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» VIEW ALL POSTS Aug 17 2012   1:45PM GMT

On the record: Google using Intel to bypass infrastructure vendors



Posted by: Jessica Scarpati
Tags:
cloud data centers
cloud provider vendors
cloud servers
Google
Intel
OpenFlow

Wired got an interesting scoop from Intel this week: Google has been buying chips directly from Intel for five years, bypassing traditional data center infrastructure vendors to build its own servers, storage and networking devices.

According to Wired‘s Robert McMillan:

“It’s certainly not anything that the companies involved discussed openly, so it is kind of a big deal that they said something on the record,” says Dean McCarron, who runs Mercury Research. McCarron reckons that about 10 percent of the approximately 16 million server chips sold each year go to big internet companies that are skipping the mainstream server vendors.

One of the reasons that data center operators are so hush-hush about their purchasing decisions is that they don’t want to tip their hand whenever they’re adding capacity. That can drive up prices for other components of the build out — bumping up costs for everything from real estate to networking gear.

Obviously, very few cloud providers have the means or motivation to follow Google’s footsteps here. And while Google’s strategy is grounded in using custom hardware to build a competitive advantage, it echoes something I’ve heard anecdotally from cloud providers big and small: Vendors often aren’t meeting their needs, so they’ve taken to building their own systems.

This is no shocker for the larger providers, particularly the telcos, which have long developed custom systems and applications through their internal research and development divisions. Nor have I heard about a consistent area of complaint among cloud providers adopting a do-it-yourself strategy — sometimes it’s with networking, sometimes storage, sometimes platforms. But it seems those anecdotes and stories like this one from Wired — in addition to the growing interest in open source projects like OpenStack and OpenFlow – all seem to point toward the suggestion that either vendors aren’t satisfying cloud provider needs, or data center infrastructure has become such a differentiator that it’s better to build rather than buy.

Either way, it’s not good news for vendors.

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