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Getting rich off Google

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Comment Some hacks have immense amounts of ambition. I don't. And it's that lack of ambition that's keeping me from making millions of dollars in the server market.

Those of you with stronger wills and bigger dreams will want to pay attention to this story, as I'll lay out a map that could lead to untold riches. (Then again, this could be total nonsense. Take your pick.)

It would seem that any vendor of size hoping to play in the software-as-a-service game needs to ask itself some serious questions. These companies need to look at Google as one, extreme end of the data center landscape and then analyze how close their economics have to be to Google's in order to remain competitive.

Google builds its own servers. It also owns its own fiber, and builds its own switches. Most of you knew that.

Beyond crafting custom gear, Google tends to pick up cheaper parts than rivals. It uses lower power chips, cheap storage and lower-grade memory that some companies would never touch.

So, when you read about Google building a number of $600m data centers, you must take the economics behind the gear filling that center into account. And, by "you," I mostly mean Microsoft, Yahoo!, Amazon, eBay and a couple of other major service providers at this point.

Pain in the back-end

Google is about the only company willing to deal with the hassle and expense of crafting its own systems. That said, the rival service providers need not settle for "general purpose" hardware for the masses pumped out by HP, IBM, Sun Microsystems, Dell and others.

In fact, a number of the companies mentioned - Microsoft, Amazon and Yahoo! - have turned in recent years to server start-up Rackable Systems, which has a unique take on server design and power supplies. Rackable can offer fairly dramatic power savings. The problem inherent in Rackable for a larger service provider is that it has to bet on a start-up rather than a trusted vendor.

Given all that, let's get to the really tricky bits.

Does it make sense for one of the Tier 1s to start constructing very lower power systems in the spirit of Google's own gear?

My inclination is to say that it does make sense, simply because these mega centers appear all the rage at the moment. You've got Google and Microsoft spending more than $2bn on data centers in just the last year. Smaller service providers will spend less per data center, but they still represent a lot of collective demand. And this demand should only increase in the years to come.

To that point, Intel has confirmed work on custom, low-power motherboard designs that customers - be they vendor partners or end users like Google - can purchase. I've heard rumors about similar projects at Sun and HP. And Dell even has a program in place where it will do custom work if the order is large enough, crafting systems that place a premium on, say, power efficiency.

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Next page: Tier 1 Compromise

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