Facebook is creating more visibility for build your own servers.
The logic of the approach is in this Bloomberg article.
Dell Loses Orders as Facebook Do-It-Yourself Servers Gain: Tech
By Ian King and Dina Bass - Sep 11, 2011 9:01 PM PTMon Sep 12 04:01:00 GMT 2011
“We weren’t able to get exactly what we wanted,” Frank Frankovsky, Facebook’s director of hardware design, said at a conference on data-center technology last month.
Will this logic be successful is countered by ZDNET “between the lines”
Facebook DIY servers really poaching from Dell, HP, IBM? It's too early to tell
By Larry Dignan | September 12, 2011, 3:50am PDT
Summary: Do-it-yourself servers designed by Facebook are allegedly poaching server sales from HP, IBM and Dell, but the data is inconclusive at best.
And Larry makes an excellent point which I totally agree on.
Bloomberg reports that do-it-yourself servers used by the likes of Facebook, Google and Microsoft in data centers threaten Dell, HP and IBM. When I saw the headline, I got excited. Why? I thought there would be some quantification in it. Aside from the fact that 20 percent of the server market is customized, it’s unclear how many orders Dell, HP and IBM were really losing. There aren’t any concrete examples or figures to back up the premise.
You can argue the Logic of build your own servers or the Illogic of build your servers. But from what I am hearing and seeing looking at other indicators of what is going on. The momentum to build your own servers is growing. Companies are putting the infrastructure in place to get it their way.
Hold the ‘Pickles’
“People want to be able to build it their way,”Frankovsky said at the Dell-Samsung Chief Information Officer Forum in Half Moon Bay, California. “They kind of want a Burger King: ‘I don’t like pickles -- why do I have to have pickles?’”
Building your own servers is a niche that is addressing a problem the Server industry has seen in the lack of R&D which results in a commoditization of the servers and lack of innovation.
Do you see Google going back to buying servers from OEMs?
For the same reason Apple has changed smartphones, tablets, and computers by integrating SW and HW, isn’t it logical to integrate SW and HW design in the data center?
Think Carnegie and Vertical Integration.
One of the earliest, largest and most famous examples of vertical integration was the Carnegie Steel company. The company controlled not only the mills where the steel was made, but also the mines where the iron ore was extracted, the coal mines that supplied the coal, the ships that transported the iron ore and the railroads that transported the coal to the factory, the coke ovens where the coal was cooked, etc. The company also focused heavily on developing talent internally from the bottom up, rather than importing it from other companies. Later on, Carnegie even established an institute of higher learning to teach the steel processes to the next generation.
Many of the companies looking to build their own servers use open source so they have control of the supply chain of SW. They want control of hardware.