Setting up Xserve VPS

I've concluded that the 8-core Xserve with 24 gb ram and a 1 TB hard drive is the best fit

What brings you to that conclusion?

Assuming you're looking to do this commercially, VPS is a commodity business, meaning there are lots of people out there doing it, it's easy for users to move around, and price is often a driving factor.

Given those elements, most VPS vendors are using cheap commodity servers, typically running Linux. Apple servers aren't typically used in this area because they're not geared towards virtualization. You can do it, but only on top of Mac OS X Server (there's no 'bare metal' hypervisor around). This adds to your costs

So you have to ask yourself what's your advantage? - why are people going to come to you rather than go elsewhere?

It certainly won't be because of price. That configuration runs around $5,000.
Add to that the virtualization software. Assuming you're planning to offer Mac OS X Server as the VPS you need to add the license cost for each server at $500 each.

Let's say you expect to run 20 VPS systems off this configuration. That's $5,000 plus 20 x $500, for a total of $15,000. Amortized over 3 years, that works out to be $416 per system per month. That's before you factor in power, network bandwidth, redundancy (what happens if the server crashes?) or your time.

No one I know of is charging, or paying, anywhere close to that per month for a VPS system. For not a lot more than one month's cost someone could buy an entire Mac Mini system.

Don't get me wrong. I'm not trying to put you off. Just trying to make sure you've done the math.

As for other elements of your question...

I understand I will need a switcher (for all of the ethernet drops)

Assuming you mean 'a switch', why? There isn't an ethernet drop per VPS. They all share the ethernet port(s) on your server. You will need a switch at some point if you have more than one physical switch, but you don't need it for a single machine.

I am just looking for things that might make the whole system run smoother.

Well that one disk scares me. What if it fails? All your VPS clients are going to be hosed.
At the very least you need a second drive to enable RAID 1 mirror to protect against disk failure. I'd also look to add a second power supply, just for the same reason. Even better would be some kind of backup system so you can restore your VPS systems if something goes awry.

will the one hard drive slow down the VPS'

That depends entirely on what each VPS is doing. If none of them are doing any disk-intensive work it won't make any difference. If they all are then yes, it will be a bottleneck.

According to Apple, the unlimited-client version of Mac OS X Leopard Server can be installed as many times as I please.

Really? Please show where you're seeing this, because it's not the case as far as I'm aware.

Indeed, as far as Apple's Mac OS X Server License agreement is concerned:

This License allows you to install and use one copy of the Mac OS X Server Software on a single Apple-labeled Computer. You may also install and use other copies of Mac OS X Server on the same Apple-labeled computer, provided that you acquire an individual and valid license from Apple for each of these other copies of Mac OS X Server Software.

Therefore, you can run multiple copies of Mac OS X Server, but you need a separate license for each one.

I can set the price lower because I don't have many expenses (I'm still in high school).

OK, that accounts for your time, but it doesn't affect (much) the cost of the equipment, licenses, bandwidth, power, etc. As far as I'm aware, network providers don't have a student discount, neither does the power company 🙂

I was told about the switcher from an Apple Chat representative (guess I don't actually need it).

It's a 'switch', not a 'switcher', and it is needed if you have multiple machines, but not necessarily for a single machine.

So if I'm understanding you correctly, I need a mirrored drive and a dual power supply.

At the very least, yes.

I have done the math and I can provide 1 gb ram, 500 GB transfer (@ 100Mbps), and 50 GB storage for $50/mo and still turn a healthy profit.

I don't see how you're doing this. I really don't think you're accounting for all the costs. Either that or high school math has moved on a lot since I went to school.

Think about it. Assuming all your VPS systems were running Linux (to avoid the Mac OS X Server license cost), you're still looking at around $5,000 for the hardware.
At $50 per month, that equates to 100 months income - either one user for 100 months (8 years), or 100 users for 1 month, or any other combination in between (e.g. 50 users for 2 months, 20 users for 5 months, etc). That's just for the hardware, let alone the other costs that go along with it.

Also, without a switch will I be able to run each VPS with a 100Mbps (burstable)?

What do you think a switch is going to give you? ALL VPS systems on a single piece of hardware are going to use the exact same network interface on that server. Right now that means 1 (or maybe 2) gigabit ports. Therefore all your VPS systems will share that network connection. Adding a switch doesn't give you any additional bandwidth. You have the same number of ports coming out of the server that everyone is getting funneled through.

As it happens, each VPS system will be able to burst to 1gbps, provided no one else is using any bandwidth at the time. You may be able to limit this through the virtualization software, I'm not sure.

Have you factored in the cost of bandwidth in your equation? Do you know how much a 100mpbs connection to the net actually costs? (and I"m not talking about a residential-grade connection. I talking about datacenter-based redundant network links).

and I would actually only have a 37 Mbps connection, which I understand is the equivalent of 12,210 GB of transfer. But I also understand that you can burst up to 100 Mbps with almost every bandwidth provider

You have a slightly misguided perception of bandwidth providers.
In most cases, especially in residential-grade accounts, the 'stated' bandwidth is the best, absolute-max-under-ideal-conditions, if you're downloading from your neighbor and rarely, if ever, translates into real-world performance. I don't know of any provider that offers this kind of bandwidth option. Maybe if you shared the provider you're considering I could decode their marketing-speak.

It certainly won't allow you to offer 100mbps bursting to each of your VPS clients.

And try getting 1 Gb ram, 500 Gb transfer, 50 Gb storage, with 5 IP addresses for a cheaper price than $50/mo (if you actually can, let me know).

Took about 10 seconds.

http://topcheaphosts.net/cheap-web-hosting-providers.shtml?KID=51859542876474071

Not that I'm recommending any of them, but options start at $3.50/month with 'unlimited' bandwidth and storage options. Of course, they're not really unlimited but from a marketing standpoint it works well.

I don't do IRC any more, but I'm often on AIM/iChat - camelot @ mac.com