I was skeptical as well, if only because just being a better product isn't enough to win the market. Everything we hear about Oxide sounds like an impressive green field implementation of a data center, but is that enough? Do the people making buying decisions at this scale care if their sysadmins have better tools?
> Do the people making buying decisions at this scale care if their sysadmins have better tools?
Look at who oxide is selling to and for what reasons.
It's about compute + software at rack scales. It does not matter if it is good it matters that it's integrated. Gear at this level is getting sold with a service contract and "good" means you dont have to field as many calls (keeping the margins up).
> Everything we hear about Oxide sounds like an impressive green field implementation of a data center, but is that enough?
Look at their CPU density and do the math on power. It's fairly low density. Look at the interconnects (100gb per system). Also fairly conservative. It's the perfect product to replace hardware that is aging out, as you wont have to re-plumb for more power/bandwidth, and you still get a massive upgrade.
As someone only tangentially familiar with this domain, I have questions about this:
> Look at their CPU density and do the math on power. It's fairly low density. Look at the interconnects (100gb per system). Also fairly conservative. It's the perfect product to replace hardware that is aging out, as you wont have to re-plumb for more power/bandwidth, and you still get a massive upgrade.
It sounds like the CPU density and network bandwidth are not great. If it's only suitable to replace aging systems, does that not limit their TAM? Or is that going to be their beachhead for grabbing further market share.
I am not saying that I fully endorse the characterization of the parent, but it is true that we started selling these systems two years ago, and new hardware comes out with better stats all the time.
Given how small we are, new designs and refreshes take a while. Part of growing as a company is being able to do this more often. We'll get there :)
For a small company, a limited TAM isn't a problem (and honestly is probably an advantage) if the overall market is big. Datacenters as a whole are a ~$30B market per year. The last thing you want as a small company is a bunch of different customers pulling you in different directions. By limiting your TAM, you limit the number of problems you need to solve for a few years, and if everything goes well and you start outgrowing your TAM, you can expand later.
Is there a risk that the established players can commoditize oxide’s complement here? Is oxide’s product a feature that the big companies can just clone? I’m not sure to be honest. I have followed oxide through the news and am happy to see some progress in this area, I just want to know how to understand their success in the proper context.
The complement of a set consists of everything that is not in the set. Having your complement commoditized is a good thing, it refers to everything your users need that is not part of your value proposition. If it's commoditized, your users have easier access to it hence use more of it, which drives up their demand for the things that _are_ part of your value proposition.
Well it would be in oxide's interest to do that before their competitors do if it's profitable, right? Wouldn't the more established companies have more money to invest in research and development to try to beat oxide to their own follow-up, now that the market has spoken in oxide's favor?
Datacenters seem to be increasingly power/cooling (i.e., power)/water (if they use it) limited. I'm wondering if the lower CPU density really matters when 75% of a DC risks remaining empty because the power budget is maxxed out already.
And yes the 1-for-1 replacement of older racks is probably a key selling point too.
I know I have been involved in multiple efforts to move the same workloads into and then out of the cloud, as corporate budgeting requirements prioritized either capex or opex at different times.
