Google, Microsoft, and others buy networking gear directly from Asia

Massive Internet companies like Google, Microsoft, and Facebook would seemingly consume networking gear like breath mints. These companies are some of the biggest online, and as they grow, they would need a never-ending stream of new servers and networking gear to maintain the speed and efficiency of their networks. You might expect these companies purchase their gear from big names like Cisco or HP.

In years past, that would be true for the most part. I’m sure today some of the needed hardware still comes from those big companies on occasion, but apparently more and more of it is being purchased directly from China and Taiwan. The reason the Internet giants are moving from US-based companies to buy directly from China or Taiwan is money. There are huge savings to be had from buying directly from China and Taiwan in bulk. Google in particular, is known to create its own networking gear in cooperation with ODMs in Asia. More and more companies operating large networks are expected to go directly to Asia in the future bypassing major US and foreign networking companies.

The man helping these companies to go direct to Asia for purchases is J. R. Rivers, a former Google engineer. Apparently, the move away from US network equipment providers is going pretty much unknown by many. The reason is that some of the giant Internet companies consider their networking hardware procurement a competitive advantage. I have to wonder with all the worry about the security of domestic networks using Chinese made hardware if some of the Asian procurement might change in the future. Some governments have banned Chinese companies from bidding on network-related work due to concerns over hacks originating in China.

[via Wired]