Will it be Clovertown or Barcelona? Intel or Advanced Micro Devices? Which will ultimately rule and which will rue the battleground that is the global server CPU market?
Compelling questions indeed: ones that invariably elicit an incalculable changing of opinions on a quarterly basis. But it would appear quarters — as in quarterly earnings reports — have seemingly taken a back seat at Intel and AMD in favor of the never-ending pursuit of technological advancement.
So said Rob Enderle, principal analyst for The Enderle Group in San Jose, Calif. Likewise, the two giant chipmakers are neglecting their respective channel partners and customers of late, he said.
Enderle said he found it of great interest that both vendors are paying more attention on “kicking each other’s butts and on the future” than on the reseller channel living in the here and now.
“They are forgetting resellers live in the present and need to sell existing products,” he said. “Neither company’s revenue and profit are where they should be and I think that deserves more focus than it appears to be getting.”
Both vendors’ recent announcements focused on future customers.
AMD said its Barcelona chipset, the company’s first quad-core Opteron processor, would become available later this year. Intel’s Clovertown quad-core Xeon chips are already on the market but Intel said it would issue a refresh by way of two new Clovertown chips in the coming months.
Enderle agreed Intel and AMD each have strong performance-oriented arguments but he said the industry is seeing a slow down in IT spending. This might suggest both sides are spending too much time pounding on each other and not enough time building up customer value and demand.
“This could be problematic for both companies if it isn’t corrected,” he added. “The new technologies will provide an opportunity to position new hardware and the ongoing consolidation opportunity and both provide power savings benefits that could play very well in a world increasingly concerned about global warming.
“The market seems to be buying on value though, rather than pure performance, and here both vendors will have competitive products.”
Enderle noted power conservation appears to be becoming more important than pure performance and he said this is one of the new big battlefields.
“It is becoming clear that we may not be comparing Intel and AMD apples to apples on power consumption. AMD has merged more into their processor and it consumes more power as a result and we don’t count the same part for Intel (Northbridge),” he said. “I’m really starting to think we should just be measuring power at a system level since that is what really counts anyway and let the server, workstation, and PC vendor optimize for that, otherwise we won’t hit the optimum power savings we are striving for and vendors will avoid advancements that would get us there.”
Warren Shiau, associate partner, lead analyst, IT research for The Strategic Counsel, said everyone has been anticipating the Barcelona versus Core 2 showdown, and he said it’s more than just a quad-core fight. It’s a fight over dual core, quad-core, desktop, servers, everything.
While AMD’s Barcelona is a “native” quad-core it would have dual core variants. Intel uses two dual core die to get quad-core.
“I don’t think anyone doubts there will be major performance improvements for Barcelona versus pre-Barcelona K8 (Barcelona is a big architectural update to the AMD K8 architecture),” he said. “Whether or not AMD will gain a significant performance advantage versus Intel is up for debate until people get product, but the consensus now is that at minimum, AMD will again be fully competitive performance-wise.”
If native quad-core works better than two dual-core quad-core chips in the real world (it is definitely purer in a technical sense though only real world performance matters), the anticipation is that AMD will indeed get a performance advantage, Shiau added.
The big issue is timing and availability, he reasoned.
Intel has already put Core 2 based quad-core on the market, and Barcelona isn’t expected to arrive until the middle of the year at best. Also, much uncertainty persists regarding what quantities AMD will be able to ship Barcelona in, Shiau said, as the 65nm manufacturing process is new for AMD and the company might have some issues ramping-up production in a cost-effective manner.
Two big things make the outcome even more difficult to predict: The Intel two dual core quad-core approach is easier and more cost-effective to manufacture, so AMD is going to have to get a significant performance advantage to make up for higher production cost.
And Intel is scheduled to get its Core 2 architectural update — Penryn (rumored to be a major update) — out the door in 2008 and Penryn is said to be built on a 45nm process.
“If takes Intel until late 2008 to ramp-up volume on Penryn and AMD is moving out Barcelona in volume by late 2007, that’s a one year window for AMD to put everything its got into being competitive with Penryn,” Shiau added. “AMD is a great engineering company too and Barcelona is going to be good, but we’re seeing what an Intel that’s totally focused on engineering and maximizing its production efficiency can do to AMD, and it’s scary.”