Competition is healthy and it appears that ARM and AMD are not deterred by the thousand-pound gorilla in the server room, namely, Intel. Sure, this is not late-breaking news, we have been hearing for a while that AMD has been developing its own server strategy and roadmap, as AMD announced in June of this year.
Moving into the server room
This week IHS released a report forecasting that the initial market share expectation for these upcoming releases are likely "reach more than 5 percent penetration of the total server space by 2017, up from virtually zero last year. The growing share of ARM servers is in line with continued bright prospects for the overall server market, forecast to reach 13.1 million units by 2017." That's a very healthy start as a late(r) entry into the market. However, with the expected market expansion for data centers and server needs due to increases in cloud computing and big data sets by more enterprises, the market is still ripe for strategic entries.
According to IHS:
Within this active market, ARM server shipments are expected to enjoy their first big year in 2014, IHS predicts. Demand for low-power-consumption processors, along with the maturation of the server ecosystem, will help boost the penetration of ARM chips in the server industry, traditionally the stronghold of ARM archrival Intel.
Intel has long been the only force in servers, with chips and software developed with partners specifically made to support Intel’s x86 server architecture. Over the years Intel has also launched a variety of aggressive server initiatives to maintain its dominance while hoping at the same time to prevent ARM from making any sort of entry into the market.
So, given the long-standing rivalry, there have been a series of ever-vigilant, counter-strategies that have helped Intel to remain the dominant force by far. There is, however, an important change taking hold of the supply chain which has numerous effects, one of which is the opening that ARM and AMD are seizing. There is a shift in processor architectures that is in direct relationship with the shift in device dominance, Bring Your Own Device (BYOD) trends, and increased demand for truly attaining ubiquitous computing.
In response to these market shifts, as well as their own roadmaps, ARM's move to 64-bit architectures is a significant event. As iSuppli notes, "will expose it to a broader base of microprocessor vendors and server original equipment manufacturers (OEM)." As the AMD roadmap release explained, "In 2014, AMD will set the bar in power-efficient server compute with the industry's premier ARM server CPU."
"Our strategy is to differentiate ourselves by using our unique IP to build server processors that are particularly well matched to a target workload and thereby drive down the total cost of owning servers. This strategy unfolds across both the enterprise and data centers and includes leveraging our graphics processing capabilities and embracing both x86 and ARM instruction sets," said Andrew Feldman, general manager of the Server Business Unit, AMD. "AMD led the world in the transition to multicore processors and 64-bit computing, and we intend to do it again with our next-generation AMD Opteron families."
The fact that a real position in the once Intel-only server chip market is forecasted for ARM by leading industry analysts such as IHS is a significant event. Understanding how this single data point fits into a larger semiconductor and electronics industry supply chain shift is the focus of one of the recent articles in Smith's MarketWatch Quarterly, just released to subscribers (free) and available to the public by the end of the month.