The deal provides HP an opportunity to be a much bigger player in the scale-out market, where most of the growth in servers is happening, said Patrick Moorhead, an analyst with Moor Insights & Strategy.
"Success will depend on the ultimate cost and flexibility model both HP and Foxconn can bring to the table," he said, adding that Quanta is the biggest potential loser in a market that has no loyalty to brands.
IBM is also making moves to better tackle the cloud server market. It has started licensing the design of its Power processor to other hardware makers, which it hopes will build new low-cost servers for cloud providers.
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