By: Richard Cownie (tich.delete@this.pobox.com), January 29, 2013 7:19 am
Room: Moderated Discussions
bakaneko (nyan.delete@this.hyan.wan) on January 29, 2013 6:49 am wrote:
> Selling server chips with extremely low margins
> sounds dangerous. Qualcomm needs to be able to
> survive bad times. And the more Qualcomm nibbles
> at Intels high-margin business (which also
> exist to protect itself in exactly these bad
> times), the higher they have to aim for higher
> margins as they take over Intel's risks. (Which
> loopsided means that Intel would die faster,
> because they have to sell for higher prices.)
>
> Qualcomm may very well want you to sell servers
> at lower margins, but in the end they have to do
> the same as Intel.
Let's do a global replace:
"Selling server chips with extremely low margins
sounds dangerous. [Intel] needs to be able to survive bad times.
And the more [Intel] nibbles at DEC/HP/Sun/IBM's high-margin
business (which also exists to protect itself in exactly these
bad times), the higher they have to aim for higher margins as they
take over DEC/HP/Sun/IBM's risks"
That argument didn't work in 1995-2005. It won't work now.
Intel was able to sell server chips relatively cheap because
they had massive desktop/laptop volume and could exploit the
associated massive investment in R&D and manufacturing to
attack the small, but lucrative, server cpu business.
What's happening now is that the desktop/laptop business is
not looking so great. The biggest volumes are in cellphones
and tablets, and those high volumes are driving huge investments
in both (ARM) core design, and manufacturing. And those people
are itching to get some higher-margin business - and server
cpu's look like a tempting target.
> Which brings the question really down to questions
> besides money. Why go with Qualcomm? What is so
> much better?
I expect ARM-based servers will be attractive first for those
wanting maximum throughput-per-rack and maximum throughput-per-watt.
Datacenter space is expensive; power is expensive; cooling is expensive.
The people who know how to pack a quad-core SoC into a cellphone
have expertise very relevant to the problem of packing lots of cores
into a rack, and being able to run it cheaply.
Of course Intel is grappling with the same problem - I just don't
know if they'll be willing and able to mix it up with lean and hungry
competitors who've been living and breathing throughput-per-watt
for 20+ years.
> Selling server chips with extremely low margins
> sounds dangerous. Qualcomm needs to be able to
> survive bad times. And the more Qualcomm nibbles
> at Intels high-margin business (which also
> exist to protect itself in exactly these bad
> times), the higher they have to aim for higher
> margins as they take over Intel's risks. (Which
> loopsided means that Intel would die faster,
> because they have to sell for higher prices.)
>
> Qualcomm may very well want you to sell servers
> at lower margins, but in the end they have to do
> the same as Intel.
Let's do a global replace:
"Selling server chips with extremely low margins
sounds dangerous. [Intel] needs to be able to survive bad times.
And the more [Intel] nibbles at DEC/HP/Sun/IBM's high-margin
business (which also exists to protect itself in exactly these
bad times), the higher they have to aim for higher margins as they
take over DEC/HP/Sun/IBM's risks"
That argument didn't work in 1995-2005. It won't work now.
Intel was able to sell server chips relatively cheap because
they had massive desktop/laptop volume and could exploit the
associated massive investment in R&D and manufacturing to
attack the small, but lucrative, server cpu business.
What's happening now is that the desktop/laptop business is
not looking so great. The biggest volumes are in cellphones
and tablets, and those high volumes are driving huge investments
in both (ARM) core design, and manufacturing. And those people
are itching to get some higher-margin business - and server
cpu's look like a tempting target.
> Which brings the question really down to questions
> besides money. Why go with Qualcomm? What is so
> much better?
I expect ARM-based servers will be attractive first for those
wanting maximum throughput-per-rack and maximum throughput-per-watt.
Datacenter space is expensive; power is expensive; cooling is expensive.
The people who know how to pack a quad-core SoC into a cellphone
have expertise very relevant to the problem of packing lots of cores
into a rack, and being able to run it cheaply.
Of course Intel is grappling with the same problem - I just don't
know if they'll be willing and able to mix it up with lean and hungry
competitors who've been living and breathing throughput-per-watt
for 20+ years.
