The margins on the servers Amazon buys are not that high. They are buying commodity servers, not the highly redundant high end ones. With just a couple of SATA drives. No redundant power supplies, raid controllers, hotplug ram and cpu and all the other high margin stuff that makes the server business really profitable.
Apple is probably more profitable for them. There was an old story that Apple designed their computers using a Cray supercomputer, while Seymour Cray designed his supercomputers on a Mac.
> They are buying commodity servers, not the highly redundant high end ones. With just a couple of SATA drives. No redundant power supplies, raid controllers, hotplug ram and cpu and all the other high margin stuff that makes the server business really profitable.
Amazon might not be buying top of the line servers, but they're buying a TON of them, as well as service contracts for all of them. That equals a LOT of money for HP.
Apple is buying DL360 G6 and G7 servers(http://www.theregister.co.uk/2011/06/09/apple_maiden_data_ce...), which run anywhere between $2000 and $8000 each. Probably the mid-range models with a decent discount, but again, we're talking a bulk equipment and support contract.
Is it worth having service contracts if you have thousands of machines? I would have thought it's analogous to car hire companies not having insurance on their cars (because with enough cars the distribution of accident costs evens out)
Apple is probably more profitable for them. There was an old story that Apple designed their computers using a Cray supercomputer, while Seymour Cray designed his supercomputers on a Mac.