Could open-source hardware shake up the datacenter the way in which Linux disrupted software? From Facebook to Fidelity, a number of big companies say this idea works.

Facebook, Fidelity, Goldman Sachs, and other leading IT users think the open-source movement is able to shake up the hardware industry the style Linux did in software.

In the past, only the very biggest companies — the likes of Amazon, Google, and, yes, Facebook — could afford to customise servers, storage, and networking systems to their precise needs. Instead, most companies have filled their datacenters with off-the-shelf, mass-produced hardware from the likes of Hewlett-Packard, IBM, Dell, Cisco, and Oracle.

But an open-source initiative called the Open Compute Project is attempting to upend this hardware production process in two ways simultaneously. First, Facebook and other companies are sharing their hardware designs through OCP. Such sharing could put leading-edge designs within the hands of many more user companies. Second, shared hardware specs let IT organizations mix’n’match parts from different suppliers, which opens hardware manufacturing to new players. Accordingly, open-source hardware could produce significant new competition for existing hardware vendors — and a brand new bargaining chip for buyers.

Open-source software corresponding to Linux, Apache, Python, and Android rewrote the guidelines of the software industry. With open-source code, any company can take, say, a Linux operating system and change it exactly for its needs. Linux under no circumstances put an end to proprietary Windows server software in datacenters, nevertheless it made for fierce competition (and for a long time, considerable anxiety in Redmond). Open-source Apache software, meantime, became the dominant web server software. Android is now the market-leading operating system for smartphones just six years after Google launched the open-source OS.

Open-source hardware, in spite of this, still has everything to prove. Is Open Compute on the cusp of doing for hardware what open-source code did for software — make a valuable technology asset available to a much wider set of developers and users, while lowering the usage costs? Or is the project caught in a cloistered community, one who helps Facebook burnish its image as a tech innovator while benefiting just a handful of monetary services and other companies with massive computing needs and tech-savvy staffs?

Fidelity is likely one of the true believers. The investment giant is rebuilding its IT operations around a non-public cloud datacenter architecture, and it’s embracing OCP-inspired hardware as a part of that fluctuate. OCP designs now account for a 3rd of Fidelity’s servers, and George Brady, executive VP of IT, expects that figure will grow to 80%. HP and Dell designs will provide the alternative 20%.

Fidelity was moving clear of Tier 1 suppliers to custom or “white box” suppliers akin to ZT Systems, Avnet, Penguin, and Hyve, Brady says. The costs Fidelity pays for servers have declined 50% over the two-1/2 years because the company started buying OCP-inspired systems from the custom builders, he says.

Goldman Sachs, like Fidelity, joined OCP when it was founded in April 2011, but it is not as far along in putting OCP systems into production. The co-head of Goldman Sachs’s technology division, Don Duet, says he doubts that OCP, still in its toddlerhood, deserves much credit for reducing server prices on the firm, since hardware prices were already in a steep decline.

The economics of open-source hardware are different from open-source software. A beginning programmer can download an open-source software and make significant changes to it at no out-of-pocket cost. A beginning hardware architect can take an OCP design and ask a manufacturer to supply an extra component, but it is going to cost that architect a minimum of $400,000 upfront to retool a production line. Fewer than 10 manufacturers are building OCP-certified products today. So there is no ensure that open-source hardware will follow the identical path as software. But as corporate computing demands continue to grow, open-source hardware will go somewhere.

It started at Facebook
The Open Compute Project began around designs for stripped-down motherboards for servers in Facebook’s datacenter. It has expanded to designs for servers, racks, network switches, or even the design of the complete datacenter itself.

In one simple example, Facebook’s IT hardware dispenses with the manufacturer’s logo at the front of legacy servers — the “vanity plates,” as Facebook’s Frank Frankovsky, VP of hardware design and provide chain operations and Open Compute’s founder, puts it. Such adornments impede the airflow had to cool redesigned server motherboards, and that they only add cost.

Frankovsky’s team is accountable for placing these servers in Facebook’s massive datacenters in Oregon, North Carolina, and Lulea, Sweden. Other huge web companies reminiscent of Amazon and Google also design their very own hardware, but they maintain those designs secret, believing their engineering provides competitive advantage. Facebook’s leap of religion is that by sharing its hardware designs, it may get more volume and new ideas behind those designs, and thus lower the general cost of generating computing power to run its social network.

OCP backers have formed a well financed foundation and attracted a community of contributors around seven hardware projects. (See opencompute.org/projects.)

Participants in OCP include chipmakers Intel and AMD, that have produced designs for Decathlete and Roadrunner motherboards, respectively. Servers according to the motherboards are available in from several manufacturers, including HP and Dell. Or a corporation can choose a design from among several OCP specs and hire a manufacturer to construct custom servers in accordance with it. That option is slowly giving rise to a brand new class of producing from little-recognized manufacturers, threatening to disrupt the enormous three of HP, Dell, and IBM. The triumvirate commanded almost two-thirds of the x86 server market in third-quarter 2013, in keeping with IDC. (IBM is in the middle of selling its x86 server business to Lenovo for $2.3 billion, precisely because it’s low-margin.)

Charles Babcock is an editor-at-large for InformationWeek, having joined the publication in 2003. He’s the previous editor-in-chief of Digital News, former software editor of Computerworld and previous technology editor of Interactive Week. He’s a graduate of Syracuse … View Full Bio

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