Need help choosing a new server? Here's how to pick the right model for your office--whatever your needs and budget.

Any machine can ostensibly work as a server, but performance counts far more here than it does for any desktop or notebook PC. After all, if your server is under too much strain, it'll slow down your whole network.

Once you notice your network is slow or erratic, don't immediately rip out your PCs, buy an expensive T1, or upgrade to Gigabit Ethernet. Take a close look at your server first: Server disk drive and RAM bottlenecks are two of the most common culprits when it comes to network performance problems.

Good time to buy
Though a quality server can be critical to keeping productivity up, many buyers have hesitated to invest in one due to the perception that they're too expensive. Good news: Server prices have been falling right along with PC prices. An entry-level model--which should be able to support 20 to 50 users, depending on how heavy your office's needs are--can now be had for about $2,500. Budget $5,000 for a really impressive system with rock-solid reliability and fast performance.

Where to shop for a server? If you've had good experiences with either Dell, IBM, or HP desktops, consider that vendor first. You'll already understand the vendor's support plans and should have a company contact that you trust. Because servers are more complex pieces of hardware than regular PCs, service calls are common when, for example, you're trying to add new hard drives to the system. If you're vendor-agnostic, shop for the right features: Quality is consistently high among the three major Intel server vendors.

Features to look for
Since disks and RAM are the biggest server bottlenecks, focus your budget on beefing up these categories before you splurge on less necessary items like fast CPUs or remote management cards.

For your PC, regular IDE hard drives are fine. But for servers expected to dish up files to multiple users simultaneously or transmit Web pages to the Internet, SCSI is a must. SCSI comes in a wide variety of flavors, but Ultra 320 SCSI--the fastest version currently on the market--is offered by all of the major vendors.

Add as many drives as you can to your system. You'll need a minimum of three to take advantage of RAID, which provides 100 percent data integrity in the event that one of those drives crashes. Note that RAID won't help if you have multiple drive crashes, so be sure to invest in--and use--a tape backup system. Expect to pay about $250 for each additional 36GB drive you add. Most entry-level servers support three to six drives, but you can always add more external storage later.

When it comes to RAM, the rule (as with PCs) is "more is better." RAM isn't terribly expensive--there's only a $200 or so difference between 512MB (the minimum you should consider) and 1GB (a good level for your workgroup server).

Once you've made these decisions, configuring the rest of the system is a snap. For CPU, don't buy a Celeron. Instead get the lowest-speed Pentium III or Pentium 4 available. (Pentium 4 Xeon machines and dual-CPU systems are only worth it if the server will be running sustained database queries.) Skip a CD-RW and DVD drive and stick with a CD-ROM; you can always read and write data over the network if you have to. You also probably don't need multiple NICs or a modem.

Finally, don't forget that tape backup unit! Starting at about $600 plus software, they're not cheap. But when you have a total meltdown (and everybody does eventually), it'll seem more than worth it.

Get support
Make sure you receive an adequate support plan. One year of warranty is standard these days. If you're not comfortable dealing with downtime, a few hundred dollars for a three-year warranty is a worthwhile investment.

Christopher Null is a freelance business and technology journalist in San Francisco. He has written for Wired, Smart Business, PC World, and Business 2.0.  He is also a veteran of numerous small businesses--including his own Internet start-up, filmcritic.com, which he has operated since 1995.