HPE gives up the battle for tier 1 data center customers


A few weeks back I told you how white box vendors, those Chinese-made, unbranded server vendors that compete with HP Enterprise and Dell EMC, were taking a sizable chunk of the business from the brand-name vendors.

Well, now HPE has made it official and announced it will no longer try to sell commodity hardware — the cheap, low-end servers used in abundance in public-facing data centers — to tier 1 customers like Amazon, Facebook, Google and Microsoft. 

HPE president Antonio Neri made the announcement at HPE’s analyst day event last week. He added that HPE would continue to sell higher-end servers to those vendors.

It’s not an original strategy. Oracle made the same move in 2010 when it acquired Sun Microsystems. One of the first announcements Larry Ellison made was that Oracle would not pursue the low-end commodity market, and he’s been true to that word. The company doesn’t sell a lot of Exadata, Exalogic and other network appliances, but when it does they are massively decked out with lots of CPU cores, memory, flash storage, and traditional storage, and they sell in the millions.

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