23 March 2023

Facebook Introduces Own Designs

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Facebook Inc.’s 1.4 billion users may not know it, but the social network is quietly remaking the essential engines of the Internet. Facebook, Google Inc. and other Web giants have shaken up the computer-hardware business by designing computer servers to their own specifications and bypassing the usual hardware manufacturers. Now, Facebook is expanding its assault by introducing its own designs for the networking equipment that funnels data among its computers and between Facebook’s computers and the Internet.

Computer servers and networking equipment are two of the three core components of the behind-the-scenes data centers that power nearly everything people do on their smartphones or Web browsers. Facebook’s push to self-design more hardware is prodding other companies to do the same, and it’s forcing suppliers such as Cisco Systems Inc., Juniper Networks Inc., International Business Machines Corp. and Hewlett-Packard Co. to change what they do.

IBM last year sold its mass-market server business, and analysts said pressure from low-cost hardware was a factor. H-P has begun offering servers without its proprietary software, which some customers complain keeps them locked into systems.

Cisco Chief Executive John Chambers has said the Web giants’ push toward self-designed hardware—often made to order by contract manufacturers in Asia—has pushed the company to emphasize software innovations.

Cisco’s operating margins—22% in its most recent quarter, the company said Wednesday—are at risk of deflating as it competes with lower-cost hardware vendors. AT&T Inc. has also moved to rebuild its massive network with less expensive, off-the-shelf hardware controlled by software, putting pressure on traditional telecom-gear suppliers to bend to AT&T’s needs.

The threats to Cisco and H-P are a boon to Taiwanese computer-server makers like Quanta Computer Inc., which has remade its business by catering to the computing demands of Web giants. Broadcom Corp. is selling more of its networking chips, displacing custom-designed Cisco chips in some cases.

Facebook started down the do-it-yourself networking-equipment path last year with a switch of its own design, powered by Facebook-written software. Facebook’s mission is to make hardware less important, boosting the role of software that can be quickly updated to meet changing technology trends or to respond to a spike in users. Eventually, Facebook said, it wants its software to be so sophisticated and automated that a single person can oversee the company’s entire network.

Najam Ahmad, who oversees network engineering at Facebook, didn’t say the company would stop buying gear from commercial networking vendors. He acknowledged that Facebook has pushed suppliers to sell the company the hardware it wants, without the specialized vendor software that can’t be easily customized.

Click here to access the full article on The Wall Street Journal.

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