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Microsoft, IBM Join Facebook’s Open Compute Project

Jan. 29 (Bloomberg) -- The Open Compute Project, the industry group created by Facebook Inc. to spur development of more efficient computers to manage and store data online, is gaining more allies.

Microsoft Corp. and International Business Machines Corp. said yesterday that they’re joining the alliance, which includes Advanced Micro Devices Inc., Seagate Technology Plc and about 150 other members. Microsoft said it’s seeking to lower its own spending on equipment and make it easier for customers to adopt its Azure and other online services.

As more individuals and businesses use the Internet to store, analyze and share information, companies such as Apple Inc. and Google Inc. have built large data centers across the globe to handle the traffic. While Open Compute could expand markets by making servers more affordable and easier to customize, that equipment would be far less profitable for hardware suppliers such as Dell Inc. or Hewlett-Packard Co. Still, open standards are critical for speedier development and collaboration, according to Mark Zuckerberg, Facebook’s chief executive officer.

“From our perspective, it was much better to collaborate with the community and blow past what anyone else has done,” Zuckerberg said at an Open Compute conference yesterday in San Jose, California. “At this point, I think we’re quite far ahead.”

Zuckerberg said the social-networking company saved $1.2 billion by using Open Compute-based equipment instead of proprietary products from established makers of computers, storage equipment and networking switches. Since the hardware is more energy efficient, Facebook was able to conserve the equivalent annual energy usage of 40,000 homes, he said.

Open Compute

Russian Internet company Yandex NV and cloud-storage provider Box.net Inc. are also joining, Open Compute said. Microsoft, which has more than a million computers running in its data centers, said it will share its server designs.

“We want to drive innovation,” Bill Laing, Microsoft’s vice president of the cloud division, said at the conference. “We not only build software to run in our data centers, but we also license software to our customers and partners so they can run data centers.”

Open Compute is pushing hardware makers to develop computers, chips, racks and other components that buyers will be able to use as building blocks. While critical mass hasn’t been achieved yet, the alliance is also turning its focus to networking equipment, which is also becoming increasing commoditized and dependent on software.

Open Approach

Facebook, which founded Open Compute in 2011, chose to take an open approach because it had to ramp up its operations well after cloud pioneers such as Google and Amazon.com Inc. built up their own data centers from scratch, keeping designs and technology to themselves.

“When you’re the first company to design something, sometimes there’s an advantage to keeping it secret,” Zuckerberg said.

As more and more people access data, the odds of any single company figuring out how to deal with it efficiently goes down, said Jay Parikh, Facebook’s vice president of infrastructure engineering.

“If we really want to connect seven billion people, we’re going to have to work together,” Parikh said. “I don’t see it working any other way.”

To contact the reporter on this story: Peter Burrows in San Francisco at pburrows@bloomberg.net

To contact the editor responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net

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