HP cooperates with Foxconn on server customization Market

"Tenkine Server channel May 5 News" recently, HP and Foxconn announced the signing of a joint venture agreement to create a new cloud optimization server for service providers. The new product line will meet global service provider cloud computing requirements through lower TCO, scale effects, and services and support. It also complements HP's existing ProLiant server portfolio, including the Moon landing series servers.

Meg Whitman, president and chief executive of Hewlett-Packard, said the partnership embodied HP's business model innovation in the server sector, combined with its Whitman in mass design and manufacturing and HP's leading position in computing and services, Allow both parties to provide disruptive products in terms of infrastructure economics. Terry Gou, the founder and chairman of Foxconn, said that by working with HP, Foxconn would seize industry opportunities, grow in emerging markets and deliver end-to-end value, and expand Foxconn's global leadership in design and manufacturing.

The IDC survey shows that service providers will continue to seek new breakthroughs in improving performance and reducing costs as they expand their cloud architecture deployments. In addition, managed-as-service will continue to transform from traditional mode to cloud-based delivery mechanisms such as infrastructure and services, which will drive the massive growth of managed servers.

Although the concept of cloud optimization server is more vague, but from the comments of the two giants we can still faintly see that the two manufacturers focus on the market is actually customized market. According to a survey published by IDC, the smaller White-label server vendors, the ODM manufacturers, have been growing rapidly. With the rapid development of cloud computing and the increasing demand of Chinese market, more and more customers are willing to customize the server directly from ODM, instead of purchasing the common server to the server provider, especially the Internet company with large amount of purchase. A survey shows that servers that ship directly to end users already account for 10% of the global server market.

Cloud computing has dramatically increased the demand for servers in the data center and more sensitive to server costs. Direct to ODM custom server can be the most close to their own application requirements, to avoid the waste of server resources. and bypass the intermediate links, making the server procurement costs lower.

Because of the unique business model of the cloud computing industry, server ODM is starting to offer a separate motherboard to cloud computing customers rather than the entire server, the company's head said. This leads to an increase in the number of ODM shipments, but the revenue will drop because the motherboard is much less profitable than the entire server. It is now the case that the ODM sells the motherboard to the OEM server manufacturer, which produces the server itself based on the needs of its Internet customers, before the server vendor orders the entire server to the ODM.

With the cooperation of Foxconn and HP, we see that traditional server vendors have begun to recognize the impact of the Internet and cloud computing on the server product chain. Brand server manufacturers should not be limited to the traditional server market, but should actively explore emerging market opportunities. At present, Internet data centers in the ascendant, the internet giant large-scale construction of data centers, which is a rare market opportunity for the server market. The internet giants usually do not buy brand servers based on cost considerations, but instead use their own design and ODM to customize the server, which is both a challenge and an opportunity for brand server vendors.

HP, one of the big three in the server market, should be commended for its co-operation with Foxconn. After all, HP has begun to change and embrace emerging market opportunities. As a foundry, Foxconn is also seeking to shift to higher-margin foundry projects rather than traditional digital devices. In general, the collaboration of two vendors adds new imagination to the current server market.