Google runs one of the largest computer networks on Earth, a web of machines that extends from Oregon to Finland to Taiwan. This is how it delivers so many Internet services to so many people in so many countries so quickly, from Google Search to Google Maps to YouTube. The irony is that Google built this vast network without much help from companies like Cisco, Dell, HP, and IBM—companies that supply the hardware for most of the world's computer networks. Google, you see, designs its own hardware.

It has to. Over the past 15 years, Google's network grew so large that the company needed a cheaper, more efficient way of building it. Traditional gear from traditional suppliers was too expensive, overly elaborate, and difficult to manage. So Google designed its own gear, working with various firms in Asia and elsewhere to manufacture a more streamlined breed of hardware, including computer servers and the networking switches that send data between servers. Most notably, Google built switches that could run its own software—software it could readily reprogram to suit its needs. This wasn't possible with traditional gear.

'The telecoms are realizing the value they get out of a traditional supplier is continuing to diminish.'

It was a very Googly thing to do. But the implications extend well beyond Google. As Facebook's social network expanded to hundreds of millions of people, it too designed its hardware. Then, under the aegis of a nonprofit it called the Open Compute Project, Facebook open sourced these designs. Suddenly, other companies could use the designs, improve them, and—through mass production–drive down the cost. Companies like Apple, Microsoft, Rackspace, and Goldman Sachs did just that. This new breed of hardware isn't just a Google thing. It's the only viable way of building the largest online services.

Now, a new wave of companies aims to push this movement even further. This morning, four big-name telecoms— AT&T, Verizon, Germany's Deutsche Telekom, and South Korea's SK Telecom—agreed to join the Open Compute Project. Through a sub-project dedicated to the needs of telecoms, they too will explore open source servers and networking equipment that can boost efficiency and reduce costs. "Everyone is looking for that same synergy and agility," Gagan Puranik, a director of architecture planning at Verizon, says of his company and others who have joined Facebook's experiment in open source hardware. "The learning and the sharing will go both ways."

The announcement is notable because, as you'd imagine, telecoms are among the world's largest hardware buyers. This will yield another sizable shift away from traditional data center gear and towards the sort of streamlined, programmable gear fashioned by Google and Facebook.

Yes, that undermines companies like Cisco and HP. "The telecoms are realizing the value they get out of a traditional supplier is continuing to diminish," says JR Rivers, who once designed hardware at Cisco, helped Google develop its networking switches, and now sells Google-like networking software to large online businesses, including telecoms. "Open Compute is natural way of dealing with this. It helps highlight a more open and malleable hardware supply chain ecosystems, as opposed to one-stop shopping form existing suppliers." That said, companies like Cisco and HP have moved to accommodate this shift, selling (at least some) gear that mimics the Google Way.

Long Time Coming

Today's announcement is a long time coming. AT&T has long said it intends to "virtualize" 75 percent of its network by 2020. In other words, it's moving towards a Google-like model where network logic sits in the software rather than the hardware. This is now called "software defined networking," or SDN, and it means AT&T is freeing itself from old-school gear that wasn't so easier programmed.

According to reports, AT&T has already designed some of its own networking gear to accommodate this shift, and in June, it opened sourced some of these designs through the Open Compute Project (though it wasn't an official member). The project encourages companies not only to use and modify existing open source designs, but to donate their own as well.

And yet, as Rivers points out, these telecoms may not adopt the latest technology as quickly as their Internet counterparts have. "These guys move way slower than any of the web companies," he says of the large telecoms. "I don't expect anything radical happening in the next year." But it's telling that these companies are embracing this movement—and embracing it so publicly.

What does Facebook get out of this? After all, it's not a telecom. At first blush, it doesn't benefit from hardware built for an AT&T or a Verizon. But there's an indirect benefit. Facebook's vast social network runs atop the networks operated by these telecoms. What's good for them is good for Facebook. In fact, Facebook has long explored ways of expanding the Internet into places that don't already have it, using everything from drones to satellites. When it comes right down to it, this is just another way. "We've been focusing a hell of a lot on connecting the world," says Facebook head of architecture Jason Taylor, "and that's not something we're going to do alone."