By Charles King, Pund-IT, Inc. July 5, 2017
Silicon Valley loves anything new. That’s clear in everything from the tech industry’s vigorous drum-beating over barely emerging trends and products to its enthusiastic promotion of often vaporous start-ups. Enough of these succeed, going from virtual rags to unimaginable riches, that the value of this culture is self-assured, at least for VCs and other interested cheerleaders riding the gravy train.
However, more than a few people confuse the Valley’s Horatio Alger tales with the parable of David and Goliath. That is, that still-emerging trends and/or feisty little guys can and do take on muscular opponents and, despite the odds, score regular, remarkable wins.
How true is this? Despite the self-serving headlines, not as much as you might think, and with results that often conveniently forget or ignore original assumptions.
Case in point: When Linux began accelerating commercially in the late 1990s, many supporters believed the fledgling OS had what it took to replace pervasive Windows PC solutions. That ignored the fact that Microsoft held a massively dominant leadership position in PCs and generated billions in annual revenues and profits.
You know the rest of the story. Rather than disturbing, let alone displacing Windows, Linux instead significantly disrupted data center markets and established scale-up server operating environments. Two decades later, Microsoft Windows still owns 90%+ of the PC market while Linux’s share, at best, is in low single digits.
Similar examples are easy to cite, from over three decades of failed predictions about the IBM mainframe‘s demise to Cisco falling victim to various upstart networking players and technologies.
If you sense a repetitious point here, don’t be surprised. Either established IT vendors are harder to kill than many assume or they are better at adapting to changing circumstances than many believe. Both of those are at least partly correct, but they’re good to keep in mind when considering recent press stories about serious troubles for Intel.
Qualcomm and Snapdragon and ARM, oh my…
What troubles? First, the late-May announcement by Qualcomm that ASUS, HP and Lenovo would ship Windows 10 PCs using the company’s ARM-based Snapdragon 835 processors later this year. Second was Advanced Micro Devices (AMD) revived focus on the data center market via its new EPYC microprocessors.
The former case isn’t the first time that ARM and Microsoft have played house. In his 2011 CES keynote, then-CEO Steve Ballmer announced that the company would support ARM-based silicon and products with a new version of its pervasive PC OS: Windows RT. After some initial cheerleading and a handful of products (including Microsoft’s original Surface tablet), customers and Microsoft OEMs walked away and Windows RT was retired in 2015.
A number of issues contributed to RT’s demise, but probably the biggest problem was its inability to support existing Windows-based applications. That was no surprise since software has to be substantially rewritten to support new silicon. But it poked a hole in the enthusiasm for RT which suffered deflation from ticked-off end users who thought they’d been misled to OEMs irked by Microsoft’s efforts to compete against them with the Surface.
In Qualcomm’s case, the company says it will use software emulation to avoid compatibility issues, an approach that should (in theory) enable OEM partners to deliver solutions that allow customers to successfully run their Windows 10 applications.
AMD’s EPYC data center push
How about AMD? On June 20th, the company introduced EPYC, its new solution for data center workloads and applications. Based on the same Zen architecture as its newest Ryzen PC processors, EPYC chips include four silicon dies which support up to eight cores, each of which can run one or two hardware threads. Each EPYC package can support up to 2TB of DDR4 RAM over eight channels, and has 128 PCIe lanes.
AMD is pitching EPYC as an alternative for applications where one- and two-socket Intel Xeon currently reigns supreme, particularly cloud computing. In fact, the company’s launch included assists from two formidable cloud service providers (CSPs) – Microsoft Azure and Baidu – as well as server OEM/ODM players, including Asus, Dell, HPE, Gigabyte, Inventec, Lenovo, Sugon, Supermicro, Tyan and Wistron.
This obviously isn’t AMD’s first data center rodeo. In 2003, the company launched its Opteron processors to compete against Intel Xeon. AMD garnered significant interest by being first to market with 64-bit compatible x86 server silicon, a space Intel resolutely reserved for its Itanium solutions. That and other popular Opteron features resulted in quick uptake among data center customers, eventually allowing AMD to capture around 25 percent of the server market by 2006.
But significant problems, including poor quality control, faltering sales and leadership squabbles caused AMD’s progress to suffer and also gave Intel the time it needed to spin-up its own efforts. That came first with porting 64-bit extensions to its Xeon line, then pushing ahead with its robust, power-efficient Core architecture. Over time, AMD’s server market share dwindled to under 2 percent.
So how troublesome are these two initiatives to Intel and what can the company do to counter them?
In the first case, shortly after the Qualcomm announcement Intel’s EVP and general counsel Steven Rodgers, and Richard Uhlig, an Intel Fellow and director of Systems and Software Research at Intel Research, posted a blog on the company’s investments in and advancements of its x86 ISA, detailing how the company protects its intellectual property rights against infringement, including third party processors and emulation technologies.
That reportedly sparked a Qualcomm spokesperson to say the company found the blog “very interesting,” but looks forward “to the launch of the always connected Windows 10 PCs powered by the Qualcomm Snapdragon … later this year.” That sort of bravado is unsurprising, but should the company attempt to proceed without obtaining a license, it’s likely that Intel would ask a court to halt the sale of those products.
It also seems likely that such a request would prevail given Intel’s success a decade or so ago against Transmeta’s x86 emulation technologies. Whether a similar effort against Qualcomm would succeed as fully is hard to tell but it seems likely to delay or derail any launch of Snapdragon-based Windows 10 products in 2017. In a market as changeable as personal computing, a delay can be akin to a death sentence.
How about AMD EPYC? The company should be congratulated for creating an intriguing new solution with good commercial potential. In fact, AMD’s initial focus on CSPs is entirely sensible – that’s where immediate volume sales reside – as is the reciprocity the company is enjoying from Microsoft and Baidu.
But Intel is a far different company today than it was in 2003. Not only is it the driving force in server processors, but Intel also holds commanding leadership positions in silicon technologies for storage and networking. Add in its other data center innovations, like the recently introduced Optane memory and SSD storage solutions, Xeon Phi co-processors for supercomputing and HPC, and FPGA technologies (among many others) and Intel looks more formidable today than ever before.
It’s popular to say that the presence of smoke means the possibility of fire. But when Silicon Valley is involved in the tale, smoke can also simply mean the likelihood of pipedreams. Not to smite anyone’s David and Goliath expectations, but the roads ahead for both Qualcomm’s Windows 10 efforts and AMD EPYC look considerably less rosy than many believe.
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