It’s a step higher than a vSphere/Proxmox cluster.
https://newsletter.pragmaticengineer.com/p/the-history-of-se...
Traditional hosting still, to some extend, struggle to provide the API, on demand, drive requirements for modern developers, who expect to be able stand up a bunch of virtual machines in a minute or so, especially if you also want a new private network, maybe some IPs and storage pools.
Having a single provider for your entire stack, software, hardware and network avoids the annoying back and forth with vendors, blaming each other. Having just one support contract for your entire stack is a pretty large plus.
If you don't like vSphere (who does?) you can do all that in Proxmox.
There is some company who for reason X and Y rather (or are obligated to) do on-prem for their hosting needs. But setting up a full (or several) racks, with all the required equipment for proper networking, storage, etc, can be quite the hassle. And if you want cloud-like functionality (completely API manageable virtual network, VM, storage pools, ...) it's another can of worm. Having a "plug'n'play" cloud-like system on-prem that do not require several engineers who know 10's of different vendors tech is definitely worth the premium for those company.
Slightly less pithy: they're selling rack-scale systems, with power, hardware, network, and control plane software all integrated. Something that presents to the user as something more like API to interact with than a pile of servers to be managed.
API driven, have "elastic resources", etc, etc. Rather than bolting together various solutions you get to have a "Cloud-like" stack in your own datacenter.
If the answer is no, then you might own the hardware on paper, but you don't control any of the software that makes said hardware useful.
If the answer is yes, on the other hand, then one must ask who is paying for those updates, because that can't be sustainable.
Two points about your last point. First, software improvements benefit all customers; as the business grows, the effective cost per customer shrinks. Also, most customers grow their Oxide deployment or will replace hardware after a depreciation cycle. The sustainability of investments into the software (and the product generally) is on solid ground.
what proprietary software stack? they just publish it all on https://github.com/oxidecomputer/ .
If you idea of installing a server is "terraform", you're not going to get it.
There's a lot of stuff that even if you put majority in the cloud, you want local deployment for security (inc. "operate when internet is out" security/reliability) and latency reasons.
For various reasons, vmware was pretty strong contender in this. Oxide racks are comparable in "sanity of mind" in deployments, and last time I was in a company that could use that the only major breaker was lack of ability to ship a raw VLAN to a VM, to enable direct replacement of existing vmware stack. But if it's not already fixed, it is not particularly hard to fix.
And Oxide sells a complete hardware + software solution, including virtualization and SDN - essentially it's a physical equivalent of up to 32 node virtualization cluster per rack, with builtin SDN and SD-SAN, that already has features to combine for more.
Oxide just recently talked about that actually the LLM people do want to buy Oxide. Because turns out, doing everything around LLMs also requires compute, and quite a lot of it. And when you already have to deal with massive issues to run a complex advanced Nvidia stack you might not also want to worry about what firmware bugs Supermicro is delivering.
If you are not one of the hyperscaler who already has all the CPU based infrastructure on their own cloud stack (google, amazon, facebook) then Oxide is quite interesting.
Also as for this shrinking/small market claim. About 50% of IT spend is still outside of the cloud. While nobody know the real number, its still a gigantic market, much bigger then most people realize. And it might not be shrinking because the bad economics of cloud are becoming increasingly clear to many company. Along with other trends such as making computing more local, not letting US companies control everything.
> You are like a fancier version of Dell or Supermicro.
Dell has a market cap of 80 billion $, Supermicro has 20 billion $. Must really suck to be them I guess. I'm sure Michael Dell wishes he had done something worthwhile with his live instead. I mean he could have worked for Digital Equipment Cooperation instead then he might not have ended up being such a loser.
I feel you are being really dismissive talking as if aiming for that is somehow not worth doing.
For a startup, if the thesis is to take market share away from those two, it's actually not such a good story. You need a product that is 10x better than the competition, and I'm not convinced that the enhancements to firmware, reliability etc. amount to a 10x jump in business value prop. You aren't making silicon. You are still ultimately a purveyor of other people's IP.
Maybe if people that bought Dell had a deep love for Dell products and were deeply integrated unable to move, but even then 10x is a waste exaggeration.
But if you have any serious academic literature that underlies this 10x claim I'm happy to take a look.
> You aren't making silicon. You are still ultimately a purveyor of other people's IP.
And neither does Dell and they are worth 80 billion $. And AMD doesn't make semiconductors, so they relay on other people IP. And TSMC doesn't make their lithographic machines or many other things, relaying on other people's IP. And all those materials relay on other people IP to be brought to market in the first place.
This is just a silly argument that for some reason puts CPU design companies as 'the real deal' and everybody else is somehow not good enough.
Historically good systems companies make just as good margin as most CPU design companies, specially those that don't have near monopolies.
> it's actually not such a good story
They are making inroads in a market that is 100s of billion $ large and people invested 300M$+ in them because they see costumer demand. If that's not good enough for you then I don't know what to tell you. I wish any of the starups I have worked at that kind of opportunity.
It seems to me you operate in a sense where anybody that doesn't go for a monopoly in a 5 trillion $ market is somehow not 'worthy' of being a startup. That just a very strange perspective on reality.
Yes, cloud is huge, etc. But there's a very big iceberg of on-prem.
Brian is trying to recreate Sun and using investor money to do so.
Good luck to them but I can't see it ending well.