How an unknown Taiwanese server maker is eating the big guys’ lunch

This story has been updated to remove references to Amazon.

It all started, Mike Yang says, with a conversation he had with Facebook’s vice president of technical operations in 2007 or 2008. Rather than source servers through a traditional vendor like IBM (s ibm) for its data centers, Facebook turned to Quanta.

Back then, Quanta didn’t sell servers directly to customers, it only built them for traditional server vendors who then put their name on them and sold them to customers. Fast forward a few years, and a majority of Quanta’s server revenue stems from direct deals — 65 percent in 2012, and a forecasted 85 percent this year. Now, it counts other large-scale server buyers such as Rackspace among its customers.

Mike Yang. Source: Quanta
Mike Yang. Source: Quanta

Yang, the man in charge of Quanta’s cloud computing business unit, beamed during an interview on Thursday as he spoke about how the company can directly offer energy-efficient and high-performance products for webscale customers and smaller ones, too. If the Taiwan-based hardware maker’s 85 percent forecast proves out, the company could become a more recognized supplier for cloud computing venues, further threatening old-line server vendors like Hewlett-Packard (s hpq) and Dell (s dell).

The company, with U.S. headquarters in Fremont, Calif., didn’t show projections of server revenues in dollars or server shipments in total but said it shipped 1.2 million server motherboards in 2012 and plans to ship at least 10 percent more — 1.32 million motherboards — this year.

Quanta appears to be on a roll with Quanta-brand direct server sales growth. At the same time as it’s doing custom jobs for webscale customers, it’s also promoting direct sales of other gear, including off-the-shelf storage and network appliances, to smaller customers through a subsidiary Quanta established last year, Quanta QCT.

The company has a few strategies in mind for shifting from an original-design manufacturer to a name brand in its own right, at least in servers. It sees full racks of equipment, under the Rackgo name, as a major seller this year. The Rackgo offering, which includes compute, storage and network appliances, can appeal to customers because there’s simply one company to go to when problems arise, Yang said.

And then, of course, there’s the Open Compute Project — the Facebook-led open-source hardware initiative that kicked off Quanta’s evolution as a direct server vendor. Quanta will come out with multiple products based on Open Compute specifications later this year, although exact timelines weren’t immediately available.

Next month, the company will open an office in Seattle in order to be closer to customers. Yang said Quanta has several customers in the area, although he declined to name them. Microsoft, (s msft) which is building huge data center capacity for Windows Azure and its Live offerings, is a short drive from Seattle, in Redmond, Wash., and Seattle is much closer to Quincy, Wash., a hotbed of data centers, than the Fremont office. Quanta will add more U.S. offices for sales and service this year, Yang said.

Quanta is also opening up to the press, rather than silently working behind the scenes. That campaign started last year.

The company’s business model has undergone a sea change. If the upward trajectory keeps up and the server-market dynamics keep shifting in its favor, Quanta could become one of the stalwart name brands of IT technology.