Facebook Makes Its Own Hardware Now

Jun 18, 2014 05:10 PM EDT | Jordan Ecarma (j.ecarma@autoworldnews.com)

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Facebook CEO Mark Zuckerberg

Facebook CEO Mark Zuckerberg smiles onstage before delivering a keynote speech during the Mobile World Congress in Barcelona on Feb. 24, 2014. (Photo : Reuters)

Facebook has expanded into making its own networking hardware with an open-source switch design called Wedge.

The social network, which boasts more than a billion users worldwide, had to begin building its own hardware due to large loads of Internet traffic, Bloomberg News reported.

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"We've done this for racks, for the compute part of it, for storage and for other parts of infrastructure but there is this other lingering part, the network," Jay Parikh, vice president of infrastructure engineering, said at an industry event Wednesday, as quoted by Bloomberg News. "We were running into just a lot of things that slow us down."

The switch "looks and operates more like a server," according to the company. Wedge is directed by a Linux-based operating system.

As tech giants like Facebook and Google move toward spending less on machines, companies including Cisco Systems and Juniper Networks could lose out. Facebook's decision to develop Wedge is part of a larger trend toward reducing costs, Wired reported.

Google has long been designing its own networking hardware and is leading the movement toward more cost-efficient gear along with Facebook and startups like Cumulus Network and Big Switch.

Whether or not networking hardware is getting away from big brand names "has been question No. 1 on the minds of many investors any time the data center market comes up for discussion," said Jeffrey Kvaal, an analyst at Northland Securities Inc. who has the equivalent of a buy rating for Cisco, as quoted by Bloomberg News. "This is another bit of evidence to suggest that the trend is gaining further momentum," he said of Facebook's Wedge.

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