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The 3 Big Effects of the Open Compute Project

December 07, 2017

The 3 Big Effects of the Open Compute Project

Of course, that is only one way that the OCP will have a big effect. Here are three big effects that the OCP is having across the broader IT world:

1. Transforming the Finance and Telecommunications Industries

There are literally hundreds of companies that are part of the OCP in one fashion or another. Everyone from end users to component suppliers and system-makers that are changing the face of hardware. Although OCP is still primarily impacting the hyperscale data center level, it has already begun to transform the finance and telecommunications industries.

It began with Goldman Sachs making 80 percent of its server purchases based on the open compute platform and now includes Bank of America, which hopes to have 80 percent of its backed running on OCP before 2020. The implications are that this will have a profound impact on IT vendors as financial services is their biggest market.

In telecommunications, AT&T, Nokia, Intel, and several telcos are gearing up to create an open-source hardware and software platform for the telecommunications industry. The goal is to usher in 5G, which will be highly disruptive to the major hardware manufacturers.

2. Direct Selling by Original Design Manufacturers (ODMs) and Distributors Opens the Door to Non-Hyperscale Sales

According to GartnerInc., ODMs and distributors are now market disruptors due to the OCP in that they are now selling their systems directly to users. This is having a major impact on how providers can make money in the IT market. This is the beginning of a major shift where OCP-based systems will eventually attract regular enterprises in addition to early adopters (Web-scale data centers).

3. OCP Competition Is Threatening the Future of Major Hardware Manufacturers

What has appeared to be alliances with major IT manufacturers that have joined the OCP can better be viewed as a hedge against their competitors in many cases and leverage to force lower prices on hardware in others. LinkedIn’s pending acquisition by Microsoft is spurring the development of an internal project that is modeled on the OCP and that has the potential to shake up the roughly $175 billion data center hardware market.

LinkedIn’s plan is somewhat similar to what Facebook is doing with its own OCP. Internally, this is known as Project Altair, and the plan to build its own network software to run on dirt-cheap commodity network hardware is known as Project Falco. This is a terrifying trend for major hardware vendors that are already feeling the effects of hyperscale providers designing their own IT infrastructure from scratch.

In essence, the IT industry is slowly moving beyond the promise of OCP and is now dealing with its real-world impact on the industry as a whole. Value-added resellers (VARs) should not only understand what the OCP is, but also be knowledgeable enough to explain the benefits of OCP servers to their clients. 

The big changes to the industry will keep coming as the OCP continues to grow, change, and spread across industries and sectors. Now is the time for VARs to get up to speed on integrating these solutions into their business plan for future growth and stability.