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Sizing up new high-end machines from HP, Apple

Hewlett-Packard releases powerful new dual-Xeon workstations, set to compete with the Mac Pro, prompting a re-evaluation of the economic argument for pricey PCs.

Last week, I attended a press event in Los Angeles hosted by Hewlett-Packard's workstation business unit. Hewlett-Packard was preparing for this week's announcement of three new Z-series workstation models: the Z400, Z600, and Z800.

HP briefed the reporters and analysts with all the key details of the products (the speeds and feeds, as we say), took us to visit a couple of HP's key customers in the area, and hosted presentations by software partners and more customers.

The new HP Z-Series workstations.
The new HP Z-Series workstations. Hewlett-Packard

The workstations are very nice, especially the Z600 and Z800: high-quality dual-processor systems based on Intel's newest Xeon 5500-series processors with specific adaptations to distinguish them from ordinary PCs. Even the Z400, though based on a more basic PC-like design, uses a single Xeon processor and provides two 16-lane PCI Express Gen2 slots.

The customer visits were well chosen: one at BMW Designworks and another at DreamWorks, the movie studio that just released Monsters vs. Aliens.

BMW Designworks actually assisted with the industrial design of the new HP workstations. They're handsome machines, but not exactly pretty--certainly not in the way Apple's Mac Pro is.

More importantly, however, the HP-BMW design is functionally superior. In about the same case size as the Mac Pro, HP's Z800 has room for more RAM, more expansion cards, and more disk drives. BMW also worked handles into the design, and they work better than Apple's.

The difference in RAM is quite substantial. It isn't just about the slots (eight in the Mac Pro, twelve in the Z800)--but even more in the fact that HP supports 16GB dual in-line memory modules (DIMMs), while Apple's machine goes only up to 4GB per slot. That's 192GB for the HP and 32GB for the Mac.

To be fair, HP is merely promising to offer 16GB DIMMs by the end of 2009; you can't get them today. Apple rarely preannounces anything, so it's possible that the Mac Pro will support more RAM by then, but HP's advantage in slot count should keep it on top.

More RAM can often give more performance than a faster CPU, especially in memory-hungry engineering applications. If the software overflows the physical memory and must start using virtual memory, performance can plummet.

These are very nice machines. But they're also expensive. The Z800 starts at less than $2,000 (actually a good bit cheaper than the Mac Pro's entry price), but most buyers will aim higher. In fact, it's no big deal to spend $10,000 or more on a high-end workstation.

Does that seem like a lot of money to spend on a PC for business use at a time when many businesses are struggling? Quite the opposite, I think.

The truth is, the cost of a superior PC is almost trivial, compared with the value it can generate in the hands of a highly skilled designer.

HP tried to make this point in its presentations at the event, but it was very conservative in its figures. First, it assumed that the total cost per employee (including salary, benefits, office space, management overhead, etc.) was just $60 per hour, which is very low. Second, it shouldn't have been using a cost model at all!

The more useful basis for this analysis is revenue per employee, which can easily exceed $250 per hour for the kind of workers who can make effective use of a high-price workstation.

For an employee generating this kind of value, a $10,000 workstation justifies its purchase remarkably quickly. Even if the employee's productivity improves just 10 percent, the payback period is a mere 10 weeks.

It's worth thinking about what it takes to generate a 10 percent improvement in overall productivity. It isn't just a matter of computer performance, but performance helps. These new HP workstations are much faster than the older models, due to the combination of the faster CPUs, faster and more RAM, and a new generation of professional graphics cards from Nvidia and Advanced Micro Devices' ATI.

Performance relates to productivity, in terms of how much time the user spends waiting for the computer, so that's what to look for. Assuming that the software is working as well as it can, and the user's work habits are reasonable, processing delays for engineering visualizations, animation previews, circuit simulations, and similar tasks can really add up.

So it's no surprise to me that there's still a market for pricey dual-processor workstations.

What does surprise me is that there aren't more companies trying to rebuild the market for super high-end workstations.

SGI, in its glory days, used to be able to sell some pretty amazing machines for professional users. I have an SGI Octane workstation that originally sold for over $50,000. That seems like crazy money, but even a $50,000 workstation in the right hands could still pay for itself in less than a year, a reasonable return on investment.

Alas, SGI went bankrupt again this week and then promptly sold itself to Rackable Systems for $25 million plus the assumption of SGI's debts.

I'm sad that SGI is gone, but it wasn't the workstation business that killed the company, and the numbers show that market niche still exists. HP could occupy that niche, if it chose, as could any company that makes four- and eight-processor servers, which share most of the same engineering issues.

Some small companies, such as Boxx Technologies (which I wrote about last summer in "Boxx fills in for a failing SGI") and HPC Systems, make bigger workstations, but both of these vendors' product lines are stuck with AMD Opteron processors at the moment, which are no longer performance-competitive with the new Xeons.

Later this year, new multiprocessor-capable Xeon processors will arrive that could reinvigorate the super-workstation market, and I hope that some of these companies step up to the challenge. I believe that there's some good money to be made there, and the rest of the world economy will benefit at the same time.