SANTA CLARA, Calif. – A few years ago, executives from companies like Quanta wouldn't give interviews. They lived in the shadows of customers like Dell and Hewlett-Packard, quietly making their products in factories in Taiwan and China. Times have changed.
Flush with orders from big data centers, Quanta and its peers are on the rise. To feed its growth, Quanta is hungry for simpler silicon, more software expertise in power management and software-defined networks--and just a little limelight.
"Traditional OEMs no longer have the advantage, we do," said Mike Yang, general manager of the cloud computing group at Quanta
Computer Inc., a subsidiary of the $37 billion manufacturing giant. "The
business model is changing and it provides us a very good opportunity."
Quanta is one of a handful of big Taiwan companies traditionally known for building desktops, notebooks and, more recently, smartphones. It snagged a surprise windfall about five years ago when Facebook awarded it a contract to build a large number of integrated racks of servers, switches and storage systems.
"At that time [the deal] was roughly a single digit percentage of my total volume," said Yang. The Facebook deal "had a big impact on us and was quite surprising because we usually only provided products to OEMs," he said.
Facebook was following the lead of other big data centers such as Google and Microsoft who had come to Taiwan, too. They realized they could order custom-built servers that better suited their needs and get them at lower cost rather than pay a premium for the pre-defined systems from a Dell or Hewlett-Packard that also were made by Taiwan companies such as Quanta.
About two years after its first Facebook deal, Korea Telecom sent Quanta an unexpected request for a quote for racks in its data centers. "We asked them why they came to us, and they said they heard we were doing business with several of the biggest data centers in the world," Yang said.
The deal got Quanta started pursuing the market more proactively. Last year, it officially created its data center group.
Quanta still makes systems for OEMs like Dell and HP, but last year its direct sales to big data center customers became the majority of the group’s total business which expanded by 12 percent.
One of Quanta's rivals is Wistron, a former arm of Acer that now makes PCs for OEMs. It started getting orders for data center racks from the big data centers a few years ago, too. Last year it spun out a separate company called WiWynn Corp. to take the data center business and eliminate any possible conflicts with its OEM customers.
For its part Quanta still works both sides of the street. "When the OEMs come to us, we welcome them," Yang said.