No one pays anything to Intel as they donate the CPUs in a HPC cluster. You are the one who thought the CPUs in a blade were 40% of the price, not I. You still have nothing to back that claim up.
When one buys servers in bulk, one gets discounts on all of it and the ratios still stay the same. Ideally for most HPC clusters, one gets refurbished chassis, HDs and adds the cheaper CPUs and 3rd party memory. Thus the CPUs are at the bottom end, yet deliver more performance per buck. Those CPUs still garner only 10% of the system cost because memory is maxed out (usually costs more than the CPUs they are attached to) and a good deal of the HPC server cost is in the ethernet/IB switch.
Besides, if you go for that type of HPC cluster, you are better off with commodity AMD64 hardware. Opterons and Xeons are cheap compared to Itanium on a performance per buck basis. The only real niche Itanium has in the HPC market is in the large sockets in a single image market. And that requires lots of expensive glue. There even you admit, the percentage of total server cost in CPUs is low.
Lastly, when IDC says that bundled software is in their server revenue, that includes the OS licenses per core and the typical RDBMS licenses and cost as well. The latter is usually far more expensive per year than the CPUs are. Oracle for example charges $13K per CPU core for their Enterprise Edition with the typical options. On a dual core Itanium Montvale, thats $26K for a $1K CPU. Annual support payments come to 20% of that, thus $5.2K per year versus a one time CPU cost of $1K.
Even if the customers pull with Oracle and HP gets a 60% or so discount over the entire server cost, the CPU portion going to Intel is still quite small. So using IDC's server revenue numbers, looking at HP's list prices for the CPU revenue percentage and multiplying them together is using two vastly different bases for your final CPU revenue estimate. Thus your estimate of Intel's IPF CPU revenue is just plain garbage.
So you see what it costs a VAR to build a samll white server box. While in the AMD64 world, that might be close to the final cost to the customer, VARs have to make money and they do it on integration costs that the customer still pays. And the necessary software add ins including the OS and RDBMS. They get a cut of those from the OEM and RDBMS maker. Plus the bundled in service contract. That all adds to the server cost and Intel gets none of it. How many VARs have you worked for?
I know how much the VARs I worked for paid for the hardware and how much we got for that hardware and the total price the customer paid. It was not unusual to pay $500K for hardware we sold to the customer for $1M on a total contract price of $12M. For an HP box with PA-RISC CPUs the CPUs fetched $38K for 4 of them (server CPUs were expensive back then) and that included the boards they were in, quite a bit of the glue required and the service and support bundled in. The CPUs themselves were likely 60-75% of that. The customer paid list price minus 40% and still was charged $60K. Those servers had max memory and quite a bit of disk. Also included were 6 high performance RF transcievers and associated hardware (3 each in two servers). Thus the CPU revenue from that $1M for 2 servers was only 2.5%. I doubt if the economics changed much with Itanium.
AI
