Report: Amazon Aims To Design Its Own Server Chips

Amazon is building a chip design center for its Amazon Web Services' cloud business in Austin, Texas, according to a report from news site Gigaom.

Gigaom reported that Amazon has hired several chip engineers who used to work at Calxeda, the ARM-based server startup that shut down last year. According to the report, Amazon has posted several job listings on LinkedIn for a CPU and System Architect for Amazon Web Services.

Amazon could not be reached for comment at press time.

Related: Microserver Chip Maker Calxeda Abruptly Shutters

The move comes with rival Google this week showcasing a Google server motherboard using IBM’s new Power8 Chip.

Hewlett-Packard, meanwhile, just unveiled a joint venture with Foxconn Technology Group, the world's largest contract manufacturer, in a bid to deliver a dramatic breakthrough in server price-performance for Internet giants such as Facebook and Amazon.

HP said the strategic commercial agreement, which takes effect May 1, is aimed at disrupting traditional hyperscale server design with a new line of cloud-optimized servers "specifically targeting service providers."

Calxeda, whose chips were slated to be used in an upcoming server module for HP's Moonshot server line, said its abrupt closure was a result of a financing deal that fell through. The company had positioned its ARM processor-based technology as an option to Intel's Atom-based technology.

"Amazon wants to drive the cost of compute down and Intel doesn't have much competition right now," said the CEO of a CRN Solution Provider 500 company, who did not want to be identified. He said Amazon is building its own chip design unit in order to put the heat on Intel. "Amazon has the money and manpower to get it done. I think this is a way for Amazon to get better pricing from Intel. This is going to be interesting to watch."

John Koligmago, vice president of technology solution sales for Anexinet, No. 213 on the CRNSP500 list, said he sees HP as a better choice for customers looking for server innovation. "I wish Amazon would stick to shipping books,: he said. "That is nuts."

Kolimago said he sees HP extending its lead in the server market with an all-out server innovation offensive. "[HP CEO] Meg Whitman is doing whatever it takes to drive costs out of the equation with partnerships, alliances, whatever it takes," he said.

"It's great to see the world's largest technology company continue to push the technology envelope. Whitman is saying making sure that HP does not rest on its laurels even though it is No. 1 in the server market."

One high-ranking executive for a major hardware maker, who did not want to be identified, said he sees Amazon, Google and Facebook all trying to build more efficient mousetraps to solve their data center problems, whether it's power efficiencies or reducing virtual server sprawl. "There are a lot of big engineering problems to solve,’ he said. "There are companies that play in the hyperscale space that are pushing the physical limits of the data center. It's like Henry Ford trying to build the most efficient factory."

PUBLISHED APRIL 30, 2014