Regards,
Molly

The thing is, we were a rapidly expanding and incredibly successful hedge fund (one of the top 10 in the US) with at that time, about $2billion US AUM. We had no budget at all, bought the best available. To this day, a new hire (this is before trader requested hardware) whether its a secretary or trader is almost a 10k layout. Desktops were DL360s which used cat5 extenders from Mighter ($1k per transmitter receiver pair). We were moving to new office space so we wanted the most bleeding edge stuff not to mention it was a 100% parallel construction. Not a single piece of hardware was going to make the trek from downtown to midtown (even vendor equipment). We wanted to reduce the amount of equipment under desks to minimize a high frequency stat arb trader accidentaly spilling something on his machine or kicking a cord out
and having the markets move away from him. Basically we made it impossible for a trader to blame his losses on technology.

We were heavy on solaris and intel, and would buy whatever a new trading group needed to run their strategy. Our sun number for the new data center was HUGE.. We never had a problem with Sun as we were the focus of several case studies which helped to fortify their place on the trader desktop as x86/linux started to become viable competition. Since we were so Sun heavy our wintel servers were few or mostly vendor owned, and our Proliant 6000s running netware 3.12 at the time (freebsd later) NEVER went down until our generators and UPS gave up a few days after 9/11 (we were in 111 bway too.. so thats an impressive feat) so we were shopping for a new relationship.

Compaq blew us off many times ,the rudeness increased with each attempt. I dont think the concept of servers being used as workstations sunk in until it was too late. Being in shock from that, we thought that IBM would take rejection to the next level, but we had to give it a shot as our other choices were slim (dells offerings werent that impressive to us back then) but they pleasantly suprised us. They won our $6 million purchase and threw in a full closet of spare parts and memory that allowed on-site reps to come whenever it was convenient to diagnose/replace the hardware, assisted us in getting a Microsoft software package and benefits normally afforded to much larger companies, access to IBM test facilities to experiment with new/alternative applications and infrastructure, and like a 50 pack of IBM training vouchers for almost any technology.

Over the years our relationship soured, especially when the 1U xseries of servers started to experience severely high rates of failure. Compaq/HP had been waiting in the shadows at that point and stepped in to stepped in to save the day although like IBM had a hard time fulfilling our orders in both competetive price and quantity (this phenomenon still boggles my mind). CDW then stepped in (whom I also used in a later job at a software company who shipped hardware with its system) and was also to match vendor perks in a much more useful way. It also helped greatly to be able to order a 48 port Cisco catalyst blade with each rack of servers I ordered not to mention the various software licenses those servers would require. They even allowed me to upload my ghost images for various machines and specify which servers would require what image, hostname, ip address, etc so that I only needed to install and configure my company’s application and nobody elses. They maintained all my hardware and software inventory in a database along with my purchases so that I could run monthly/quarterly reports for our accountants and perform advanced queries on the data so that we could figure out other methods to charge for our services which proved to be invaluable when we started offering hosted ASP versions. It allowed us to charge more for users who consumed more CPU, DB queries, and Market data than simple buy low sell high type customers.

I’m no longer in a role that worries about hardware and software purchasing, but I am working on a product of my own now and looking to do a real business plan in hopes of seeking venture capital. I’m sure I wont get the deep discounts my employers did, nor do I hope to ever need to (I’m heavily leveraging virtualization for redundancy and scalability), but my core infrastructure will cost a pretty penny and I will definately give my old rep a call to see what he’ll be able to do for me in both Sparc and Wintel arenas.

Jonathan’s weblog

I’ve read your story and have a question which looks like others above have not asked. Your story mentiones you’re a startup company (corp or commercial) but also mentioned getting or requesting educational discounts/pricing as if a University is purchasing?

Companies normally do not view educational discount based on the type of usage a server will have but edu pricing is determinied if the buying organization is a qualifed institution or not. That being the single cocktail napkin version as there’s other variables but for this situation… I’m wondering if by chance that HP & Sun had passed your lead to the wrong business unit or wrong channel partner as commerical/corp/business units can not provide education/University products/pricing for a corporation. Also for channel partners, not all channel partners offer the same products. I’m from the software industry so for the software market, there could be partners focused with Gov only, Gov & Edu and others with Commercial… If a partner does all of the above, then they would have seperate business units that handle the vertical markets as well. If the education pricing request wasn’t in your call, i’m wondering if that would have yielded a different outcome w/ Sun & HP.

just my 2 cents.

I just completed purchase today on 35 new dell servers, ibrix software, and some 22 TB of storage, and I had the EXACT same experience you did.

Man, I wanted Sun gear, more than anything. Or HP. On the systems we were buying, after I pressed the hell out of it, I got HP down from 3700 a unit to 3400 or so. For the EXACT same hardware, Dell offered me (end of quarter) less than 1500 bucks. Crap, disposable servers anyone?

And Sun! SUN! I never could get ahold of a quote from anyone.

Ever.

Honestly, I ended up buying from Dell because they didn’t actually have any competitors.

This is the third time this has happened, to the tune of over 850k in purchases over the last 2 years.

Anyways, whatever. Nice article. I hope the guys from Sun read this (more than the 1 guy above), as here in startup land the only reason they’re not selling servers is because I (and apparently you too) can’t actually order them, which is a very, very stupid reason to be losing marketshare.

-Ghee
Now I understand why the great products and prices Sun offered are not necessary being picked up by the market place