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Microsoft starts selecting its own components

by on17 October 2016

Let down by suppliers

Software king of the world, Microsoft is sourcing the parts for its servers itself rather than relying on its ODM partners.

According to Digitimes, Vole has always let its ODM partners choose the component suppliers, but has been worried about the quality it has been getting.

Microsoft's latest move follows similar changes to the component supplier selection processes at Google, Facebook and Amazon, the sources said.

Vole was the last to start appointing its own component suppliers. The others have seen it as a way of getting their costs down by having component suppliers to compete for orders. But Microsoft has been worried about potential defects in the servers and having more control over the quality which has been going under the tin lid.

While this is good for Microsoft customers, this sort of thing is bad news for the server ODMs who will lose a slice of profit.

Microsoft has begun appointing suppliers for components including cooling modules, chassis and slide rails.

Digitimes’ deep throats said Microsoft’s team will gradually retrieve the purchasing right for its server components. It may also prolong the manufacturing process when it is neccessary to identify the suppliers responsible for defective components.

Microsoft will also be sure it can have stable component supply when switching to a new ODM, giving the internet service provider more control over its server making partners.

Last modified on 17 October 2016
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