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Acquisition adds to custom-chip intrigue in AWS infrastructure

AWS has agreed to acquire an Israeli semiconductor startup, which could mean it’s looking to design its own hardware down to the chip level.

Amazon confirmed this week it has agreed to acquire an Israeli semiconductor company, fueling anticipation among IT pros that custom chip architectures may soon improve AWS performance.

Annapurna Labs Ltd., is an Israel-based semiconductor a startup in stealth mode with U.S. headquarters in San Jose, Calif. An Amazon Web Services (AWS) spokesperson would not offer details on what the acquisition is for or what it will mean for customers, but this move is in keeping with a series of hires made last year in Austin coming from failed ARM chipmaker startup Calxeda.

Amazon is known for designing its own networking, storage and server equipment, which was most recently publicly discussed in a presentation at AWS re:Invent 2014 by distinguished engineer James Hamilton.  

Thus it's easy to connect the dots and conclude that AWS infrastructure will soon feature its own server chips along with the rest of its custom hardware.

"A chip designed for a very specific application can theoretically be more powerful and less energy-hungry than a generic Intel chip," said Aaron Rankin, an AWS customer and CTO for Chicago-based Sprout Social, makers of social media tools for businesses. "I suspect that may yield better services, but more certainly it will yield lower costs for Amazon, and some of that may be passed on as lower prices."

AWS has also been cozy with Intel, which supplied custom "Haswell" chips for AWS's recently released C4 line of instances. That relationship could change with this acquisition, but one AWS reseller partner thinks AWS will continue along both the commercial and internal-development tracks for its chips.

For customers, I think this translates into more performance.
Kris Bliesner, CTO of 2nd Watch, Inc

"I don't see them replacing Intel or AMD as the scale in which they are needing equipment is likely orders of magnitude larger than what this smaller company can provide," said Kris Bliesner, CTO of 2nd Watch Inc., based in Liberty Lake, Wash. "My guess is that it will help the proprietary datacenter components that they are building -- for customers, I think this translates into more performance."

Buying a company demonstrates a strong commitment when AWS already has unmatched purchasing power from commercial chipmakers, said Richard Fichera, analyst with Cambridge, Mass.-based Forrester Research Inc.

"They're making a real bet that they have sufficient volume to be able to undertake all the accompanying expenses that come with designing your own chip architectures," he said.

While Fichera didn't have any inside information on what the company was bought for, "a reasonable hypothesis would be that this could be some kind of ARM chip, for a combination network and protocol processing."

In other words, an integration of network processing and CPU, to add more intelligence in the network data path, Fichera speculated.

"Their business is extremely network intensive, and this is the Holy Grail for some types of network architectures," Fichera said.

Beth Pariseau is senior news writer for SearchAWS. Write to her at bpariseau@techtarget.com or follow @PariseauTT on Twitter.

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