Facebook: Better Cloud Servers Needed

Who has the best cloud server? Microsoft (MSFT) and Facebook have huge requirements, and vendors are taking notice.

Jonathan Heiliger looks at the web server market and sees a major disconnect. "The number of servers going into data centers is growing at the fastest rate ever," says Heiliger, the VP of technical Operations for Facebook. "But enterprise server deliveries are flat. You could argue that that major server vendors are not doing enough to meet the demands of their largest clients."

When Heiliger talks about servers these days, server vendors are listening. Facebook recently arranged new financing to buy $100 million worth of servers through a "venture lending" deal with TriplePoint Capital. The $100 million will be used entirely for web servers. Facebook already has more than 10,000 servers supporting its fast-growing social networking platform.

That's promising news for Rackable (RACK) which has specialized in servers for high-density data center deployments. Rackable already counts Facebook among its four largest customers, and this week it introduced a new line of Extreme Efficiency (XE) servers, offering twice the density for the same energy usage.

But Rackable has plenty of company, as rivals like IBM, Dell and HP have introduced competing lines of cloud servers.

Facebook isn't the only platform builder with a huge server requirement. Microsoft is currently evaluating its options for hardware for its new container farm in Chicago, which will be packed with up to 200 data center containers. Microsoft has said the containers may be filled with as many as 300,000 servers. The company operates at least one Verari Forest container, and is also believed to be testing the ICE Cube container from Rackable (a major vendor for Microsoft).

"We've run POCs (proof of concept testing) with several different vendors," said Microsoft's Daniel Costello, who spoke about the company's CBlox containers Wednesday at the GigaOm Structure 08 conference. "It's my belief that every major vendor will have a (container) product available in the marketplace within the next 12-24 months."