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If the server is lagging Ram has nothing to do with it. That is a CPU issue (or just a mod using way more then it should but that is still a CPU limiter that effects how much damage incorrect coding does).
Quite odd, cause Im running Unleashed server with 2 people playing without any problems on Atom D550 and 4 gig of RAM, so i5 should be more than enough imo!
the amount of cores does not help when Minecraft (is normmaly) a single thread. Its the clock speed of the single core it is running on that determines most of the processing power for it (GC, JVM, and the os are still running so having more cores can help but the clock speed of a single core is usually more important)
Still it doesn't explain how my Atom D550 (1.6Ghz) can run the server and i5 cant. Atom is low powered, low end processor, and i5 beats it in every possible way...
Do you use Windows as server btw? I use Debian Linux on my box