Hewlett-Packard reclaimed its server crown from IBM last quarter as the overall market contracted and Taiwanese vendors made big gains selling directly to Internet giants like Google and Facebook, according to an IDC report.
HP expanded its share of the market only modestly from a year earlier but IBM’s portion declined 4.5 points despite solid mainframe sales, to leave HP in the top spot. HP finished the third quarter with 28.1% of worldwide server revenue to IBM’s 23.4%, IDC said.
But the strongest growth was for the “ODM direct” segment which IDC broke out for the first time this quarter. It stands for original design manufacturers, which are Taiwanese firms like Quanta Computer, Wistron Group, Inventec and Compal, which sell partial and fully-built servers to the big cloud providers.
It’s a growing segment and one that threatens the incumbents. ODM’s accounted for 6.5% of server revenue last quarter, up 45.2% from a year earlier, IDC said. If the ODM category were a single vendor, it would be the third largest ahead of Dell.
Almost 80% of the ODM’s server revenue came from the U.S., primarily from sales to Google, Amazon, Facebook and Rackspace.
Overall, the server market declined 3.7% from a year earlier to $12.1 billion. It was the third consecutive quarter of declining revenue but IDC predicts improvement with a refresh cycle early next year. In terms of units shipped, volumes were about flat year over year, meaning average selling prices dropped.
Volume systems — mostly x86 servers — picked up slightly from last year, with 3.5% revenue growth. But sales of midrange and high-end systems dropped 17.8% and 22.5%, respectively, IDC said.
IBM fared worst of the top 5 vendors, with revenue down 19.4% due to “soft demand for System x and Power Systems,” IDC said. Dell retained third place with 16.2% of revenue, about flat from last year, while Cisco Systems and Oracle tied for fourth.
Cisco saw the most growth of the top vendors, with a nearly 43% revenue jump, IDC said.
Spotify has had its knuckles rapped by the Advertising Standards Agency (ASA) for an email that contained an uncensored “f” word.
The promotional email had the subject line, “Have you heard this song by Lily Allen? Give it a try. F-ck You”.
Contextually, the phrase refers to the song “Fuck You” on Lily Allen’s album “It’s Not Me, It’s You”, and the suggestion was genuine, generated automatically based on the listener’s previous selections.
Unfortunately, this particular Spotify customer chose to take it the wrong way and made a complaint to the ASA, which announced it would uphold the complaint on Wednesday.
Defending against the claim, Spotify said it “believed there was a clear difference between deliberate language use such as that and the context in which it was used in the ad” and that “…around 36 million recommendations were sent to users by e-mail every month and therefore over the years a significant proportion of its users would have had the same song recommended to them”.
However, the ASA had not received any other complaints, Spotify said. Upholding the complaint, the ASA ruled that it “considered the use of ‘Fuck’ was likely to cause serious offence to some recipients of such e-mails and therefore concluded that the ad breached the Code”.
Although no action is taken in isolated instances like this, the ASA chose to uphold the complaint “to ensure [Spotify's] future advertising contained nothing that was likely to cause serious or widespread offence”.
But what songs had this customer been listening to that would trigger this recommendation? Perhaps he or she is a fan of Cee Lo Green or the Dead Kennedys?
The two companies didn’t offer many details, only saying that users will be able to see Twitter messages on the homescreens of selected Android-based smartphones sometime next year. The collaboration will initially cover Germany, the Netherlands, Romania, Greece and Croatia, the operator said in a statement.
For Twitter the partnership is about increasing its user base, while Deutsche Telekom wants to add value to its devices and remain relevant as subscribers choose to communicate using means other than text messages and phone calls, according to Paolo Pescatore, director at market research company CCS Insight.
As of mid-November there were 230 million Twitter users globally, and 76 percent accessed the service on a mobile device, according to Twitter.
Twitter isn’t the first social networking vendor to work directly with operators and handset makers. Facebook has been the most aggressive, but has struggled to make an impact with smartphones featuring physical Facebook buttons; the most prominent phone integration with Facebook, the HTC First, was not a success.
Pescatore doubts that Twitter will succeed where Facebook struggled. Most users will likely just continue to use existing apps, he said.
Last month, Twitter updated its mobile apps for both Android and Apple’s iOS devices to give users better search tools.
The company also expanded options for marketers, allowing them to choose what smartphone models and OS versions they want to target with advertising.
Deutsche Telekom didn’t comment on plans for working with Twitter on operating systems other than Android.
Lenovo, widely known as a PC company, started selling bare-bones servers in 2008. The company established its Enterprise Product Group a year ago and now wants to build server, software, networking, storage and software portfolios through acquisitions and partnerships, said Roy Guillen, vice president and general of the Enterprise Product Group at Lenovo.
“If you look at the way our PC business grew, we were not shy of making acquisitions. We added companies that brought scale, they bought presence, they brought intellectual property,” Guillen said. “We’ve been looking at the same thing in enterprise and we’ll continue to do so.”
Lenovo acquired IBM’s PC division in 2005 and earlier this year rumors surfaced that the Chinese company was negotiating to acquire IBM’s x86 server operations. Guillen declined to comment on whether negotiations took place.
Lenovo is the world’s top PC vendor, but is not yet a significant player in the server market. According to Gartner, Lenovo was the world’s ninth largest server vendor during the third quarter this year, shipping 57,929 units, growing from 55,467 units in last year’s third quarter. By comparison, the world’s top server vendor, Hewlett-Packard, shipped 669,103 units.
“Most of [Lenovo's] server business does come from China, but they did show some decent growth this quarter, albeit from smaller bases, in Canada, Eastern Europe and the U.S. That helped their overall numbers,” said Jeffrey Hewitt, research vice president at Gartner.
Lenovo’s enterprise products today include single- and two-socket tower and rack servers. The company plans to introduce new two-way servers early next year, and offers a four-socket server in China that it could bring to the U.S. market.
“We’re going to have a really big improvement by the Grantley timeframe,” Guillen said, referring to the next-generation of Intel’s server processors based on Haswell microarchitecture. Those servers will come out in the third quarter of next year.
Lenovo’s enterprise strategy is predicated on the flexibility of server offerings and the company wants to offer a shopping list where customers can check mark what they need, Guillen said. That’s a different server strategy from top server makers IBM, HP and Dell, which are focusing on converged offerings that package servers, software, networking and storage.
The phablet cannibalization trend is so significant that IDC lowered its long-term tablet forecast. The research firm slightly lowered its previous 2013 forecast from 227.4 million tablet shipments worldwide to 221.3 million.
IDC lowered its 2017 tablet forecast even further, pegging shipments at 386.3 million, down from the previous 407 million units.
In some markets, especially the Asia Pacific region, consumers have already decided to buy a large smartphone rather than a small tablet, IDC analysts said. Tablet purchases in South Korea have declined while larger smartphone purchases have increased. IDC researchers there are forecasting that 2013 tablet shipments will drop below 2012′s figures.
“Korea is a unique case, but it could very well be the precursor to that happening in more countries and regions,” said Tom Mainelli, an IDC analyst.
“People in some countries have limited money to spend, so they tend to go for a large phone because they can call and browse on it and read email, as opposed to getting a small phone and a tablet,” added IDC analyst Jitesh Ubrani. The phablet becomes the “jack of all trades.”
The cannibalization of tablets is less of a concern in the U.S. and Canada where expendable income is more available. In North America, analysts are more worried about market saturation, with tablets bought up in huge numbers going back to 2010. The market is set to turn from high growth to “mostly a replacement market,” Mainelli said.
IDC also found that tablets in emerging countries aren’t as popular as phablets because there is less Wi-Fi at home and less traditional home PC usage. “We think many of those cheap whitebox tablets being used in emerging markets are essentially replacing DVD players, with the content side-loaded onto them from various sources,” Mainelli said. “Also, larger smartphones took off there first.”
In addition to large smartphones’ cutting into tablet sales, Mainelli said IDC believes that wearable devices and other new computing categories will temper tablet growth in coming years. He didn’t estimate by how much, however.
As large phone use rises, Mainelli said it’s possible that the tablet market will shift back to larger tablets in a reversal of the recent trend toward sub-8-in. tablets. “I tend to think that is what will happen in the U.S.,” he said. One example is the new iPad Air, with a 9.7-in. display.
IDC predicts about 220 million tablets with screens that are under 8 inches will ship globally in 2017, with another 145 million tablets shipping that are between 8 inches and 11 inches, and about 20 million with screen sizes of more than 11 inches.
Analyst firm Canalys said in November that phablets larger than 5 inches accounted for 22% of all smartphones shipped in the third quarter.
The phablets, made mainly by Samsung and running the Android operating system, include the 6.3-in. Galaxy Mega and the 5.7-in Galaxy Note 3. Apple’s new iPhone 4S and 4C are still 4-in. devices, but the company launched a smaller tablet, the iPad mini, with a 7.9-in. screen in November 2012.
Canalys recently predicted that tablet shipments will reach 285 million units in 2014, about 15 million higher than IDC’s forecast for 2014 of 270.5 million.
Also in 2014, Canalys said tablets will almost outship all PCs combined, a category including desktops and laptops.
The dismal numbers will not be welcomed at Microsoft, which sells the bulk of its Windows licenses to computer makers as they assemble new PCs.
According to IDC’s revised estimate, 2013 PC shipments will total 314 million, a 10.1% decline from last year’s 349 million.
The new forecast was the third reduction in 2013 expectations by IDC, which started the year thinking that the decline would be just 1.3%. With each revision, the research firm’s projections became gloomier, first in May when it predicted a 7.8% contraction, then again in August when its analysts said the decline would intensify to 9.7%.
If IDC’s latest prognostication is accurate, Asian factories will ship about the same number of PCs to distributors, retailers or OEMs as they did in 2009, two years before ”peak PC,” when PC shipments reached nearly 364 million before starting a 24-month-and-counting slump.
The downturn will continue through 2014, IDC maintained Monday, when PC shipments will fall another 3.8% to around 302 million — like the 10.1% drop this year, a larger decline than the August estimate — before recovering ever so slightly over the next several years. But for the foreseeable future — at least through 2017 — shipments will hover just north of 300 million, or about the number delivered in 2008.
“Beyond 2017, at this time we don’t have reason to think the market would take off in double-digit year-over-year growth,” said Jay Chou, one of the IDC analysts who works on the PC tracking team, in an email reply to questions.
The last time PC shipments climbed by double digits was in 2010, when year-over-year growth was a robust 13.7%.
Other than computer component suppliers and PC makers, Microsoft will be the company hit the hardest: Sales of its Windows operating system are almost entirely reliant on new PC sales. Last quarter, for example, Microsoft said that OEM-based Windows revenue declined 7% overall, nearly the same as the drop in PC shipments for the quarter measured by IDC.
Spotify has responded to criticism of the royalty amounts it pays to music artists.
Music industry figures including Radiohead lead singer Thom Yorke have long called for fellow artists to boycott the Swedish music streaming service, which Yorke described as “the last desperate fart of a dying corpse”.
In launching the new Spotify For Artists website, Spotify has been proud to boast that it has paid out more than $1bn, over half of which it has paid in the past year. However, digging deeper the truth emerges that this equates to between $0.006 and $0.008 per play.
That’s fine if you’re Lady Gaga or Beyonce, but for musicians at the grassroots level this represents a massive hole in their finances. Or to put it in perspective, it would require a five piece band to be played 5,477 times just to be able to buy themselves a round of drinks. For a new, untested and undiscovered artist, that simply isn’t enough to get by.
A play on Great Britain’s BBC alternative radio station 6 Music nets an artist approximately five cents. Not a king’s ransom, but a huge amount compared to Spotify’s rates. In contrast, Bandcamp, the service designed to allow artists to self release their music, lets artists set their own prices for music, or even leaves it up to consumers to pay what they believe the work is worth.
This is the way that the internet is supposed to empower artists. The internet has made it possible for anyone to be a star, or at least make a living from their music, if they are good enough.
But accepting the payment of these tiny amounts of money is actually far worse for the industry than so-called ‘piracy’, because copyright infringement will always be considered wrong, while streaming for fractions of pennies normalises the practice of underpaying for creative talent and creates the kinds of gatekeepers that have made the giant music industry companies such a cartel. A cartel that is starting to implode.
The program, dubbed “Student Advantage,” was unveiled in mid-October, when Microsoft promised that it would debut Dec. 1.
Educational institutions, whether K-12 school districts or those in higher education, that license Office Professional Plus 2013 or Office 365 ProPlus — the former is traditionally-licensed software while the latter is a subscription — can now also hand Office 365 ProPlus subscriptions to students, free of charge.
Schools and universities must have licensed Office for staff and faculty institution-wide, according to Microsoft, to be eligible for the student give-away. When students graduate, their Office 365 subscription expires.
Office 365 ProPlus includes rights to download and install copies of the newest Office desktop applications on up to five Windows PCs or Macs owned by the student, as well as rights to run the iPhone or Android editions of Office Mobile.
Students, faculty and staff at universities that do not equip employees with Office can instead pay a flat $80 for a four-year subscription to Office 365 University. That subscription program allows Office 2013 to be installed on up to two PCs or Macs, and Office Mobile on as many as two mobile devices.
Companies from Panasonic Corp to Toshiba Corp are pulling engineers and money away from their TV operations and into developing ‘smart appliances’ after losing out in the living room to cheaper Asian rivals.
A fridge that texts pictures to show what’s for dinner, a voice-controlled washing machine -appliances like these are being designed to talk to each other via the cloud to cut energy bills.
For now, they’re expensive, deterring buyers: a Japan-only Toshiba smart fridge with camera runs to about $2,800 versus less than $800 for a basic model. Yet as more products come on the market and competition cuts prices, global smart appliance sales will rocket to $35 billion by 2020 from just over $600 million last year, according to technology intelligence firm Pike Research.
As the industry prepares to descend on Las Vegas next month for CES, the world’s biggest tech trade fair, that’s mouth-watering for all electronics makers. But none more than Japan’s.
They’ve been squeezed into billions of dollars of losses in recent years, caught between high manufacturing costs, aggressive competition from the likes of Samsung Electronics Co and the strong yen, making exports of consumer staples like TVs more expensive.
To prosper in the new niche, Japanese companies must not only convince consumers to shell out for a whole new set of appliances, which need to be all from the same brand to guarantee compatibility. Further down the line, they’ll also have to hold their own against the same cheaper Asian rivals that stole their thunder in leisure electronics.
“Everyone says having the same brand of goods would be more energy-efficient, but in the end it comes down to the price and function of each product,” said Satomi Wakamatsu, a 41-year old housewife from Hiroshima. She owns a Hitachi Ltd fridge and washing machine, and an air conditioner made by Daikin Industries Ltd.
Wakamatsu considered buying smart appliances. But she balked when she added up the cost of all-new appliances, in addition to the home energy management system (HEMS) needed to connect them to each other to monitor and cut energy usage – a further $2,000-$3,000.
Sales of Japanese companies’ HEMS were helped over the last year by hefty government subsidies designed to stimulate energy efficiency – but they ended in October. Panasonic sold 20,000 HEMS units between April and September, double its full-year target, but said it’s unsure if that pace can be sustained without the subsidy.
Toshiba, meanwhile, wants 20 percent of its appliance sales to be from ‘smart’ goods by the end of fiscal 2014.
The tablets run Android 4.2, code-named Jellybean, and are listed at the company’stablet page. The list includes the $199.99 Slate 7 Extreme with a 7-inch screen, the $329.99 Slate 8 Pro with an 8-inch screen, and the $299.99 Slate 10 HD with a 10.1-inch screen.
The Slate 8 Pro offers 11.5 hours of battery and has the hardware to provide 4K video and gaming. The tablet has a quad-core Nvidia Tegra 4 processor, which has a graphics processor capable of handling 4K video. The screen can display images at a 1600 x 1200 pixel resolution. An HDMI port allows the tablet to be connected to TVs for 4K video. Other features include an 8-megapixel rear camera, a 720p front camera, 16GB of internal storage and a 1GB of RAM.
The Slate 10 HD offers 10 hours of battery and is meant for Web surfing and basic multimedia use. The screen displays images at a resolution of 1280 x 800 pixels. It has a dual-core Marvell PXA986 ARM-based chip, 16GB of storage, a high-definition front camera and a five-megapixel back camera. Other specifications include 1GB of DRAM and a micro-SD slot.
The Slate 7 Extreme is listed at the site, but is out of stock. The tablet offers 10.5 hours of battery life, and as the product name suggests, it is meant for entertainment and high-definition video. It has a Tegra 4 chip, making it capable of processing 4K video. Other features include a 1280 x 800-pixel screen, 16GB of storage, an HDMI slot, a five-megapixel rear camera and 0.3-megapixel front camera.
The entry-level $149.99 Slate 7 Plus tablet, which is an upgrade from an earlier Slate 7 that was discontinued earlier this year, is also available. The Slate 7 Plus has 8GB of storage and an older Nvidia Tegra 3 processor. Other features include a 5-megapixel rear camera and a 0.3-megapixel front camera. The tablet offers six to seven hours of battery life.
All of the tablets have Wi-Fi and micro SD slots.
A Harvard scientist has come up with a way to 3D print rechargeable batteries. Jennifer Lewis has created some new inks and create special nozzles and extruders for 3D printing batteries and other simple electronic components.
These functional inks contain nanoparticles of different compounds such as lithium for batteries and silver for wires. They get printed at room temperature as a liquid, but become a solid after printing. It also means that electronics and batteries can be manufactured together and in configurations that have not been possible before.
Lewis printed a battery that is just 1mm square with an accuracy of 100nm and the reliability of a commercial battery. Functional inks, nozzles and extruders was first introduced back in June and is still at the early stages. However, Lewis has reached a point now where patents exist covering how they function, and the tech is starting to be licensed.
She wants to get them into the hands of manufacturers, but also doesn’t see a reason why a 3D printer couldn’t be offered for home users.
Terms of the deal, which was announced Monday, were not disclosed. SkyPhrase’s team has joined Yahoo’s Labs business unit in New York City, a Yahoo spokeswoman said.
Yahoo Labs is a science and research division of Yahoo focused on next-generation products and services. The division is active in a number of areas — human computer interaction, mobile and personalization are just a few — and it’s unclear into which areas specifically SkyPhrase’s technology might be integrated.
What’s clear is that Yahoo wants to make its services smarter at understanding natural language. By joining Yahoo Labs, both companies can “continue to work on our shared vision of making computers deeply understand people’s natural language and intentions,” SkyPhrase said in its announcement of the acquisition. SkyPhrase could not be immediately reached to comment further.
A cached version of the startup’s website offers a clue: sports. In addition to Web analytics, SkyPhrase’s business at one point included technology for National Football League statistics. The technology could be integrated into Yahoo’s Sports services, which include stats, real-time scores and breaking news, and also Yahoo’s Fantasy sports apps.
There are some obvious areas of Yahoo’s Fantasy sports apps that could benefit from SkyPhrase’s technology. The company’s Fantasy Sports Football app, for instance, lets users pick players, chat with others and check message boards. Providing a suite of mobile products focused on personal experiences is a stated goal for Yahoo, so it would make sense for the company to try to improve its services there.
Natural language processing is also a hot area of search critical to the success of Yahoo’s biggest competitors like Facebook and Google. Facebook is working on its own natural language search engine with Graph Search, which was announced earlier this year. And Google is constantly working to improve its search algorithms to better understand more complex queries. Its latest search ranking system, “Hummingbird,” was designed for precisely that.
Apple confirmed the acquisition but would not say why it purchased the company, which specializes in analyzing Twitter data and providing insights into current sentiment on a variety of topics.
The Wall Street Journal, which reported the news earlier, cited people familiar with the deal as saying Apple forked over more than $200 million.
“Apple buys smaller technology companies from time to time, and we generally do not discuss our purpose or plans,” spokeswoman Kristin Huguet said.
Topsy did not respond to requests for comment.
The iPad and iPhone maker often does what it calls “bolt-on” acquisitions, small deals to acquire technology that then gets integrated into existing or future products.
Apple’s main effort in social media has revolved around Ping, a music-centered social sharing network that was at one point integrated into its iTunes app. The service, which lets users post music tracks they liked to a newsfeed, didn’t catch on and was shut down.
But the California gadget maker has been increasingly making it easier for people to share photos, videos and news through its devices and directly to social networks such as Facebook and Twitter.
It also operates iTunes Radio, an online streaming music service that competes with Pandora and could benefit from Topsy’s data on consumer sentiment.
Supercomputer-based visualization and simulation tools could allow a company to create, test and prototype products in virtual environments. Couple this virtualization capability with a 3-D printer, and a company would revolutionize its manufacturing.
But licensing fees for the software needed to simulate wind tunnels, ovens, welds and other processes are expensive, and the tools require large multicore systems and skilled engineers to use them.
One possible solution: taking an HPC process and converting it into an app.
This is how it might work: A manufacturer designing a part to reduce drag on an 18-wheel truck could upload a CAD file, plug in some parameters, hit start and let it use 128 cores of the Ohio Supercomputer Center’s (OSC) 8,500 core system. The cost would likely be anywhere from $200 to $500 for a 6,000 CPU hour run, or about 48 hours, to simulate the process and package the results up in a report.
Testing that 18-wheeler in a physical wind tunnel could cost as much $100,000.
Alan Chalker, the director of the OSC’s AweSim program, uses that example to explain what his organization is trying to do. The new group has some $6.5 million from government and private groups, including consumer products giant Procter & Gamble, to find ways to bring HPC to manufacturers via an app store.
The app store is slated to open at the end of the first quarter of next year, with one app and several tools that have been ported for the Web. The plan is to eventually spin-off AweSim into a private firm, and populate the app store with thousands of apps.
Tom Lange, director of modeling and simulation in P&G’s corporate R&D group, said he hopes that AweSim’s tools will be used for the company’s supply chain.
The software industry model is based on selling licenses, which for an HPC application can cost $50,000 a year, said Lange. That price is well out of the reach of small manufacturers interested in fixing just one problem. “What they really want is an app,” he said.
Lange said P&G has worked with supply chain partners on HPC issues, but it can be difficult because of the complexities of the relationship.
“The small supplier doesn’t want to be beholden to P&G,” said Lange. “They have an independent business and they want to be independent and they should be.”
That’s one of the reasons he likes AweSim.
AweSim will use some open source HPC tools in its apps, and are also working on agreements with major HPC software vendors to make parts of their tools available through an app.
Chalker said software vendors are interested in working with AweSim because it’s a way to get to a market that’s inaccessible today. The vendors could get some licensing fees for an app and a potential customer for larger, more expensive apps in the future.
AweSim is an outgrowth of the Blue Collar Computing initiative that started at OSC in the mid-2000s with goals similar to AweSim’s. But that program required that users purchase a lot of costly consulting work. The app store’s approach is to minimize cost, and the need for consulting help, as much as possible.
Chalker has a half dozen apps already built, including one used in the truck example. The OSC is building a software development kit to make it possible for others to build them as well. One goal is to eventually enable other supercomputing centers to provide compute capacity for the apps.
AweSim will charge users a fixed rate for CPUs, covering just the costs, and will provide consulting expertise where it is needed. Consulting fees may raise the bill for users, but Chalker said it usually wouldn’t be more than a few thousand dollars, a lot less than hiring a full-time computer scientist.
The AweSim team expects that many app users, a mechanical engineer for instance, will know enough to work with an app without the help of a computational fluid dynamics expert.
Lange says that manufacturers understand that producing domestically rather than overseas requires making products better, being innovative and not wasting resources. “You have to be committed to innovate what you make, and you have to commit to innovating how you make it,” said Lange, who sees HPC as a path to get there.
The agency in charge of the problem plagued HealthCare.gov website said it is changing providers of Web hosting services, the latest change for the website at the heart of President Barack Obama’s health care reforms.
The Centers for Medicare and Medicaid Services (CMS) said it is replacing data center services from Verizon Communications Inc’s Terremark subsidiary, with services fromHewlett-Packard Co.
Terremark’s data center experienced issues in late October that caused outages across the system, prompting embattled Health and Human Services Secretary Kathleen Sebelius to phone Verizon’s chief executive to discuss the problems.
Obama and Sebelius had promised the website would make it easy to shop for health insurance required under the 2010 Affordable Care Act, commonly known as Obamacare.
Instead, slow response times, error messages and outages like the ones seen at Terremark’s data center meant few Americans have been able to enroll so far.
The disaster has fueled Republican criticism of the law, and alarmed Democrats who supported it. The administration has had to scramble to make fixes in the hopes enough Americans sign up by deadlines in December and March.
Both Verizon and HP declined comment on the contract change, as did the White House, which referred questions about the contract to CMS.
CMS said its contract with Terremark had been set to end in March 2014. Last summer, several months before the botched October 1 launch of HealthCare.gov, the agency issued a “task order” asking for bids. HP was awarded that contract, a CMS spokesman said in a statement.
The contract change was first reported by the Wall Street Journal.
Now, CMS needs to transition its data center to HP at a time when it is just beginning to dig out from a mountain of problems with the website, which is designed to let consumers shop for health insurance required under Obama’s signature health care law.
The complexity of the switch between data center providers could be an additional challenge for the project. A CMS spokesman did not respond to questions about whether the transition would affect the website.
The Obama administration has said it plans to have the website working smoothly for most users by this weekend.
Part of that upgrade involves doubling capacity so the website can handle 50,000 users at once.
A source close to the project, who spoke on condition of anonymity, said there are some concerns about the website’s ability to handle so many users because of problems with switches and servers maintained by Terremark.
“CMS has begun the necessary activities to transition the data center over to HP. We are working to ensure a smooth transition between the two contractors,” the CMS spokesman said in a statement.
Verizon has received $55.4 million for its work on the healthcare marketplaces since its contract started in 2011, according to federal contracting records.