How Much Should A Home Server Cost?
The big unanswered question with Windows Home Server is how much it’ll cost you to get one. I’m going to try to answer that question, based on the minimum system requirements:
Let’s start on the OEM side, by looking at the offerings from Dell, since its pricing can be somewhat reliable, and usually at the severe low end of the pricing spectrum. Also, lets assume we are buying a system with a 64-bit AMD Sempron processor, since those are being quoted for the HP reference design, and are both cheap and future-proof.
Dell’s cheapest possible Dimension PC meets the Home Server requirements, and features:
| Processor | AMD Sempron™ 3400+ (2 gigahertz core) |
| Operating system | Genuine Windows® XP Home Edition |
| Memory | 512MB Single Channel DDR2 SDRAM at 533MHz - 1DIMM |
| Hard drive | 80GB Serial ATA Hard Drive (7200RPM) |
| Optical drive | 16X DVD-ROM Drive |
| Price | $359 |
Now, for comparison, a similar system by a system builder in my area, ComputerNYC (I have no idea if they are any good):
| Processor | AMD Athlon64™ 3500+ (2.2 gigahertz core) |
| Operating system | Genuine Windows® XP Home Edition |
| Memory | 512MB Single Channel DDR RAM - 2DIMM |
| Hard drive | 80GB Hard Drive (7200RPM) |
| Optical drive | 16X DVD-ROM Drive |
| Price | $482 |
The Dell system is a slightly better deal, however, the ComputerNYC system can be ordered without an operating system for $92 less ($390) and comes with a faster and better processor, so I’ll call it a wash. It seems like a simple matter to get a Windows Home Server capable system for $400, with Windows XP. The kicker: Home Server is an operating system, and you’d have to replace Windows XP with Home Server, which presents an entirely different set of problems.
We can assume Dell will only offer Home Server initially on some configurations, probably taking a high-end route and only letting you buy with a ton of hard drive space, a unique case, and more expensive hardware. As a result, don’t expext to find it on their cheapest PCs. System builders, on the other hand, will usually do whatever the hell you want, even sell you Home Server without a PC. Windows Media Center was only supposed to be sold with a PC or an upgrade, and some stores sold it with an “upgrade” of a power strip. Cute.
Lets compare some Microsoft operating systems, as priced at Newegg:
| Product | Price |
| Microsoft Windows XP Home With SP2B 1 Pack - OEM | $90 |
| Microsoft Windows XP Media Center Edition 2005 w/SP2B - OEM | $110 |
| Microsoft Windows XP Pro SP2b 1pk w/Upgrade Coupon for Vista - OEM | $140 |
| Microsoft Windows Server for Small Business 2003 with SP1 5 Client - Retail | $410 |
| Microsoft Windows Server 2003 R2 Standard Edition 1PK OEM | $680 |
| Microsoft Exchange Server 2003 Standard - Retail | $1180 |
Pricing for Windows Storage Server, a very different but similarly-useful product, is estimated to be between half and equal that of Windows Server Standard. I’m going to estimate it at $300-400, based on current Microsoft products but if Microsoft is smart, a price equal to that of Vista Home Premium at retail the sweet spot at which it will be a good seller is $150 higher than XP/Vista Home, or about $240, making the cost of our fictional system builder Home Server at:
Total: $632
With a gigabyte of storage coming to about $400, and some people having hard drives lying all over the place (and keep in mind, external drives work just as well), I’d say $600 for a base Home Server and $1000 for a 1-terabyte Home Server to be right in the sweet spot. Now, the question to be answered in the future is: Can I build a system for less than $390, and buy Home Server elsewhere? If any of my readers want to answer that one, I’d be very interested.
update - fixed typo
update - clarified assumption on price of Home Server OS
I’d hate having to buy a gigabyte of storage from you. Imagine how much a terabyte would cost! Over 400,000 dollar*!
*) My definition uses binary based units.
Comment by Tim | January 8, 2007
“…I’d say $600 for a base Home Server and $1000 for a 1-gigabyte Home Server to be right in the sweet spot.”
Should that be terabyte, or are you talking about RAM?
I can’t see myself getting one of these anytime soon, however. Sure, I’d love it, but the rest of my family could (and usually do) share an 60GB drive on the same computer. A terabyte’s worth of space would be just a little overkill when the last backup I made of their important files fitted on a single DVD!
Comment by Benedict | January 9, 2007
>>With a gigabyte of storage coming to about $400, and some >>people having hard drives lying all over the place (and >>keep in mind, external drives work just as well), I’d say >>$600 for a base Home Server and $1000 for a 1-gigabyte >>Home Server to be right in the sweet spot
Do you mean terrabyte here?
Comment by Fred Beiderbecke | January 9, 2007
Your math is wrong. XP OEM = $90, and although Vista Premium (that’s Media Center Edition) RETAIL may be $240… that $110 XP Media Center OEM comes with a free upgrade to Vista Premium. What I’m trying to get at is that the Vista Premium OEM price right now is effectively $110 … and maybe $15-$20 more if you want media.
I’m pretty sure the cost of SMB server is irrelevant here. The only thing in any of this which could lead to a high price is that some of the features require your desktop(s) to have Vista Ultimate …
Anyway, if there’s a Microsoft Partner out there willing to charge $1000 for a headless “home server” while they’re selling Vista boxes on the next shelf for $370 (yes, that’s the price for that Dell system with a *free upgrade* to Vista) I’d like to be the first one to wish them a good life in their next career.
I’m very excited about the features in WHS, but consider this:
* Half of those features work without the special server OS on plain old Vista
* That $370 box includes Vista Home Premium (read Media Center) which would mean if you just share out folders on it, you can still use that same server for watching movies …
* Linux-based servers can do most of this too… even simple NAS ones which cost under $200 without drives.
I think MS will be up for a really hard sell if they try to sell servers that cost the same as a second PC…
Comment by Joel "Jaykul" Bennett | January 9, 2007
Joel, my math is not wrong, I was just trying to communicate a theory, and I realize that my sentence communicates it poorly, so I’ve rewritten it. Any assumption on pricing for Home Server is just theory, and I still view $240 as a sweet spot for the software.
I was attempting to compare the costs of various Microsoft products, in order to determine what Home Server might cost. I can’t think of a better method without additional data of finding a price point.
A 1-terabyte server for $1,000, with prices coming down over time? I call that a good deal, and I’m surprised you don’t.
The $370 box has XP Home, not Media Center, which isn’t eligible for a free upgrade. An Express Upgrade for XP Home is $50 for Home Basic (which doesn’t have Media Center) and $80 for Home Premium (which does).
Linux servers can do a lot of this, but they can’t do Microsoft’s virtual RAID (I believe), which by itself could be the killer feature.
The final verdict: The servers cost as much as a regular PC because they are designed for homes that have multiple PCs. If you own four PCs and an Xbox 360, a $1,000 1-terabyte server is a good deal, if you ask me.
Comment by Nathan Weinberg | January 9, 2007
I agree with Joel, the price of SMB is not important. In fact neither is the price of Vista. This device is designed as an addon for homes where people already have Windows PCs, the pricing should be independent of that of Vista.
Comment by Mark Fox | January 10, 2007
I would expect to pay max $299 for a plug-and-play 250GB headless server appliance running Windows Home Server. You should work software price backwards from there. If it’s affordable and a no-brainer everyone will buy. If it’s expensive it simply is no longer a no-brainer. Enthusiasts are going to do the math, and even if it’s better/easier than any other solutions on many levels, if it’s expensive, none of that will matter. Non-enthusiasts are going to look at these just as they do modems/routers/NAS/hard drives, they are peripherals, not PCs. You guys are going to shoot yourselves in the foot if you price the software at more than half the price of your current home OS.
Comment by Mark | January 14, 2007
I’m confused, I see home server as the solution to how to view MCE recordings on all home machines, but I see you crossed out Media Center Extenders…and I see in another blog here: http://blogs.msdn.com/jpapiez/comments/1434938.aspx
where he says it isn’t viable for media center recordings.
What gives?
Comment by Jim | January 29, 2007
If Microsoft prices the WHS more than Vista then it might just as well forget about selling it to the adverage home user. Why pay a high price for it when you can use an old computer and some free back-up program from Google and have just as good a system for less than half the price. Microsoft always puts a high price tag on everything it makes. Most of us are fed up with Microsoft anyway. A good selling price for WHS should be no more than $150. Period
Comment by Jim | January 31, 2007
Jim, the Home Server will not stream to Media Center Extenders, but it will stream to regular media receivers. Luckily, many Media Center Extenders do both, so you could record to a Home Server, stream to an Extender via your regular PC (not the Home Server), but if the regular PC is not available (like if it is a laptop), you can switch the Extender over to media receiver mode and stream straight from the Home Server. We won’t know for sure until the product goes public beta, but I suspect the Xbox 360 will be able to do exactly what I just described.
Comment by Nathan Weinberg | February 6, 2007
Who says you have to start with a terabyte - no need. You buy more drives as you need more space. If you want to really reap in all the benefits of this new homeserver generation you need to have a motherboard that has the “right” disk controller on it!
Comment by Rolf | February 6, 2007
Actually, Rolf, the advantage of Home Server is that you don’t need the right disk controller to take advantage of it. Home Server doesn’t need or use a RAID controller, it creates a virtual RAID that combines normally incompatible drives, including USB drives, into a full RAID-type system, without the RAID controller! It’s pretty cool, and you should check it out.
Comment by Nathan Weinberg | February 6, 2007
Less $$$ is better from a consumer prospective. However, what would I pay for Windows Home Server, well it cost me over $200 for Windows XP Pro and about $240 for 2 120GB drives and about $1000 for 4 250GB drives. Since the 2 drives are running Raid 1 and the 4 drives are running Raid 5 I am wasting 370GB worth of space. So I’d pay $200 just to get the wasted space back, then pay another $50 to make back-ups and remote access easier to manage.
As a comparison, I paid $1000 for a 250GB Mirra home server over 4 years ago to automatically back-up important files and folders. Since WHS has many more features then the Mirra I’d likely pay up to $250 just for WHS software as long as it is as easy to use as is being suggested and probably a $1000 for a complete solution.
Comment by Jef Kennedy | February 7, 2007
I’d be surprised if the price for a basic, say 500gb device was over $500. Dont forget the prices you see are retail. If I can build my own 1TB version for less than $500, manufactures can do it cheap too. These arent PCs, no need for sound and video, its a case, motherboard and basic cpu(no need for dual core) some ram (again, its a file server/backup agent) a dvd player and of course hard drive, and space to add more hard drives.
Also, if it costs more than a basic PC, most people won’t be interested.
Comment by Steve | July 31, 2007