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Summary:

Smooth-Stone, an Austin, Texas, based company building servers using the chips found inside cell phones, has raised a $48 million initial round of funding from ARM, Advanced Technology Investment Company, Battery Ventures, Flybridge Capital Partners, Highland Capital Partners and Texas Instruments.

Smooth-Stone, an Austin, Texas-based company building servers using the chips found inside cell phones, has raised a $48 million initial round of funding from ARM, Advanced Technology Investment Company, Battery Ventures, Flybridge Capital Partners, Highland Capital Partners and Texas Instruments. The news is a big deal, not only because Smooth Stone is attempting to solve the power problems plaguing IT by building a server that uses an ARM-based processor more likely found inside of a cell phone, as opposed to the x86 processor found inside most computers, but it’s also a systems company that’s managed to raise a chunk of money in a capital-constrained environment.

Smooth-Stone CEO Barry Evans has been courting his investors for a long time, but it wasn’t until enough investors came on board with sufficient money that folks like Battery Ventures, which is leading co-led the round, or Highland Capital Partners and Flybridge, felt comfortable joining. Ken Lawler, a general partner with Battery, said that for Battery, the large number of investors and their willingness to fund Smooth-Stone all the way to customer wins, eliminated some of the risk associated with investing in chip firms. In recent years, several chip and systems companies have been forced to close their doors because they couldn’t raise their next round of financing.

Evans is taking the money and plans to detail the specifics of his firm’s product later this year, but it’s expected to be a full server using ARM chips as the brains, and a specially designed chip to help manage the networking. Smooth-Stone will go up against commodity hardware that uses Intel chips, as well as some of the servers like SeaMicro’s, which uses Intel’s low-power Atom chips. Other chip makers, such as Marvell, are planning to use the ARM architecture to build chips for servers, although ARM has said Smooth-Stone will be its bet to bring the architecture into the data center. The race is on to see what company and which architecture will win over the next generation data center.

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  1. $48 millions? Wow? I never understand why servers cost so much. Even if you rent a mid-level server, it will cost $150 per month. I can buy a decent server for $500. Where does the $48 come from? What does it do?

    -François Comeau-Lapointe

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    1. Your point is confusing. $48M is to develop the company and bring product to the market. You are comparing that amount to cost of buying or renting servers – the dots are a little difficult to connect. Will be good to get some clarity around it?

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    2. Francois,

      And you forget you get a virtual server for USD 10 per month with about the same capability as some of the low powered CPU servers. However the battle here is power consumption, depending on which part of the world your datacenter is in the power(+real estate) cost per physical server per month is anywhere between 20 USD to 120 USD. The size of the savings that can be achieved either through virtualization or investment into low powered server architectures, is simply too massive compared to the 48m USD investment.

      -Tarun

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    3. The difference is with ARM, you can own the whole server for $150, not having to rent it for $150 per month anymore. The idea is that performance can be the same as with Intel while cost and power consumption can be much lower than Intel.

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  2. It would be very interesting to see someone like Amazon or Rackspace build out using servers like this. It would fit in nicely as another sized slice of computing power that could be used for a different price point.

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  3. It is nice to finally see an article on embedded systems. My first attempt at building an embedded sys was early in 1999 although I’m not an expert, i was able to build some nice systems
    routers, video boxes, etc, out of ordinary computer hardware.
    i think it would be appropriate here to mention that i couldn’t have done many of this projects without the help of

    arm board

    .

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  4. [...] justement parlé dans mon billet du nouveau marché des serveurs low-cost. Il s’avère que GigaOM a posté un billet pour parler de la jeune startup « Smooth Stone » ayant [...]

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