Thursday, January 16, 2014

Brand vs. commodity - your favorite brands probably run commodity servers

Consumers couldn't care less about servers. Consumers deal with the hardware that's in front of them - often a laptop or a tablet.

But for enterprises, servers are obviously very important. While enterprises have to buy laptops and tablets (and desktops) for their employees, the businesses themselves run on servers - either an enterprise's own servers, or servers from a cloud provider.

When you look at the server market, it continues to be dominated by the big three - HP, IBM, and Dell. According to the International Data Corporation (IDC), these three vendors alone were responsible for two-thirds of all 2013 third quarter server sales. Cisco and Oracle round out the top five.

While there are interesting increases and decreases among the top five, IDC paid special attention to a newly-defined category: "original design manufacturer" (ODM) sales.

In response to evolving market demand within large scale, Web 2.0, and cloud hosting environments, Original Design Manfucturers (ODMs), such as Quanta Computer, Wistron Group/Wiwynn, Inventec Corporation, Compal Electronics, etc., are selling both complete systems and partial sub systems -- where final assembly is completed in the channel by integrators – into the market....

ODM Direct server demand grew 45.2% year over year in 3Q13 to $783 million as unit shipments increased 30.7% to 325,685 servers. ODM Direct servers now represent 6.5% of all server revenue and 14.4% of all server shipments.

And who is buying ODM Direct servers? According to IDC, these are primarily sold in the United States, and are primarily purchased by companies such as Google, Amazon, Facebook and Rackspace.

This is interesting, because all four of the companies mentioned by IDC have very strong brands, and work hard to emphasize their brand identities. But behind the scenes, their offerings are run on servers from manufacturers that most of us don't even know about.

Let's face it - when was the last time that you saw an ad that said, "Amazon proudly runs on Wiwynn"?
blog comments powered by Disqus