Tag Archives: servers

Served Up

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The trend toward “do it yourself” servers among the major Internet and social media companies reinforces the end-customer’s position at the top of the electronics supply chain.

Google, Facebook and other major dot.com companies are migrating away from off-the-shelf equipment in favor of custom-designed and built machines that better meet their specific needs. While the trend — custom-built servers now make up 20% of the US server market, according to a recent report by research firm Gartner — isn’t completely new, it is now affecting the bottom lines of H-P, Dell and other OEMs that live in that space.

Moreover, Google and Facebook are employing large numbers of hardware designers, once again taking the top talent away from the manufacturing floor (the companies then outsource the actual product build). It could also change the services model: Will repair be performed by the major EMS companies, or by local or even internal specialists?

I suspect the major server makers will try to adapt their product lines, but the question remains whether the Googles of the world will let them far enough through the door to get a good feel for the technology needs, or whether the major dot.coms become mini-Apples in which paranoia trumps partnering.

Served Up

Posted on by

The trend toward “do it yourself” servers among the major Internet and social media companies reinforces the end-customer’s position at the top of the electronics supply chain.

Google, Facebook and other major dot.com companies are migrating away from off-the-shelf equipment in favor of custom-designed and built machines that better meet their specific needs. While the trend — custom-built servers now make up 20% of the US server market, according to a recent report by research firm Gartner — isn’t completely new, it is now affecting the bottom lines of H-P, Dell and other OEMs that live in that space.

Moreover, Google and Facebook are employing large numbers of hardware designers, once again taking the top talent away from the manufacturing floor (the companies then outsource the actual product build). It could also change the services model: Will repair be performed by the major EMS companies, or by local or even internal specialists?

I suspect the major server makers will try to adapt their product lines, but the question remains whether the Googles of the world will let them far enough through the door to get a good feel for the technology needs, or whether the major dot.coms become mini-Apples in which paranoia trumps partnering.

H-P Bets on the Cloud

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Hewlett-Packard designed and built its first computer in 1966. Has it designed and built its last?

Various Wall Street sources are reporting today that the world’s second largest electronics company will spin off its PC unit in order to concentrate on servers and services. If true, it marks the end to an extraordinary era — one that saw H-P race neck-and-neck for years with IBM and Digital Equipment in the mainframe space, then after falling behind Dell in PCs, snatch up Compaq in a move that was generally panned but turned out to be a masterstroke.

Still, over the past several years PCs  became an ever lower-margin business filled with low-cost competitors. Moreover, the emergence of shared-server computing — aka, “the cloud” — posed a threat to those who poured resources into branded laptops and desktops.

It says here this move is H-P’s way of saying that it, too, believes cloud computing is the future, and the money to be made will come from selling the heavy-duty hardware, not billions of “dummy” terminals that are hooked in to it.