Amazon boosts use of Rackable for data center systems |
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Amazon boosts use of Rackable for data center systems
Is Amazon.com building or leasing new data centers to grow its core ecommerce business and its cloud computing services? Amazon has long been secretive on the subject of its data center strategy. But here's a small clue: Amazon is doing more business with Rackable Systems, the computer server company. According to Rackable's annual report, sales to Amazon increased by $30 million in fiscal year 2008.
Amazon represented $86 million in revenue for Rackable in fiscal year 2008, up from $56 million the previous year. Rackable, for its part, is increasingly reliant on Amazon as a customer. The company's annual report shows Amazon represented 35 percent of its revenue in fiscal year 2008 -- making it the company's biggest customer -- up from 16 percent the previous year.
Microsoft and Yahoo, which had been Rackable's biggest customers a couple years ago, both dropped as a percentage of the company's revenue (Rackable reported a sharp drop in overall revenue in 2008 and cut its workforce by 15% this January).
Data centers have always been the backbone of Amazon's huge ecommerce platform. The company's web services business, which provides computing storage and power via the web, was meant to tap Amazon's excess data center capacity. But it's not clear if Amazon has had to add capacity as the web services business has expanded.
Amazon recently hired away data center expert James Hamilton from Microsoft. Hamilton is a specialist in so-called "containerized" data centers -- putting data center infrastructure into shipping containers which can be more easily scaled up or down. Last month I asked Andy Jassy, the head of Amazon Web Services, about whether Amazon is shifting to the containerized model and he said it is "one of several approaches" the company is looking at.
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