And because they purchase such a large number of machines, they can afford to design their own in tandem with original design manufacturers (ODMs) in East Asia. These ODMs are the same companies that build machines for Dell, HP, and other original equipment manufacturers (OEMs). In essence, Google and Facebook are cutting the Dells and the HPs out of the equation, causing a major shift in the market.
With Facebook “open sourcing” its server designs under the aegis of the Open Compute Project, giving them away to anyone who wants them, more and more companies are exploring this direct-to-East-Asia route, including not only large internet companies but also financial outfits, biomedical companies, and other outfits that require large numbers of servers. Goldman Sachs, for instance, is one of the big names leading the Open Compute Project.
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