HP and Foxconn Form Cloud Server Partnership

Hardware giant HP has recently announced a partnership to build out low cost cloud servers with Taiwan based Foxconn. Foxconn most notably builds parts found inside Apple’s iPhone. As both companies are looking to seek out new profit verticals, the switch to focus on low cost cloud servers became a natural next step for both organizations. Foxconn is able to scale their manufacturing abilities while HP is able to contribute their decades of experience in mastering datacenter hardware build outs.

These new low cost cloud servers will be sold to organizations such as Amazon, Facebook and Google. When these companies build out additional cloud infrastructure, they aren’t looking for servers with the highest specs. Public cloud providers are often looking for low cost server hardware that fits into their existing infrastructure. Since the premise of cloud is to build out infrastructure quickly in a vendor neutral fashion, these server’s specifications do not need to be robust. What is more important is that servers manufactured by HP and Foxconn are easily integrated into existing infrastructures and that is the approach that HP and Foxconn plan to take.

Andrew Butler from Gartner weighed in on HP and Foxconn’s new partnership by saying, “The challenge for the established server vendors is that they risk becoming increasingly over-engineered and overpriced as the data center evolves, and this is HP’s attempt to circumvent that challenge.”

Experts also noted another challenge, which is HP’s existing server line up. HP doesn’t want to compete against itself. There are several other interests that the hardware manufacturing giant has a hand in when it comes to public and private cloud. An example of this would be the Open Compute Project. Other analysts see this is a move to keep Foxconn from joining another vendor to carry out the same tasks. Regardless of HP’s intention, experts believe that this move will only drive current cloud prices down even further as cloud server technology continues to mature.