Computer Networks

It's a buyer's market for small-business servers. Here's how to untangle all the options

The first time Daniel Hunt went looking for a server for his company's computer network, he ended up buying a home computer instead. Back in 1995 the CEO of Asphalt Specialties, an $8-million construction company in the Denver area, purchased a $2,300 Pentium computer designed for home use. Nonetheless, Hunt says, the machine did a fine job as a server for the three-computer network in his office. In the traditional server market, Hunt had found few satisfying choices that he could afford. "So many of them came with all this junk, such as speakers, that we didn't need," he explains.

Times have changed. Today business owners like Hunt have more options, as major computer makers are aggressively targeting the small-business-server market. According to projections by Sherwood Research, a technology-research firm based in Wellesley, Mass., small-business-server shipments will double this year. While the big vendors rush to fill the growing niche, small companies should benefit as prices drop and ease of use increases. But although servers are getting cheaper and less complicated, they're still not exactly plug-and-play systems. Figuring out how much memory you need and what kind of technical support you should expect can be downright confusing. Before you purchase your next server, it pays to review some basics:

How do I know if I need a server? As soon as you decide to set up a computer network, you'll have to determine whether you want a peer-to-peer or client/server network. In a peer-to-peer network, computers are linked together without a central repository for applications; computers communicate with one another to share files. In a client/server network, servers function as the "nerve center," where shared applications, such as databases and E-mail programs, usually reside. Clients, or personal computers, "talk" to the server when they need to use applications. Keeping those programs on a server helps free up the clients' memory and disk space.

For companies with limited computer needs, peer-to-peer networks are a realistic option. But many experts agree that once a company's network must support 10 or more users, the cost-effectiveness of peer-to-peer networks starts to taper; at that point, access to applications can become frustratingly slow. Even companies with only 4 or 5 users may need to abandon peer-to-peer setups, says Steven Lee of Random Access Data Systems, a computer consulting firm in Needham, Mass., especially if they're all sharing a large database, for example.

What's the first step when purchasing a server? Once you decide to buy a server, it's probably a good idea to forget about the hardware temporarily and first think about the applications. "The important thing is to figure out what the heck you want to do with the machine and what kind of software you'll need," Lee explains. Sit down with the PC users in your company and discuss their software and communications needs. The list you assemble will help you decide how powerful a server to buy.

How much speed, memory, and hard-disk space do I need? All three will determine how smoothly and efficiently your network will run. There's an easy answer to the question of speed: you can never have too much of it. "Considering anything slower than a Pentium Pro processor is a waste of time," says David Thor, a consultant with Sherwood Research. The money saved on a slower processor will be minuscule compared with the frustration of having a slower network.

The minimum amount of RAM needed for a small-business server is around 32 megabytes. But consider that a starting point. Here's where your list of software needs comes in. At the high end, "compute-intensive" technology-driven companies may need 100 megabytes or more of RAM, according to Paul Bleecker, vice-president of Creative Business Concepts, a value-added reseller (VAR) in Irvine, Calif. Then there's the "communications-heavy" company, which Bleecker describes as typically needing external E-mail, Internet access, groupware--and about 50 megabytes of RAM. If your company doesn't fit either of those descriptions, consider starting with a smaller amount of memory--say, 32 megabytes--and buying more later. For each additional 16 megabytes, you'll pay about $150.

If you're not sure how much hard-disk space you'll need, a 3- or 4-gigabyte hard drive is a good starting point. Some servers aimed at small businesses come with 6-gigabyte hard drives, but 3 is the bare minimum. As with memory, you can always add more hard-disk space, at anywhere from $400 to $800 per 3-gigabyte upgrade.

How much should I spend? It's a buyer's market now. In 1996, according to a Sherwood Research survey, the average price small companies paid for their PC servers was approximately $5,600. But major vendors are going after the small-business market aggressively, and that means lower prices. This year, experts say, small businesses can expect to pay anywhere from $2,000 to $8,000 for a typical server. For example, a 64-megabyte, 4-gigabyte Dell PowerEdge 2100, which comes preloaded with network operating software, cost around $5,500 at press time.

What should I know about technical support? While the differences in hardware will be small from vendor to vendor, technical support may vary widely. Any vendor should offer 24-hour phone support, seven days a week. Some vendors charge for tech support and some don't; in either case, be sure to find out if there's a toll-free number. Your server is the heart of your company's network--if it's down, you're down--so make sure the vendor offers overnight replacement of parts. Many vendors now offer remote diagnostics, so they can diagnose a problem by dialing into your system right away, rather than sending someone to your site.

Where's the best place to buy a server? The answer depends a great deal upon your in-house computer expertise. If you have an information-systems person or an employee who's a technology wizard, you might consider buying directly from a vendor. Dell Computer Corp. and Gateway 2000, for example, let customers purchase customized servers directly from their Web sites.

Although purchasing directly from vendors is quick, it's not for the technologically timid. If you lack expertise, you may want to call the vendors you're considering and ask for a list of recommended resellers in your area. Word of mouth is another way to get referrals for resellers. But choose your advisers carefully; make sure that their companies have computing needs comparable with yours. One last hint from Bleecker: "VARs usually won't charge you for advice until you decide to make a purchase or until you start getting into detailed technical questions." Translation: There's free advice out there for the taking.

Sarah Schafer is a staff writer at Inc. Technology.


There are numerous vendors selling servers. Many small businesses buy little-known brands, but others want the stability of a well-known company. Below are some of the biggest server vendors, along with a small-business product or product line from each:

The Hewlett-Packard Co. offers the E Series of servers. For the authorized dealer nearest you, call 800-533-1333.

For information about the IBM PC Server 300 series, call 800-426-2968. For reseller locations, call 800-772-2227.

To find out more about the Compaq Computer Corp. ProSignia 200 line, call 800-345-1518.

Dell Computer Corp. offers the PowerEdge 2100 and the PowerEdge 4100. For information, call 800-388-8542.

Gateway 2000 has a special small-business section on its Web site. For information about Gateway's G62000 line, call 800-846-2042.

ASPHALT SPECIALTIES, Daniel Hunt, 9113 Quince St., Henderson, CO 80640; 303-289-8555 119

CREATIVE BUSINESS CONCEPTS, Paul Bleecker, One Technology Dr., Bldg. H, Irvine, CA 92618; 714-727-3104 119

RANDOM ACCESS DATA SYSTEMS, Steven Lee, 200 Reservoir St., Needham, MA 02194; 617-449-1677; 119

SHERWOOD RESEARCH, 65 William St., Wellesley, MA 02181; 617-416-1000; 119