Forget building your own server, how about your own chip

Low power server maker SeaMicro’s CEO Andrew Feldman has always been outspoken and forward looking in his beliefs about how the modern data center is transforming how servers are built and will be built. He’s taken things a step further recently when during an exchange with GigaOM’s Stacey Higginbothom he argues that it’s not just the server that will be redesigned by major webscale data centers with enormous buying power but the CPU itself.
Higginbothom summarizes:

…using ARM cores also changes the cost of designing a new chip, and frees the non-CPU elements on the chip from being dictated by a specific vendor…..he [Feldman] estimated that one could build an entirely custom chip using the ARM architecture in about 18 months for about $30 million. He compared this to the three or four-year time frame and $300 million to $400 million in development costs required to build an x86-based server chip.

I’m not entirely shocked here. Concentrating so much buying power in the hands of Google, Amazon, Rackspace and Facebook creates many incentives for them to start squeezing out any bit of the value chain in order to add a couple points to their margins. Originally the logic went, why pay HP or IBM to package components in a box when Google can do it. Now with the advent of ARM licenses, the logic goes why pay Intel or AMD (which, by the way, owns SeaMicro) to build a chip if your own engineers can license ARM cores and do it themselves. Theoretically this also has the benefit of generating an optimal chip that saves energy. We’ll see what’s possible here but it’s an exciting possibility.