) 344-4559
www.1hotwebserver.com