Advanced Micro Devices (AMD) has shaken up the server industry in the year since it introduced its 32-/64-bit Opteron chip, opening the world of 64-bit computing to business users looking for expanded performance, but with industry-standard pricing.
On Thursday, AMD will hostan event in New York celebrating the one-year anniversary of Opteron, which lets users run 32- and 64-bit applications on the same platform.
The chip has been widely embraced, and all major systems vendors - except Dell - have shipped products based on the processor, helping AMD's financial picture.
This week, the company reported first-quarter sales of $US1.2 billion, up 73 per cent compared with the same quarter last year.
Net income for the quarter was $US45 million, compared with a net loss of $US146 million last year.
By forging partnerships with HP, IBM and Sun, AMD has put pressure on Intel, which until now faced almost no competition in the high-volume, low-end of the server market, where it held about a 98 per cent share, according to analyst, IDC.
In February, Intel announced that it, too, would roll out 64-bit extension technology, called Intel Extended Memory 64 Technology (EM64T), for its x86 processors.
Intel said a dual-processor Xeon with EM64T technology, code-named Nocona, woulddebut in the next few months.
Intel's MP Xeon for multiprocessor servers would get the extension technology in 2005.
The AMD/Intel competition was going to make the technology race a lot more aggressive, as well as probably result in more competitive pricing for customers, a senior analyst with The Yankee Group, Jamie Gruener, said.. "But customers will really have to do their homework to determine which platform is best for the application they're trying to run," he said.
For AMD, the biggest challenge will be to continue enhancing Opteron for enterprise use, which means looking beyond processor speed improvements to designing chipsets that provide more reliability and management capabilities that corporate users demand.
It's this system-focused perspective that may give Intel the edge once Nocona-based systems start rolling out.
Dell, HP and IBM have said they will use Nocona.
"Intel has been focusing consistently not only on chip design, but also focusing on elements around the chip: the chipset, architecting the management better, system health," Gruener said. "They've done a lot of work to improve the server platform in the last couple of iterations of their chips. While AMD has done a good job of designing a really [high-performance] platform, there is a lot more that has to go into it."
Still, the systems vendors continue to roll out Opteron-based products.
HP is expected to soon announce shipment of the four-way, $8300, Opteron-based DL 585 it introduced in February.
The company is already shipping the two-processor Opteron-based DL 145.
HP also is expected to announce a new Linux-based cluster that uses DL 145 boxes.
Meanwhile, Sun is expected to announce a pre-tested hardware and software bundle for secure Web serving, which includes its Opteron-based v20z, Java Web Server and Solaris operating system.
Opteron and Intel's EM64T might end up slowing adoption of Intel's 64-bit Itanium, at least on the low end, analysts said.
While Opteron and EM64T are not positioned to compete against Itanium, which offers higher-end RISC-like performance, most analysts and industry observers agree that the swell of support around Opteron is what forced Intel to introduce EM64T.
"To a degree that there wasn't a real alternative, I believe Intel would have just continued to plug Itanium until Itanium won by default," an analyst at Illuminata, Gordon Haff, said.
"Certainly, there would have been other potential dark horses such as IBM Power. But Opteron lent a certain urgency to Intel to counter, lest they potentially lose a chunk of the market."
The market is clearly there. According to IDC, about 35,000 Opteron-based systems shipped in 2003 after AMD introduced the chip on April 22, compared with about 19,000 Itanium systems for Intel for all of 2003.
"I don't want to come off saying this is an Itanium killer, because I don't think it is," a research vice-president at Gartner, John Enck, said. "But certainly it creates barriers for Itanium to move into this high-volume market. ... Intel wanted to speed up the transition from Xeon to Itanium. By being forced into expanding the Xeon technology, that obviously has a slowing effect on Itanium adoption in the high-volume market."