Data Center ODM Giant Quanta Targets Channel Through QCT

Quanta Computer, the huge Taiwan-based original design manufacturer (ODM) that provides the equipment powering the data centers of such companies as Facebook and Amazon, has set up a U.S.-based branch office aimed at developing a market and a channel for its products.

Quanta on Wednesday said at the Open Compute Summit, held this week in San Antonio, Texas, that it has launched QCT, a Fremont, Calif.-based company that is building a channel for Quanta-branded server, storage, and networking products.

Mike Yang, general manager and vice president of QCT and general manager and vice president of Quanta's Cloud Computing business unit, said his company waited until the Open Compute Summit to unveil QCT because of the importance of that event, which springs from the Facebook-led Open Compute Project, to building data centers.

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"Open Compute is trying to optimize data center solutions," Yang said. "We're big contributors to the Open Compute Project. So this is the right opportunity for us to announce QCT."

Quanta is one of the top manufacturers of mobile and desktop PC, server, storage, and networking equipment, with annual revenue of about $37 billion. However, its customers -- which according to industry sources but never confirmed publicly by Quanta, include Apple, Hewlett-Packard, Dell, and Amazon -- either put their names on the Quanta products they sell or stuff huge quantities of non-branded Quanta products into data centers. As a result, Quanta has traditionally done little or no selling of its own branded products. Quanta has publicly acknowledged Facebook as a customer.

QCT is for the first time selling the same server, storage, and networking equipment it offers to its ODM customers, including Facebook, through the channel, Yang said. The company has already signed Synnex and ASI as distributors, and has also signed up multiple solution providers, he said.

"Our target is to optimize the configuration of rack-mounted solutions from off-the-shelf components built by Quanta," Yang said. "These solutions are integrated to reduce power consumption and cooling."

While the solutions included integrated server, storage, and networking components, they follow Facebook's Open Compute Project and so they are not proprietary converged infrastructure solutions, Yang said.

"Our target customers are midsized to large enterprises who want the efficiency and highly-engineered standards Quanta provides but who are not big enough to need Quanta's ODM services," he said. "Our position is, go after data center customers who can leverage the best standard products, customers who are looking for the highest-value, not the lowest price."

Next: Building A U.S. Business Channel

Quanta has a very good reputation for product quality, but it is stepping into a very crowded data center components market with the opening of QCT, said Erik Stromquist, COO of CTL, a Portland, Ore.-based system builder and distributor of components to the channel.

CTL has been working with Quanta servers for some time, and has had quite a bit of success with them, Stromquist said.

However, he said, Quanta is coming into a very crowded market.

"I think Quanta is trying to expand from its low-margin ODM business into a higher-margin business," he said. "The challenge for them is to build a successful business channel. It's the first time for them."

Quanta has built a strong name for itself with major customers such as Facebook and Amazon, Stromquist said. "No one disputes Quantum's products," he said. "But the channel is a different animal."

QCT plans to use Synnex, ASI and possibly other distributors to develop a channel-only business in Quanta-branded products, said QCT's Yang. The initial selection of Synnex and ASI was mainly due to their proximity to QCT's Fremont, Calif., location. In addition, Synnex is also part of the Open Compute Project, Yang said.

Nelson Wang, senior director of sales and marketing for QCT, said the company is launching a premier channel program for select partners on an invitation-only basis. Such partners will have access to such benefits as market development funds, extended RMA and warranty support, as well as a password-protected partner portal, Wang said.