Feeds

HP-Foxconn wave cloud kit under the nose of Google, Facebook et al

Pair hope to send white-box rivals packing, eye up 20 web giants

Beginner's guide to SSL certificates

As many as 20 cloud titans that order servers by the container load are fixed in HP's server team's sights – as a joint venture between contract manufacturer Foxconn and the PC giant begins.

The duo's alliance was forged last week: the aim is to give HP a better shot at competing against Taiwanese assembly lines that churn out server farms to order for the likes of Google.

It's estimated these original device manufacturers (ODMs) in the Far East are responsible for roughly 15 per cent of global server shipments, and about six per cent of revenues, according to IDC, which now breaks out these white-box builders as a standalone segment.

Quanta Computer, Compal Electronics, Wistron and other ODMs have a stranglehold on the cloud service provider market, accounting for some 80 per cent of shipments stateside.

Companies on HP's wooing list include Google, Facebook, Rackspace and Amazon. All of the desired 20 service providers, bar three in China, are US-based, said Iain Stephen, HP EMEA veep for servers.

He said HP tried flogging its Scalable systems – designed for enterprises – to cloud service providers, but those customers didn't require various features in the computers, such as on-board management and power redundancy. The web goliaths prefer to spec their own lightweight machines and get the custom kit built by ODMs.

"The service providers at the top end see no value in that [unnecessary] technology," Stephen told The Channel.

Architecturally, the cloud giants can (in theory) "absorb" a failure from one to 50 racks without service disruption due to the scale of their deployments and build hardware resilience at the rack level, the HP veep said.

"This deal with Foxconn gives us the ability to capture some demand with the right products at the right cost in a faster way than we could, and at a scale most of our enterprise customers can't comprehend," Stephen added.

"Unless you can address the SP [cloud service provider] opportunity in volumes and without losing money, it is a fairly significant threat to the traditional vendors over the next three to five years."

Tier-one cloud companies use hundreds of thousands of servers, "consuming computers effectively by the container because that's the most efficient way to move computers in and out of the environment".

If machines cranked out by the HP-Foxconn joint-venture tickle the big-name SPs, and wrestle them from the jaws of the ODMs, the next step will be to tout kit to tier-two and three clouds.

"This is very important for Europe because most of our service providers there are tier-two and three," said Stephen.

This is where the distribution channel enters the fray: half of HP's tier two and three server business in Europe is transacted by partners who reach corners HP's direct sales teams cannot.

The mega data-centre customers don't want to "additional bells and whistles" that large enterprises are looking for, agreed Giorgio Nebuloni, IDC server research manager.

"This agreement with Foxconn gives [HP] a grip on the market to compete on price and customisation," he told us. "SPs want raw power delivered at a price point in huge volumes."

In Europe, local service providers held about 10 per cent of shipments in Q4 2014, the IDC man said, but whether annual growth rates of 40 to 50 per cent can be maintained is questionable. ®

Top 5 reasons to deploy VMware with Tegile

More from The Register

next story
IT crisis looming: 'What if AWS goes pop, runs out of cash?'
Public IaaS... something's gotta give - and it may be AWS
Linux? Bah! Red Hat has its eye on the CLOUD – and it wants to own it
CEO says it will be 'undisputed leader' in enterprise cloud tech
Oracle SHELLSHOCKER - data titan lists unpatchables
Database kingpin lists 32 products that can't be patched (yet) as GNU fixes second vuln
Ello? ello? ello?: Facebook challenger in DDoS KNOCKOUT
Gets back up again after half an hour though
Hey, what's a STORAGE company doing working on Internet-of-Cars?
Boo - it's not a terabyte car, it's just predictive maintenance and that
Troll hunter Rackspace turns Rotatable's bizarro patent to stone
News of the Weird: Screen-rotating technology declared unpatentable
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.