HP is fighting back against the Far East ODMs that are eating into server shipments by inking a deal with Foxconn to build a price conscious box in high volumes for the largest cloudy firms.
Such is the growth of the white box server market - including offerings from Quanta Computer, Wistron, Inventec and Compal Electronics - that beancounter IDC has split out ODM sales as a sub group in market reports.
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These Taiwanese hardware-builders account for single-digit percentage market revenues and are still overshadowed by HP, Dell and IBM Lenovo IBM. But they are considered to be forces to be reckoned with in the US, producing servers for big names including Google, Amazon, Rackspace and Facebook.
Against this backdrop, HP today has signed a "strategic commercial agreement" with Foxconn - to build a new line of "cloud-optimised servers" targeting that very space.
The boxes HP wants the deal to tick include "quick customer response" times and "volume manufacturing" that result in "high-density, easy to manage, cost competitive" boxes.
Server specs, prices and availability are expected once the non-equity joint venture takes effect from tomorrow, but HP said the line will sit alongside existing ProLiant systems.
In prepared comments, HP CEO Meg Whitman said it was combining its "innovation" with Foxconn's "high-volume design and manufacturing" prowess.
Foxconn CEO Terry Gou added:
"Cloud computing is radically changing the entire supply chain for the server market as customers place new demand on breadth of design capability, value oriented solutions and large scale and global manufacturing capabilities."
Foxconn already builds HP servers, storage and integrated custom built systems in EMEA. The plants are Foxconn-owned but HP teams are on site for planning, logistics and quality checking. ®