Effective immediately, ARM server startup Calxeda has ceased operations and shut down. A source close to the company says that Calxeda attempted to raise funds through a fourth round of capital financing, but was unsuccessful and “just ran out of runway.” It’s an unfortunate end for a company that wanted to revitalize the data center, though the company’s IP and assets may still be acquired by an interested player in the market.

Over the past few years, we’ve covered plucky Calxeda and its efforts to create a new kind of server infrastructure that could challenge the dominance of x86. The company’s first-generation products, based on the Cortex-A9 32-bit architecture, weren’t just vaporware — the company had advanced to the point that it was shipping test systems, and had big plans to partner with HP on Project Moonshot and move to designs based on the Cortex-A15 and the Cortex-A57. Unfortunately, that dream has come to a close.

Calxeda’s failure underlies one of the central problems for any company that wants to challenge Intel’s dominance of the data center with ARM-based hardware. Ramping up designs and validating for the server room takes a non-trivial amount of time and money; server customers have requirements and specifications that off-the-shelf consumer parts can’t automatically match. Any company that wants to fight in this space is going to have to commit significant resources to doing so, and that may limit the impact of any single startup.

Obviously AMD has both SeaMicro’s Freedom Fabric ASIC and its own ARM core coming online. The combination could be the greatest challenge Intel faces from the ARM server market, at least in 2014 — most of the startups backing ARM are significantly smaller than AMD. Then again, going head to head with Intel isn’t a business strategy that’s worked well for Chimpzilla in the past, regardless of where you lay the blame for that particular shortcoming. Calxeda’s outcome doesn’t doom ARM’s efforts in the data center, but it does put the difficulty of the battle in sharp relief.

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