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Google, Amazon, Microsoft Go East For Network Gear 88

Posted by samzenpus
from the better-buy dept.
theodp writes "Wired's Cade Metz has the scoop on the move away from U.S. network equipment stalwarts, calling it of the best-kept secrets in Silicon Valley. 'Cloud computing is an arms race,' writes Metz. 'The biggest web companies on earth are competing to see who can deliver their services to the most people in the shortest amount of time at the lowest cost. And the cheapest arms come straight from Asia.' Or, as Joyent's Howard Wu puts it, 'It's kind of like buying couches. If you buy one, you go to a retail store. If you buy 10,000 couches, you go straight to the factory.'"
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Google, Amazon, Microsoft Go East For Network Gear

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  • wow.. really? (Score:5, Insightful)

    by rgbrenner (317308) on Sunday April 01, 2012 @05:22PM (#39543403)

    Wow.. really? Huge multinational companies are buying equipment from developing countries because it's cheaper?! What is the world coming to?

  • I quickly read the Wired article hoping to find a joke but didn't find the punchline...

    Dan

  • It isn't exactly a huge secret that the network guys(as with the PC guys and others) do a lot of leaning on their OEMs and ODMs, especially for their less specialized lower margin gear. That being the case, it isn't obvious why a major buyer would pay Cisco or somebody just to order the hardware from the subcontractor, slap a sticker on it, and get somebody to churn out an English-language manual.

    This would be news if the existing 'manufacturers' hadn't already done much of the work of hollowing them selv
  • Then you're doing it wrong. Cloud is not about who can stuff the most servers in the most racks in the biggest building. That's what everyone is ALREADY doing. Cloud is about the SERVICE - which can in many cases be hosted on big iron.

    Meanwhile, we can be sure Azure or whatever it is will come with a nice OOB "management" feature accessible only to certain key groups in China.

    • by Compaqt (1758360)

      >That's what everyone is ALREADY doing.

      Well, yeah, if "everybody" is doing it, this article is about just those "everybodies".

      I mean, not everybody can wear a turtleneck and talk about synergies and sell expensive coffee or phones. Some people have to actually buy and run the ships that bring over those phones and coffee.

  • Joyent is being quoted in an article on big cloud players?

    I thought they were a niche, expensive virtual/dedicated server provider -- the Starbucks of cloud with the unique selling point being hip graphics/cartoons, all of whom you could imagine going to Starbucks.

    (Oops, I just checked, and they moved away from their cool, "CEO is a she" cartoon graphics.)

  • 10,000 couches (Score:5, Insightful)

    by Dcnjoe60 (682885) on Sunday April 01, 2012 @06:09PM (#39543757)

    Or, as Joyent's Howard Wu puts it, 'It's kind of like buying couches. If you buy one, you go to a retail store. If you buy 10,000 couches, you go straight to the factory

    Of course what Mr. Wu leaves out is that they are going straight to a factory in Asia instead of the American manufacturers (stalwarts, I beleive the summary called them).

    Googe, Amazon, Microsoft are all mega-companies and strive to maximize their profits. However, at record unemployment levels in the tech industry, they claim they can't find US workers and have to bring in foreign workers. Now, it appears that US equipment manufactures can't produce enough equipment and they have to again go offshore.

    Again, they can do business wherever they want, but the time has come to for them and their shareholders to either decide they want to be an American company with a world wide presence or a foreign company with a US operation.

    • Dirty not-so-secret is that the American 'manufacturers' already went straight to a factory in Asia to get their hardware built. The markup, box art, and possibly the software are the parts done stateside. This is about the cloud people cutting out the middleman.
    • by mspohr (589790)

      I believe that Adam Smith's "invisible hand" originally referred to the tendency of companies based in a particular country to favor doing business in that country thus strengthening their home country. Of course, now companies have no loyalty to any country so they will roam anywhere to get the cheapest prices to maximize their profits. There is no more "invisible hand". It's all an open race to the bottom.

      • "I believe that Adam Smith's "invisible hand" originally referred to the tendency of companies based in a particular country to favor doing business in that country thus strengthening their home country."

        Yes. And that tendency was a direct effect that they got better profits that way.

        "Of course, now companies have no loyalty to any country"

        Nor they did back in Adam Smith times (he also studies the import/export and the export/export cases). It's only the world changed and now companies get higher profits

        • Re:10,000 couches (Score:5, Informative)

          by mspohr (589790) on Sunday April 01, 2012 @08:23PM (#39544711)

          I think you missed my point.
          Try reading this Wikipedia section slowly:
          http://en.wikipedia.org/wiki/Invisible_hand#Abusing_Smith.E2.80.99s_statement_of_an_invisible_hand [wikipedia.org]

          Smiths invisible hand has been appropriated by others (abused) and expanded (to your meaning above). My point was that his original description and meaning has been lost.

          • "Smiths invisible hand has been appropriated by others (abused) and expanded (to your meaning above)."

            It is curious that the cite you propose makes exactly my point: the "invisible hand" is well and good and works exactly the way Smith proposed.

            As your cite demonstrates -and that's the abuse referred, Smith never gave "magical powers" to the "invisible hand" that made it work but to the benefit of society but that, *given some circumnstances* Smith carefully analize, the "invisible hand" tended to work for

            • by TheLink (130905)
              The "Invisible Hand" only works well as long as there are significant numbers of people who do enough stuff for the greater good. "Invisible Hand" theory isn't very useful- how it works depends on understanding something that it doesn't really explain.

              Q) How many free market economists does it take to change a light bulb?
              A) Free market economists don't change lightbulbs, they write their papers in the darkness while waiting for the Invisible Hand to do it.
    • by the_B0fh (208483)

      How the fuck is this insightful? The key here is whether Facebook buys from Cisco who buys from a factory in China, or Facebook buys from the same damned factory in China.

      It's the same company in China doing the design and manufacturing.

      Record unemployment. You seem to think each worker is the same as another. Competent workers are hard to find. Extremely hard to find. You think Billy Bob who took a class in html will be able to cut it at Google?

      No wonder the US is losing its edge.

      • by Anonymous Coward

        Competent workers are hard to find. Extremely hard to find.

        If you can't find them, may be you should move that decimal point in your $7.50/hour salary offer.
        Competent workers are easy to find if you are willing to pay market price for them.

        • by crutchy (1949900)
          its funny how people talk about the bottom line, thinking its about price, only to be burned by cheap crap before realizing the bottom line is really that you get what you pay for

          if something seems too good to be true, it usually is
        • by the_B0fh (208483)

          Yet another idiot. I was a H1B, and I guarantee you that I was the highest paid person on the team, beating out all the Americans.

          At my current place, I pay for performance, and gave one guy a 60% bump over his last place, and another guy over 100% bump (both Americans).

          However, I have had to fire people too, for non-performance.

          Stop talking using some lame bullet points.

    • by grcumb (781340)

      Or, as Joyent's Howard Wu puts it, 'It's kind of like buying couches. If you buy one, you go to a retail store. If you buy 10,000 couches, you go straight to the factory

      Of course what Mr. Wu leaves out is that they are going straight to a factory in Asia instead of the American manufacturers (stalwarts, I beleive the summary called them).

      What did get mentioned, but seems to be overlooked by everyone here, is that one of Google's primary motivations was because they needed a more open and flexible platform than the 'stalwarts' were willing to give them.

      The only thing that distinguishes Cisco from the others is their 'secret sauce' - the proprietary elements that make high volume network management easier (and in some cases possible). But that's no longer sufficient to keep some of their biggest customers happy; they want lower-level access t

  • Newsflash! The world is round. Asia is to the West of the continental USA

  • Well then it makes a lot of sense to standardize on cheap, largely the same hardware. As the article points out:

    The switches Google was building typically sat at the top of a rack of servers in the data center, connecting the servers to the rest of the network. As Juniper points out, this is only part of the networking hardware used in the data, but it’s a large part.

    So the low level, short haul connections use cheap switches. Makes perfect sense. I'm sure they still need the Ciscos and Junipers to in

  • by Anonymous Coward

    1) Americans want freedom, liberty
    2) Americans adopt capitalism as epitome of freedom and liberty
    3) Capitalsm leads to stock markets
    4) Stock markets lead to shareholders
    5) Shareholders have profit motive
    6) Profit motive leads to public companies to maximize margins
    7) to maximize margins, you lower costs
    8) the east delivers lower cost
    9) jobs go overseas
    10) Americans bitch about employment flight

    Lesson: you did it to yourself by equating capitalism with freedom and liberty

    • Solution:
      - Lessen costs by investing in technology. A single robot is more efficient than a thousand underpaid workers.
      - Improve quality by investing in research. Your business is less profitable because of Huwawei? No problem, just build a better router and bundle it with quality support.
      - Protect your job by investing in education. Indians can easily steal your PHP job, but they will have a hard time stealing your kernel programming job.

      How to make companies do the right investment:
      - Stop protecti
  • by Luke has no name (1423139) <fox@@@cyberfoxfire...com> on Sunday April 01, 2012 @07:27PM (#39544271)

    Thanks, for telling me exactly how Cisco and Juniper aren't scaling to meet the needs of Google. By "scaling", and without further details, I assume they mean "selling cheaply enough".

  • by fostware (551290) on Sunday April 01, 2012 @08:46PM (#39544873) Homepage

    Just take a look at their patents - very few of them are for hardware. Also consider the move to the v15 IOS Universal images.

    Cisco have known for a long time that hardware suffer from Moore's Law (loses it's margin quickly) and is easily replicated via ODMs. Lifted software features are a lot easier to litigate against.

  • The real news for me here, was that they were using US network equipment, instead of cheaper equipment from elsewhere. I'm honestly surprised!

  • What seems to be missed in most of these discussions is that this network gear that the companies are buying are coming without software. One of the ODMs selling the gear appears to be moving to providing some software that can be put together to provide the necessary OS to do the networking but it sounds like it's still an effort to get it working.

    If you're google, amazon, microsoft, etc., it's probably not too much of a problem to get a group of developers together to put together and maintain an OS to r

  • Thanks Google, Amazon and Microsoft for depriving more Americans of jobs. Maybe the next time I buy a technology product I will return the favor. Why should I put money in your pocket when you aren't willing to do the same for people like me.

  • My experience is that while large companies will use Asian companies for some portion of their network, it's never any of the important parts. Let's break this article down a bit.

    "Rivers says. “With the traditional enterprise networking vendors, they just couldn’t get there. The cost was too high, and the systems were too closed to be manageable on a network of that size.”"

    Note that the first and only real point is 'cost'. The rest is bullshit.

    "The Ciscos and the Force10s build their gea

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