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I assume this is going to be an always on machine, is the data going to be on here as well or a separate network drive? I'd be tempted to go for something like the HP Microserver, they're proven and very stable http://www.ebuyer.com/722189-hpe-proliant-gen8-g1610t-4gb-ram-microserver-819185-421 and cheap to buy and run.
This should be able to cope with transcoding single 1080p streams but if you're intending to look at 4k or transcoding multiple streams you'd need to look at something more powerful.
You can install Windows or Linux or whatever on there
I know nothing about building computers, so i'm looking for some guidance...
I'm specing up a computer to run a plex server (this is all it will do, nothing else). I would prefer it to run windows as I can at least trouble shoot that, but beyond that I don't really know what I am looking for. Idea is to minimise the cost as well as ongoing running cost, so want something that can handle the transcoding but isn't massive overkill, anyone got any good starting points?!