If you had to list the top manufacturers of computer servers, you would think it would be fairly easy…
Google? Yes, that is surprising but true. And even more surprising when you learn that the fourth largest manufacturer of computer servers doesn’t even sell them… they are for internal use only.
This grew out of Google’s humble beginnings, when to save money the founders built their first servers from cheap and often second-hand parts. With $9 billion in cash the company no longer needs to pinch pennies, but they have found that home-built computers let them optimize the systems for speed, flexibility… and energy savings. The energy requirements of huge data centers, such as those operated by Google, are enormous. So enormous that they have a group that specifically scouts out real estate near cheaper hydroelectric sources of energy that happen to be near major internet fiber optic backbones.
Martin Reynolds of the Gartner Group estimates that this focus on efficiency has led to Google’s computing costs being half that of it’s rivals and a tenth that of corporate technology groups. Not chump change when a company like Google spends a couple billion a year on computing infrastructure. Alan Eustace, Google’s VP of systems engineering, claims that they can deploy systems faster, cheaper, and at scale larger than their competitors at Yahoo and Microsoft, and that this can give them up to a five year lead in the market.
Of course there are the critics of this strategy, notably Bill Gates himself. Most claim that it’s not a necessary internal competency and that it de-focuses the company from their true mission.
But as lean manufacturers have known for a long time, it’s not all about such a narrow definition of cost. By investing heavily in server manufacturing and design, they have been able to create (or stumble upon) technologies and applications that have given them a competitive advantage. They can then deploy those changes faster, and react to positive and negative feedback faster… similar to how in-house lean manufacturers can react quickly without having to deal with supposedly cheaper parts sitting in containers on ships coming from China.
In the case of Google this has led to the use of lean manufacturing techniques. Urs Hölzle, Google’s VP of operations, is working on ways to optimize reliability and performance. Maintenance is optimized by using velcro to hold server components together… a characteristic of the original home-built servers. As the limits of hardware reliability are reached, software is optimized to take over and automatically spread data risk across multiple redundant machines.
Google is even looking at creating its own high performance silicon and chip designs. Definitely not what we’d think a typical internet search company is working on. But this internet company knows more about manufacturing than many manufacturing companies.