Google flies there. So does Facebook. And probably Amazon and eBay and many other top internet companies. It's the server market's Bermuda Triangle – a place where hundreds of thousands of computers are trading hands in a market dominated by a handful of Taiwanese server makers that you've probably never heard of.

Right now, the research firms that track server sales admit that they don't have much of a handle on what's going on here. But they agree that the shadow server market is growing, and it could become a real threat to the big-name server makers such as Dell, HP, and IBM.

The added twist is that threat comes from their own partners. Those Taiwanese companies are also "original design manufacturers" (ODMs) to the American server giants. With names like Wistron, Quanta, and Inventec, they build the bare-bones servers that are then tested and customized by the Dells, HPs, and IBMs of the world. But some of the internet's biggest players are now going straight to these ODMs to buy no-frill, low-cost servers that they then cram into data centers by the hundreds of thousands – cutting the American server makers out of the equation.

Google was the first big company to go direct to Taiwan, but Facebook has followed suit. And while Amazon won't say who supplies its servers, it buys so many that it would make sense for it to pursue the same route. It's part of a "high-level shift" that's happening in the data center, according to Jonathan Heiliger, formerly the vice president of technical operations at Facebook.

Facebook Cuts Out the Middleman

Last spring, Facebook launched the Open Compute project, an open source data center project that, among other things, makes it easier for other companies to go straight to Taiwan. And according to Heiliger, companies that buy a lot of servers and build their own software are starting to take notice. "I think there's interest," he says. "I don't think there's mass Fortune 500 interest, because it doesn't make sense for people who have crazy integrated applications and need a lot of vendor support. But there are a growing number of people that are operating at that large scale."

Most enterprises won't buy from a Quanta or a Wistron, because big software companies such as Microsoft or VMware often don't support their products on these systems. But for Heiliger's "large scale" operators, big companies that have massive, internally developed applications, to them buying from these companies can make sense.

These are companies that buy tens of thousands, if not hundreds of thousands of servers: government labs, oil exploration outfits, Wall Street firms, or big web companies. And increasingly, the ODMs have come knocking, trying to close sales directly with these big buyers, Heiliger says.

The number of servers that these companies buy is astounding. Amazon Web Services adds as many servers each day as it needed to support the company during the entire year 2000, back when it was a $2.76 billion company, according to Kay Kinton, a company spokeswoman.

It's probably the hottest section of the server market. And right now, it's not being closely tracked by the analyst firms.

Box Counters Miss Some Boxes

Gartner and IDC include estimates of ODM sales in their overall server market numbers, but they can't actually peg the size of the market. "We are in the process of trying to gather more information on the ODM market, but we do not have any numbers that can give an accurate view," says Reuben Miller, an IDC analyst.

"It's hard to get those numbers because they're not reported to IDC or any of the market firms that count servers," says Andreas von Bechtolsheim, founder of Arista Networks, and a board member of the Open Compute project.

This server Bermuda Triangle is making it hard for enterprise customers to get an accurate fix on the market. "This is important," says Stephen O'Grady, an analyst with RedMonk. Companies often look closely at how vendors are doing in the marketplace before deciding where to buy, and without all the ODM data, it's difficult to figure out what's really going on in the market, he says.

Although the research firms can't say exactly how big the direct-from-ODM market is right now, they believe it's small. Gartner lumps the ODM market into the 20 percent of the server market sold by "other vendors," rather than the market-leading HP, Dell, IBM, Fujitsu, or NEC. Still, direct sales by ODMs could have a big effect on server vendors. "There's a risk to everybody," says Jeffrey Hewitt, a Gartner vice president of research. "This is a disruption."

If the enterprise moves to the cloud, and the cloud providers are getting their servers direct from Taiwan, that cuts companies such as HP and Dell out of the picture.

So to hedge against this, server vendors are becoming cloud service providers. That's what's behind HP's push into cloud services, according to Jeff Nord, the head of service delivery with infrastructure services company Terremark. "You're seeing a lot of the legacy big box providers try and jump into the service provider market because they see that happening already. They're realizing that to really stay relevant they need to offer a service on top of their hardware stack."

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