Facebook Trumped Google Today — And Embarrassed A Lot Of Other Companies, Too

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When a company boasts about being “open,” the best way to figure out what they’re really trying to do is to find the competitor who does the same thing, but closed.

Despite the rhetoric of the true believers, being “open” has a business purpose: it’s a great way to suck the value out of a market that a competitor dominates.

Two quick examples spring to mind:

  • IBM (and many others) threw their support behind Linux to commoditize the operating system market. The goal was to break Microsoft’s lock on the PC desktop, or at least prevent Microsoft from extending its desktop dominance to the server room.
  • Google is using Android OS to commoditize the smartphone market. Google doesn’t care about making money from smartphones like Apple or RIM — it only wants to make sure that they guide people to Google online services, particularly search. The best way to guarantee that is to flood the market with relatively cheap devices that come with Google services built in.

Which brings us to Facebook. What was it doing today when it released the details of its new data centre design to the world?

The company couched it in altruistic terms (they always do), saying it had benefited from open source software and wanted to give back to the community.


But Facebook is also trying to commoditize one of Google’s most important assets: its data centres.

Traditional wisdom says that Google is a media company — it makes its money selling ads. It’s also a software company — it writes lots of interesting and useful Web-based programs (mainly search) to keep people on its sites where they’ll see the ads.

But those software programs run on massive banks of specially designed hardware scattered in data centres around the world. Those data centres are a huge competitive advantage — nobody else has been able to scale up so fast or efficiently, and Google wants to keep it that way. That’s why it keeps its data centre design a closely guarded secret.

Facebook is finding itself in the same business — it writes software and sells ads, but what it’s really doing is figuring out a way to make gobs of money from hardware running in a data centre somewhere.

But it’s still tiny compared with Google. It has about one tenth the employees and revenue. It’s been leasing its data centre space for seven years. It would take tons of funding and five years or more to equal Google’s data centre footprint.

So instead, Facebook took some of its smartest engineers and had them design their ideal data centre from scratch. They came up with something that looks really good — it’s more reliable and uses way less power than the average data centre today.

Then they opened it to the world. Now, any company interested in building or improving their own data centres can take that design and improve on it and build it into their own data centres.

That’s why Rackspace and Zynga and Twitter and Dell all had representatives there today.

As Facebook put it, they want to “move the entire data centre market forward.”

That helps everybody — except the company that gets a huge competitive advantage out of keeping its data centre design secret.

A final thought: Facebook also made Google — and every other company that has bragged about investing tons of R&D money in data centre design — look really silly by explaining that it took three engineers about a year and a half to come up with something much better.