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Intel Corporation Message Board

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  • alexander.dumbass alexander.dumbass Dec 8, 2012 12:00 AM Flag

    INTC will rule the cloud

    OpenStack is a project started by Rackspace and they shipped their first release in Oct 2012. The Platinium and Gold (Intel) members do most of the heavy lifting. I don't recognize any ARM representation in the group although there must be someone. All the work was done in Python with Linux defining the API. Getting OpenStack to run on some ARM CPU that runs Linux (Android) should be pretty easy.

    OpenStack is not "ARM compliant". OpenStack conforms to the OpenStack specification. OpenStack will run on an ARM chip if the that ARM chip and its version of OS provide the proper OpenStack API support.

    If the purchasing manager decides that the ARM based server offers the best solution to his problem, he will buy it. If the approving manager decides that there is a better solution, he will buy it.

    He will decide based on performance, power consumption, cost, how it will fit into his existing equipment and future plans.

    Will the ARM server be faster? No. It might be for FP workloads but nothing in the OpenStack.
    Will the ARM server be lower power? No. Intel power optimization, advanced process and code restructuring will easily match any ARM vendor offering.
    Will the ARM server be cheaper? No. Intel cost per transistor will make it easy to set their price right on top of ARM vendor products.

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    • "Will the ARM server be cheaper? No. Intel cost per transistor will make it easy to set their price right on top of ARM vendor products."

      Intel currently charges way beyond cost per transistor for its server chips in the presence of little competition from AMD. With ARM based solutions entering the fray, since the ARM licensee is not developing the core IP and only the peripheral IP, their costs are much lower than Intel's which has to amortize its entire R&D costs through its sales. This means the ARM licensees can operate at a much lower ASP than Intel which will drive down Intel ASP. This is the threat to Intel. They may not lose business but they will have to reduce their ASPs not to lose it because there will be a cheaper viable alternative than what they're current charging for their solution. So they may rule the cloud but the cloud will come down to Earth.

      • 3 Replies to khitchdee
      • "Intel currently charges way beyond cost per transistor for its server chips in the presence of little competition from AMD."

        I agree but you should not confuse value pricing with cost plus pricing. Intel will not like it but they will not hesitate to cost plus price.

        The cost of the ARM IP, licensee development and foundry wafer charges for these chips will be higher than Intel's costs. You may think differently but we will just have to disagree. Intel will put 2x the transistors on their 14nm wafer than any process that will be used by any ARM microserver chip.

        Your key point is that ARM licensee products will pressure Intel ASP. True but Intel will have no problem competitively pricing products.

        The key word that you use is "viable". We will have to wait until there is a product and it can be measured.

      • yeh temporarily Intel may have some pressure so think what ARM will have: HELL.

        Them at some point ARM will be the next AMD. ouch.

        Sentiment: Strong Buy

      • "Intel currently charges way beyond cost per transistor for its server chips in the presence of little competition from AMD. "

        I agree with you. Today, Intel prefers "value prices" rather than "cost plus prices".

        "With ARM based solutions entering the fray, since the ARM licensee is not developing the core IP and only the peripheral IP, their costs are much lower than Intel's which has to amortize its entire R&D costs through its sales. "

        This is where I disagree with your analysis. ARM licensees do not develop the core IP but they pay licenses and royalty fees for each part. They also have to negotiate wafer starts from foundries. The cost of that ARM + licensee + foundary food chain is higher than the cost (not price) that Intel charges. Does Intel charge a higher ASP today? Yes. Does that mean that Intel will NOT set "cost plus" price some products? Intel will "cost plus" price products in the future as they have in the past.

        "This is the threat to Intel. They may not lose business but they will have to reduce their ASPs not to lose it because there will be a cheaper viable alternative than what they're current charging for their solution. So they may rule the cloud but the cloud will come down to Earth."

        This is the key part of your argument. Intel ASP "will go lower" because of some ARM product offering. That might be true but Intel will have NO problems in being more than competitive. Intel cost per transistor is lower and it will always be lower than any ARM product chain.

        The key word you used is "viable". We will know how viable these ARM parts are when one is produced and its operation can be measured.

 
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