A New Breed in the Computer Biz

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The general-purpose server is akin to the electric motor 100 years ago, which Sears used to sell with 20 or so attachments," says Weiss. "After a while, companies came along to make far superior fans, toasters, and dispose-alls."

This new approach is taking off mostly with so-called Web 2.0 companies, which are dealing with unprecedented challenges as they try to develop full-blown applications via the Web, rather than just static Web pages. Consider the plight of Aber Whitcomb, CIO of MySpace, the red-hot social-networking site frequented by indie rock fans and legions of teens. MySpace is currently adding a million new customers every six days -- and it has no idea when that growth will slow.

That means Whitcomb can't afford to keep buying big iron every few years, as was common in the past. Instead, he uses new, clustered storage gear from 3PAR Data to process traffic and is starting to use equipment from Isilon to store certain kinds of content. One reason: Both let him add modules as he goes, with minimal human interaction. "We're always on the lookout for new hardware approaches because we have to be on the cutting edge," says Whitcomb. He figures he would have had to buy 40% more conventional storage to match the capability he gets with 3PAR.

"THE LINES ARE BLURRING."

Other startups have even bigger plans: To alter the basic layout of the data center as it's known today. Rather than focus on making one component of a server faster -- say, a speedier processor or a bigger storage bank -- these companies are focusing on eliminating bottlenecks within these various kinds of gear. Fabric7 Systems in Mountain View, Calif., just began shipping a new kind of server that's also loaded with high-speed networking technology and software.

That way, when a customer receives an online transaction, the Fabric7 server can not only process the order but can also set up the appropriate Web connection, whether its an e-mail, or a higher-bandwidth link to connect a voice-over-Internet-protocol phone call, or even a supersecure link to complete a billion-dollar trade for a Wall Street bank. "Servers, switches, networks -- all the lines are blurring," says Sharad Mehrotra, who developed servers for Sun before co-founding router maker Procket in the mid-1990s.

If these hardware pioneers succeed, they could make things painful for today's traditional server companies. After all, one of the newcomers' goals is to help companies get more out of less hardware. "In reality, the $20 billion storage market should be a $10 billion industry," says David Scott, CEO of 3PAR Data, whose storage gear has so-called thin provisioning software that lets companies use only as much capacity as they're programs actually demand rather than set aside vast amounts of extra room just in case traffic spikes.

FIVE-MINUTE JOB?

For a possible glance at what's ahead, consider Savvis, even though it's struggling mightily to deal with some big problems. It's burdened by losses related to the U.S. assets of Britain's Cable & Wireless, including 15 big data centers. And it's coping with the scandal surrounding its former CEO, Robert A. McCormick, who left Savvis after allegedly running up a $200,000 tab at a New York strip club.

But before he left, McCormick oversaw the development of a "virtualized service utility" that's built with storage gear from 3Par and servers from upstart Egenera. This infrastructure lets Savvis continually adjust how its servers, storage banks, and network capacity is allocated, according the needs of customers such as Reuters and Proctor & Gamble (PG). Rather than run their own data centers, customers can order what they need -- less on holidays, more when they're closing the quarterly books.

Indeed, while it normally takes 90 days for a company to prepare its data center to roll out a new application, Savvis claims it can do that in minutes. "We can take an electronic order...and have it up and running in five minutes," says Vice- President for Product Management Vincent Dimemmo.

BACK TO BUSINESS.

Will a new crop of industry powers emerge? Many will undoubtedly be purchased, and many will fail. But a number of these Hardware 2.0 pioneers say they've noticed a pickup in interest in the last 90 days.

Azul's Dewitt thinks CIOs have finally finished making sure their companies have the IT systems to comply with financial-disclosure regulations, such as Sarbanes-Oxley. "They've spent the last two years in compliance lockdown," says Dewitt. "But I've sat down with 15 or 20 CIOs in the last month, and it's clear they're getting back to the business of trying to stick it to their competitors -- which at the end of the day, is what you're supposed to do with information technology."

Dewitt admits that while potential customers like Azul's vision, they're still waiting for proof that his company can deliver. "Look, we have an installed base of none, so we have no right to be arrogant." But if his technology -- and that of other computer entrepreneurs -- comes close to having the impact he predicts, the industry could be in for exciting, tumultuous years ahead.

Burrows is a senior writer for BusinessWeek, based in Silicon Valley .