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1/29/2014
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Microsoft's Open Compute Move: Just Good PR?

The disruptive power of Microsoft's Open Compute Group move has spurred debate. Let's talk image versus cold hard revenues.

Microsoft In 2013: 7 Lessons Learned
Microsoft In 2013: 7 Lessons Learned
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Microsoft surprised the tech industry Tuesday when it joined the open-source hardware movement, announcing at the Open Compute Summit in San Jose that it would offer the Open Compute Project (OCP) specifications used in Microsoft datacenters as well as code for server management software.

Microsoft's participation speaks to the changing trajectory of the datacenter. In a report released last week called "Predictions for 2014: Private Cloud Management and Infrastructure," the research firm Forrester forecast the proliferation of OCP-compliant and other low-cost, open-source commodity servers.

At least one expert, however, isn't convinced Microsoft's participation is a clear game-changer. "It's interesting," said Gartner VP Jeffrey Hewitt in a phone interview. "But it probably won't be a massive thing."

[For more on Microsoft's move to open source, see Microsoft Makes Azure Server Design Open-Source.]

Hewitt said Microsoft's interest in OCP could yield benefits, but is likely more exploratory at this point. He noted that the web companies that use OCP-compliant tech are typically committed to Linux, which makes a shift to Microsoft's comparatively byzantine OS licensing models a tough sell.

So what's in it for Microsoft? One perk is validation in the open-source community, said Hewitt. He also pointed out that Microsoft should gain from OCP's collaborative nature.

"OCP was fundamentally an effort to disrupt things," he said, explaining that Facebook founded the project because IT is a core part of its business, which means every IT dollar saved translates directly to the company's bottom line.

By eschewing expensive OEM servers in favor of customized designs built with cheap commodity components, Facebook has been able to improve efficiency while reducing costs. The company advanced this concept with OCP, arguing that crowdsourced development would drive the creation of low-cost, highly efficient hardware. The collaboration offers two theoretical benefits: improved technology, and increased demand for OCP-compliant servers that should push the cost of commodity components even lower.

The project has attracted formidable supporters, including chipmaker Intel and investment banking firm Goldman Sachs. "Now isn't a bad time for Microsoft to say, 'We're going to be a participant,'" Hewitt said.

Plus, by sharing designs used to support its Azure datacenters, Microsoft could not only drive down its own infrastructure costs, but also persuade at least some businesses and cloud providers to build out designs based on Windows technology. "It's all kind of intertwined," said Hewitt.

Still, Hewitt doesn't expect Microsoft to see an immediate revenue bump from its OCP involvement. For one thing, the project's emphases aren't for everybody, he said. Open-source datacenters are popular among web companies but less widely adopted elsewhere, he explained, because they require a certain amount of expertise to implement and certain conditions to make them cost-effective and efficient.

Hewitt said Microsoft's OCP participation could negatively impact the company's relationship with server OEMs -- but he doubts it. "Certain customers want support and don't mind paying a software license," he said. "[These customers are] different than someone who might write their own code and work on open source."

For now, Hewitt said, Microsoft faces little risk in supporting OCP, but it could benefit from the chance to declare, "We are in this game, not running away from it."

Michael Endler joined InformationWeek as an associate editor in 2012. He graduated from Stanford in 2005 and previously worked in talent representation, as a freelance copywriter and photojournalist, and as a teacher.

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JasonJ043
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JasonJ043,
User Rank: Apprentice
1/30/2014 | 11:44:52 PM
Re: Hogwash
You are obviously very misinformed.  Windows is incredably stable, and has been since Vista onwards.  Also, Microsoft has many open source projects.  The entirety of ASP.NET is open source.  They own CodePlex, when developers can post open source software projects to collaborate.  This open hardware is anything but a PR move.  If others start using their designs, the servers they use in the future will be cheaper because of economies of scale.
Joe Stanganelli
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Joe Stanganelli,
User Rank: Ninja
1/30/2014 | 5:00:17 PM
Re: Much to lose?
As the saying goes,"Keep your friends close, and your enemies closer."

Besides, other companies already offer open-source freemium models to attract customers to pay for licensed products.  It only makes sense for Microsoft to do the same.
asksqn
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asksqn,
User Rank: Ninja
1/30/2014 | 4:16:41 PM
Hogwash
This is laughable at best.  MS is anathema to anything that isn't locked down into a licensing scheme.  That the company believes (or for that matter, anyone else) that its announcement of OCP would be any kind of game changer is a joke.  This is nothing more than a big PR move with MS hoping to fool most of the people most of the time, which it continues to do with its unstable, bloated OS year after year.
Drew Conry-Murray
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Drew Conry-Murray,
User Rank: Ninja
1/30/2014 | 10:52:49 AM
Re: Much to lose?
I do think OCP is going to remain in the realm of Web-scale organizations. The Web-scale folks run so big that every penny they can shave via a specialized design pays back in multiples. But because the designs are so specialized, I don't really see them moving en masse to the enterprise or mid market. Some tweaks may trickle down to the Dells and HPs that manufacture systems for the masses, but in my opinion OCP is about custom designs for highly specific requirements.
ChrisMurphy
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ChrisMurphy,
User Rank: Author
1/30/2014 | 10:30:14 AM
Re: Much to lose?
Doesn't that presume that this Open Compute movement will stay in the web giant realm?  I would think the threat to Microsoft comes if it moves into the merely big and the midmarket data centers, at which point Microsoft needs to offer options to embrace a new hardware platform while keeping your Windows-centric app platform.
Drew Conry-Murray
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Drew Conry-Murray,
User Rank: Ninja
1/30/2014 | 10:20:57 AM
Re: Much to lose?
It seems like mostly a PR move to me. The kinds of companies looking at open hardware designs run massive infrastructures that emphasize inexpensive components to support massive scale. One of those inexpensive components is Linux. I think it's unlikely that a Web-scale organization will want to pay the license costs to run Windows, even if it is on open hardware. I think Windows just wants to stick its head under the halo of the "open" movement. A hardware design is an easy way to get some of that glow without making any substantial changes to way it operates.
cbabcock
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cbabcock,
User Rank: Strategist
1/29/2014 | 11:25:11 PM
Linux was part of x86 revolution; so was Windows Server
It's good PR but it's more than that. The company has come to understand the role that open systems play, even when it feels competitive with them. And open source hardware is not a threat. Linux was part of an x86 revolution in the enterprise data center. So was Windows Server. Now the enterprise is starting to migrate its operations into the public cloud. Microsoft wants to participate in that process. Resistance, after all, might be about as successful as trying to beat back Linux.
ChrisMurphy
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ChrisMurphy,
User Rank: Author
1/29/2014 | 2:48:02 PM
Much to lose?
Open Compute from what I understand is primarily a threat to proprietary hardware makers, so there might not be much to lose for Microsoft. Michael notes that Open Compute users today are Linux centric, but maybe that's the reason for Microsoft to cozy help. Will companies combine open source hardware with Windows software? What kind of hurdles would that create?   
Laurianne
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Laurianne,
User Rank: Author
1/29/2014 | 1:18:19 PM
MS cloud talent
Joining OCP also could help MS attract talent from the cloud community. Quite a brain trust in that project group, right?
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