Wistron spins off cloud computing business unit for data center solution orders

Wistron, in order to avoid a conflict of interest with ODM clients such as Dell and Hewlett-Packard (HP) in its competition for orders for data center solutions, has spun off its cloud computing business unit as a wholly-owned subsidiary capitalized at NT$300 million (US$10.2 million), according to industry sources.

Originally, Dell and HP and other vendors obtained orders for data center solutions and then released ODM orders for servers and related equipment to Wistron, the sources noted. However, Wistron and Taiwan-based fellow maker Quanta Computer have begun offering white-box solutions for setting up data centers directly to Internet service operators as well as telecom carriers, and have secured orders from Google and Facebook, the sources said. The competition has impacted vendors' business interests and therefore they have put pressure on Wistron and Quanta Computer, the sources indicated.

Quanta Computer has started shipments to Facebook for its new data centers in Oregon and North Carolina, while Wistron will begin shipments in the second quarter of 2012, the sources noted. Taiwan-based ODM's white-box solutions can lead to at least 20% lower total costs in setting up data centers than brand vendors' solutions, the sources indicated.

The spin-off is expected to allow room for Wistron to operate its white-box data center solution business, including introducing new investors as strategic partners, the sources said.

Source : digitimes

Posted in: Computers,News