Google Taps IBM, Rackspace to Dent Intel's Hold on Server Chips

  • Web giant has software to switch to IBM, ARM-based servers
  • Company to give away server design built with Rackspace

Google has technology to easily switch away from Intel Corp. server chips and is helping other companies do the same, a potentially worrying development for the dominant provider of processors that power data centers.

Google, the main division of Alphabet Inc., said Wednesday it has built software that lets it use OpenPower chips from International Business Machine Corp. to run some of the computer servers in its many massive data centers.

Google also said it’s developing a data center server with cloud-computing company Rackspace Hosting Inc. that runs on a new IBM OpenPower chip called Power9, rather than Intel processors that go into most servers. The final design will be given away through Facebook Inc.’s Open Compute Project, so other companies can build their data center servers this way, too. 

The moves show how keen Google is to use chip suppliers other than Intel, or to raise the threat of switching to bargain for lower prices from the world’s largest chipmaker. As one of the world’s biggest operators of computer servers, Google’s hardware decisions are watched closely by companies across the industry. Rackspace shares jumped 6.6% to close at $23.65 on Wednesday, their biggest one-day gain since March 11.

Google is also working with Qualcomm Inc. to evaluate ARM-designed chips for its data centers. Intel has more than 99 percent of the market for processors that run data center servers. That division at the chipmaker provides half of its profit and is its chief source of revenue growth.

Google hasn’t switched to servers running on OpenPower chips, or to processors based on designs by ARM Holdings Plc, but Google is now ready for a day when it makes sense to migrate, said Gordon MacKean, a Google senior director of Infrastructure.

"It’s going to be a performance-per-dollar decision that drives us to make a fundamental switch," he added in an interview.

“We continue to be great partners and work closely with both Google and Rackspace to ensure Intel is best for their workloads," said Intel spokesman Mark Miller. “But we also recognize it’s a competitive industry and understand the need for ongoing experimentation."

IBM and a group of big technology companies, including Google, Nvidia Corp. and Samsung Electronics Co., formed the OpenPower Foundation in 2013, in part to seek alternatives to Intel’s data center chips.

Every line of software code that Google writes is now tested to make sure it can run on OpenPower or ARM-based chips, although Google’s work with OpenPower is more advanced than its work with ARM, MacKean said.

Google has got "a number of Google apps" to run on servers powered by IBM chips, Maire Mahony, an engineering manager at Google, said Wednesday at the OpenPower Summit in San Jose, California. A Google spokeswoman declined to say which services run on OpenPower, but said the company has engineers dedicated to supporting OpenPower hardware.

Other companies that rent computing power, storage and other data center services from Google will also be able to easily run their own software and applications on the new servers that are powered by IBM’s OpenPower chips, said Mahony.

"We’re committed to open innovation and to optimizing performance and cost in data centers, and look forward to passing these savings along to our internal users as well as our Google Cloud Platform customers," Mahony wrote in a blog post Wednesday.

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