I was in a similar situation setting up a research group. Wanted an expandable setup for a research group, that would meet approval of local IT sysadmins (some remote management opts, vendor support). Per 2.6K pounds a pop I got a Dell poweredge T410 server with 2 6-core CPUs and 24GB RAM. I'm never one to push a Dell (been purchasing IBM/HP for years) but this is a decent machine for a decent price. I tried various cloud solutions using virtual machines on Amazon and similar frameworks, but for the kind of work we do (frequent software updates, massive amounts of data that need to be stored locally and can't be transferred easily), those don't scale. We use Condor as a job submission engine. Not that we don't like SGE but with Oracle's plans (http://en.wikipedia.org/wiki/Oracle_Grid_Engine) one can never tell. PS: remind you friend to invest in a QNAP NAS or similar for backups / disaster recovery.