How Amazon Followed Google Into the World of Secret Servers | Wired Enterprise | Wired.com

Extreme-scale disintermediation

"And now, according to James Hamilton, the man who oversees Amazon’s current data centers, the company is building its own servers in tandem with Asian manufacturers along the lines of Quanta and Foxconn, the outfit that famously builds Apple iPhones and iPads. Hamilton tells Wired that Amazon buys its server processors and memory directly from Intel, doing an end-run around middle men such as HP and Dell and other original equipment manufacturers, or OEMs.
Once you reach a certain size, says Hamilton, it only makes sense to build your own gear. Buying traditional servers gets too expensive. If you’re buying enough hardware to negotiate favorable deals with the likes of Intel — and you’ve got the means to hire people who can run this kind hardware operation — you can significantly cut costs by going straight to Asia."

How Amazon Followed Google Into the World of Secret Servers | Wired Enterprise | Wired.com