x86 Hardware is Commodity

I frequently hear this about server platforms, but it is also sometimes said about x86 storage hardware; meaning that "it's all the same." It seems to make sense, and most people nod their head knowingly when they hear it.

The problem is that it is completely false.

What does it mean to be commoditized?

To clarify here, the words commodity/commoditized are misused in this instance. Commodity just means "something of use or value." The term fungible is really what is meant; replaceable or interchangeable- like currency or crude oil. The best hallmark of a fungible good is price is usually the sole determiner of demand. That means absolutely zero differentiation between goods. Let's test this definition on servers and storage.

Commodity Servers

Let's start with servers- Are there server vendor's who's entire value proposition is based around acquisition cost? Sure- Super Micro is the first that comes to mind and Dell built an empire on "good enough and cheaper."

The problem is that there are still vendors innovating in this space, and capturing sales with their innovations. HP is still the leading x86 server vendor overall as well as x86 blades. If Proliant servers are really the same as PowerEdge servers, why isn't the lower cost option from Dell dominating the market? Cisco really sinks the server commodity theory. If x86 servers were truly commodity, would a new vendor entering the market be able to capture such large amounts of marketshare in a short period of time unless they were significantly cheaper (which by all accounts UCS is not)? Absolutely not.

Commodity Storage Hardware

Clearly servers haven't been completely commoditized yet, what about storage hardware? Leaving tiny niche players out and focusing on mainstream storage vendors, there are only really two that use what are basically off the shelf servers as their hardware- Dell Compellent and HP Lefthand. And if you take the Dell/HP names out from in front of them, they are really ignorable niche products too.

What about EMC? Don't they use industry standard x86 components in their storage platforms?

Now we're starting to hit the mark- the key phrase in that question is industry standard. This is really what x86 servers and the components that make them up are- industry standard. Well understood and lower cost due to economies of scale. They allow server and storage vendors to stop wasting development and engineering cycles on custom ASIC and CPU designs, and focus on packaging these industry standard components in new ways to add value to their products.

Chad Sakac has a great video on Virtual Geek where he talks with Bill DePatie from EMC's hardware engineering team. As Bill demonstrates the hardware for Chad, count how many times you think "hey that looks just like that supermicro server in my home lab."

Conclusion

Are there parts of the x86 market that are a sea of clones that complete solely on price? Of course. But to say it's all commodity does a great disservice to the hardware engineering teams at HP, Cisco, EMC, and others.