For this evaluation, we’ll be comparing:

PowerEdge R200
Intel® Celeron® Processor 430 at 1.8GHz, 512K Cache, 800MHz FSB, No Operating System. I also included 1GB of RAM, and a 160GB single SATA HDD.

Hardware Alone:
Starting Price        $749
Instant Savings        $210
Subtotal        $539

Hardware and 3 year 4 hour on-site 7/24 IT mission critical hardware / software support:
Starting Price        $2,068
Instant Savings        $210
Subtotal        $1,858

Ignoring the humor of buying a rackmount server with a Celeron… or one with only a single hard drive… I purposely chose the lowest end model to make the comparison easy, and the pricing cheap. We’re talking crappy hardware here with no real mission critical requirement. Also ignore the irony of buying mission critical support for a device that most obviously will not support mission critical requirements.

I’m comparing the PowerEdge R200 with an ‘IronSystems’ 2.0Ghz (they did not sell 1.8ghz) with 1GB RAM and 160GB single SATA HDD. This company also includes on-site service similar to Dell’s.

Hardware Alone:
Starting Price    $493.00
Instant Savings    $0.00
Subtotal    $493.00

Dell has the better warranty, with 3 years basic ‘return to depot’ included free. Iron Systems only includes a single year warranty.

We’ll also compare the price of building our own using commodity hardware:

supermicro 1u rackmount case $109.99
https://www.serversdirect.com/product.asp?pf_id=CS8380

Biostar (yuck!) motherboard, 1GB RAM, and Intel 1.8Ghz Celeron: $110.97
http://3btech.net/ince2mocowdd1.html

Western Digital 160GB SATA HDD $39.99
http://www.ascendtech.us/itemdesc.asp?ic=HDIWD1600AAJS35

Subtotal: $260.95

It is important to note that neither of the commodity servers include (or even support) an internal CDrom because of the size of the cases. What I would normally do with these devices though is use an external USB once the operating system was loaded. Most everything else that you would need to have put on the machine can be pulled across the network from another box anyhow. I am simply comparing ‘cheap’ options for rackmount servers. It is also important to note that these machines are 1/2u, which gives you the ability to put 2 of them back to back in the same rack row, doubling your density as long as you can deal with cable management. Of course, you can only fit a single hard drive in each, so there is also no RAID capability. You can also get a full size rackmount case with a 250w power supply for around the same price, and add a $45 slimline CDRom if you really need one.

Looking at Dell’s on-site service, $1319.00 for 3 years is $436.33 per year, per machine. If you’re building your own machines, you’re also saving $278.05, or an additional $92.68/year… assuming that the hardware lasts 3 years. So building and supporting your own hardware is going to save you $529.01 per year, or the cost of 2 servers.

When comparing a higher end Dell model, the PowerEdge R900… the total barebones cost was $8777 with an additional $4129 added for 3yr on-onsite 7/24 mission critical. What is notable about this is that the potential issues that exist with a crappy non-raid server are much greater than a server setup like the R900, and so Dell charges 3x the cost of the hardware to support the R200 vs. 50% of the cost of the hardware to support the R900. I know that it is covering both hardware AND service, but it seems to me that $4129 could be used to keep plenty of spare parts. Why not just buy an extra processor, motherboard, and hard drive, and take the remaining savings and budget that for repair cost? You can get replacement hardware sent to you by Dell with a much cheaper warranty.

Iron Systems has the same machine for $9046. A replacement Xeon processor will run about $1000. I did not price out what it would cost to build my own.

I did talk with a dell sales consultant, and found out that Dell really does not have a true RMA (Return to Manufacturer) process. What that means is, I can’t just get on the phone with them and tell them (as a trained and qualified hardware technician) that I’m sending a broken motherboard back to them for replacement. They have what is called ‘ProSupport IT’ for IT managers, which is supposed to give you that ability. For the above R900, ProSupport IT starts at $1000 for 3 years. Otherwise, you need to jump through a series of hoops with their phone based technicians (who are mostly in india) while they recommend you restart the server several times before they are convinced that they need to send you a new motherboard that you already replaced in order to keep your server running. I’m sure that they would prefer that the offending motherboard is still in the machine when you call so that they can do a proper assessment. Trust me, the reason I’m bringing this up is because it has actually happened to me.

The distinction is important because the process for any commodity based manufacturer is a simple request for an RMA form that you send to their RMA department along with the broken hardware. You pay for shipping to them, they evaluate the unit and if it turns out that it is not broken, you pay to have it shipped back. If they verify that it is indeed defective, they send you a new part free of charge, and free of shipping costs. If you have a replacement on hand already, there is no critical need for cross shipping or ‘in the air’ replacement, and both the manufacturer and you have taken an equal risk on the assessment and the shipping.

So, to answer the original question… ‘Is Dell On-Site Service Worth It?’. I would say no. In this case, the ‘insurance premium’ is more expensive than it is to fix the problem. Instead, purchase commodity based hardware, consistent brands for all of your hardware, and buy spare parts. Find two or three local hardware technicians that you can trust and establish an ‘as needed’ on-site service agreement with them paying by the hour based on time of day and response. Do not pay for any form of up-front monthly or annual service agreement unless it includes ongoing preventative care, offsite backup, and monitoring.