5 ms·

Intel has been under intense pricing pressure as the server market has consolidated into a few large cloud providers. Some of the largest providers have used th

by slv77 10y ago

Intel has been under intense pricing pressure as the server market has consolidated into a few large cloud providers. Some of the largest providers have used their weight to really turn the screws on Intel. Providing exclusive access to top-end child has effectively turned Intel from being viewed as a commodity vendor to a partner. In the past some of these players have threatened to turn to ARM processors to extract more pricing concessions from Intel. It will be interesting to see if that was a bluff or if Intel's technology advantage does really give them a TCO advantage even with their margins factored in. It's also interesting that Google and Facebook are leaders in machine learning and I wonder if there isn't some additional collaboration in the works for custom silicon in the works. Google has their own custom silicon for machine learning and maybe could be encouraged to help Intel enter the market if they knew they would have exclusive access to the newest generation of chips. Given the market caps of Google, Facebook, Apple et-al it makes me wonder why nobody has bought out Intel.

hga 10y ago
Given the market caps of Google, Facebook, Apple et-al it makes me wonder why nobody has bought out Intel. They'd over time lose the ecosystem advantages that an independent Intel offers. They'd probably also lose a lot of money since an in-house Intel would become much less competitive. Apple also doesn't need or want what Intel has to offer (highest performance but very much not the lowest cost to manufacture chips), unless my impression of Mac vs. iOS systems sales is way off. It's hard to imagine Intel being in such dire straights they can let Google and Facebook blackmail them in such a market damaging way, although as noted by t0mas88 other big customers like AWS might be getting their own custom numbered parts. Or, who knows, might not need exactly these types of chips (I have no idea, not familiar with the market beyond what I buy, low/near lowest cost single chip Xeons for my personal workstation class computers). But pissing off everyone else who buys these class chips, unless contrary to the article they do have a capacity issue, seems breathtakingly unwise, an inflection point indeed.
kyrra 10y ago
Don't forget that Google is one of the founding members of openpower: https://www.google.com/amp/s/www.nextplatform.com/2016/04/06/inside-future-google-rackspace-power9-system/amp/?client=safari https://www.google.com/amp/s/www.nextplatform.com/2016/04/06... They are looking at power PC as an alternative to Xeon.
- stillworks 10y ago
  That may actually be a reason for preferential release to Google. In general, I think we are in interesting times. Still a guess but I think the crowd close to their forties (I'll be 40 in 4 years) will see a significant shift within a decade. My kids are an age where they don't really care what is in their game console, TV box or their parents' phones. I guess I (as a working adult) would really stop caring about what is powering the cloud as long as I keep getting access to the service level I (or my employer) is paying for. With Google trying non-Intel option, there may be a copy-cat effect for other cloud providers to do the same to remain competitive, possibly diminishing Intel's importance in the server market. And with "kids" mostly using non-Intel(or x86 in general) platforms (phones, TVs, snapchat-shades, phones etc) where Intel already has very little presence. Not trying to sound a doomsday prophecy for Intel but... times they are a changing ?
dom0 10y ago
2011-x chips contain custom and undisclosed additions for these biggest customers ("Big seven") already. These are in all 2011-x SKUs made from the same chip, but are said to be disabled through fusing, just like other feature fuses.
- deleted 10y ago
  [deleted]
- userbinator 10y ago
  I hope someone leaks more info about that, or reverse-engineers something, because I find the whole secretive attitude around processors and other hardware information incredibly offputting as it is; but it's not just Intel who are doing it. Maybe when used hardware with these customisations starts showing up on eBay or similar...
- nkurz 10y ago
  I hadn't heard this. What might these features might be? Do you have a link to more information?
fazzone 10y ago
I think that Google's TPUs (Tensor Processing Unit) use Altera FPGAs (speculation based on [1]). I'm sure there's some degree of collaboration if Google is filling cabinets with high-end FPGAs. [1] https://twitter.com/danluu/status/705802676945072129 https://twitter.com/danluu/status/705802676945072129
- hobo_mark 10y ago
  Uh? They prototyped on FPGA but what is currently deployed across their data centers is custom made ASIC silicon.
fh973 10y ago
Which credible threat is allowing Google et al to assert pricing pressure?
- detaro 10y ago
  Google is active with ARM and (Open)POWER. ARM remains a threat to the lower end, POWER challenges fat Xeons. Potentially AMD, depending on how their current development efforts are going. Buying Intel is easier, so Intel gets to guess how far they can go before one of their large customers decides that the risk of going with one of those alternatives is worth it (demonstrating to the world that Intel isn't the only viable option in the process, which might at the end be the bigger damage for Intel)
nkurz 10y ago
Given the market caps of Google, Facebook, Apple et-al it makes me wonder why nobody has bought out Intel. Or for 1/10 the cost, they could buy AMD. Not because their products are equivalent, but because any new owner of AMD also acquires a very special relationship Intel. Intel and AMD have cross-licensed a lot of IP, without which neither would be able to sell an x64 processor. And (as I understand it) if AMD changes ownership, their licensing deal with Intel is nullified and would need to be renegotiated: However, according to Drew Prairie, director of corporate communications at AMD, once ownership of either AMD or Intel changes, the whole agreement is terminated for both parties. As a result, after a transaction happens, the companies need to negotiate a new cross-licensing agreement. “Actually, the agreement is pretty clear – if there is a change of control for either company the agreement is terminated,” said Mr. Prairie. “That does not mean a new agreement could not be reached, but in a change of control the agreement is terminated.” http://www.kitguru.net/components/cpu/anton-shilov/amd-clarifies-cross-license-with-intel-change-of-control-terminates-agreement-for-both/ http://www.kitguru.net/components/cpu/anton-shilov/amd-clari.... The assumption is that obviously the deal would be renegotiated, since it would be "Mutually Assured Destruction" for both AMD and Intel if either side refused. But what if AMD is bought by a company with deep enough pockets to just absorb the loss? What if AMD was owned by someone who didn't actually need it, and could countenance the MAD? I'd think that such a company would have tremendous leverage against Intel in such a negotiation. If they demanded it, and were willing to "throw the steering wheel out of the window and play chicken"[1] (ie, structure the acquisition such that both Intel and AMD were prevented from selling x64 processors unless Intel agrees to their terms), exclusive early access (and whatever other special preference they want) would be easily negotiated. But if this were true, I'd have thought that someone would have already done it. If not Amazon/Google/Facebook (the three largest Internet companies), why not Tencent/Alibaba/Baidu (the next largest)[2]? All of them could easily afford it, and I'd think that all of them could get tremendous benefit from a sweetheart deal with Intel. What am I missing? [1] https://bpicampus.com/2011/02/28/evening-focus-applied-game-theory-part-1-the-washington-chicken-game/ https://bpicampus.com/2011/02/28/evening-focus-applied-game-... [2] https://en.wikipedia.org/wiki/List_of_largest_Internet_companies https://en.wikipedia.org/wiki/List_of_largest_Internet_compa...
- dastbe 10y ago
ianai 10y ago
I don't get the impression google nor facebook really want to be the sole CPU producer. Strategically, market regulators could site that as a reason to never again let google or facebook purchase another company. If you're google and facebook you highly value the ability to buy competitors out while they're small. That threat should also exist for Apple, theoretically. Of the three, I could imagine Apple having the business model closest to making a purchase/merger of/with Intel. But it sounds like there are both technological and business reasons for Apple not wanting to become that big.

by slv77 10y ago

hga 10y ago

Given the market caps of Google, Facebook, Apple et-al it makes me wonder why nobody has bought out Intel. They'd over time lose the ecosystem advantages that an independent Intel offers. They'd probably also lose a lot of money since an in-house Intel would become much less competitive. Apple also doesn't need or want what Intel has to offer (highest performance but very much not the lowest cost to manufacture chips), unless my impression of Mac vs. iOS systems sales is way off. It's hard to imagine Intel being in such dire straights they can let Google and Facebook blackmail them in such a market damaging way, although as noted by t0mas88 other big customers like AWS might be getting their own custom numbered parts. Or, who knows, might not need exactly these types of chips (I have no idea, not familiar with the market beyond what I buy, low/near lowest cost single chip Xeons for my personal workstation class computers). But pissing off everyone else who buys these class chips, unless contrary to the article they do have a capacity issue, seems breathtakingly unwise, an inflection point indeed.

kyrra 10y ago

Don't forget that Google is one of the founding members of openpower: https://www.google.com/amp/s/www.nextplatform.com/2016/04/06/inside-future-google-rackspace-power9-system/amp/?client=safari https://www.google.com/amp/s/www.nextplatform.com/2016/04/06... They are looking at power PC as an alternative to Xeon.

stillworks 10y ago
That may actually be a reason for preferential release to Google. In general, I think we are in interesting times. Still a guess but I think the crowd close to their forties (I'll be 40 in 4 years) will see a significant shift within a decade. My kids are an age where they don't really care what is in their game console, TV box or their parents' phones. I guess I (as a working adult) would really stop caring about what is powering the cloud as long as I keep getting access to the service level I (or my employer) is paying for. With Google trying non-Intel option, there may be a copy-cat effect for other cloud providers to do the same to remain competitive, possibly diminishing Intel's importance in the server market. And with "kids" mostly using non-Intel(or x86 in general) platforms (phones, TVs, snapchat-shades, phones etc) where Intel already has very little presence. Not trying to sound a doomsday prophecy for Intel but... times they are a changing ?

dom0 10y ago

2011-x chips contain custom and undisclosed additions for these biggest customers ("Big seven") already. These are in all 2011-x SKUs made from the same chip, but are said to be disabled through fusing, just like other feature fuses.

deleted 10y ago
[deleted]
userbinator 10y ago
I hope someone leaks more info about that, or reverse-engineers something, because I find the whole secretive attitude around processors and other hardware information incredibly offputting as it is; but it's not just Intel who are doing it. Maybe when used hardware with these customisations starts showing up on eBay or similar...
nkurz 10y ago
I hadn't heard this. What might these features might be? Do you have a link to more information?

fazzone 10y ago

I think that Google's TPUs (Tensor Processing Unit) use Altera FPGAs (speculation based on [1]). I'm sure there's some degree of collaboration if Google is filling cabinets with high-end FPGAs. [1] https://twitter.com/danluu/status/705802676945072129 https://twitter.com/danluu/status/705802676945072129

hobo_mark 10y ago
Uh? They prototyped on FPGA but what is currently deployed across their data centers is custom made ASIC silicon.

fh973 10y ago

Which credible threat is allowing Google et al to assert pricing pressure?

detaro 10y ago
Google is active with ARM and (Open)POWER. ARM remains a threat to the lower end, POWER challenges fat Xeons. Potentially AMD, depending on how their current development efforts are going. Buying Intel is easier, so Intel gets to guess how far they can go before one of their large customers decides that the risk of going with one of those alternatives is worth it (demonstrating to the world that Intel isn't the only viable option in the process, which might at the end be the bigger damage for Intel)

nkurz 10y ago

Given the market caps of Google, Facebook, Apple et-al it makes me wonder why nobody has bought out Intel. Or for 1/10 the cost, they could buy AMD. Not because their products are equivalent, but because any new owner of AMD also acquires a very special relationship Intel. Intel and AMD have cross-licensed a lot of IP, without which neither would be able to sell an x64 processor. And (as I understand it) if AMD changes ownership, their licensing deal with Intel is nullified and would need to be renegotiated: However, according to Drew Prairie, director of corporate communications at AMD, once ownership of either AMD or Intel changes, the whole agreement is terminated for both parties. As a result, after a transaction happens, the companies need to negotiate a new cross-licensing agreement. “Actually, the agreement is pretty clear – if there is a change of control for either company the agreement is terminated,” said Mr. Prairie. “That does not mean a new agreement could not be reached, but in a change of control the agreement is terminated.” http://www.kitguru.net/components/cpu/anton-shilov/amd-clarifies-cross-license-with-intel-change-of-control-terminates-agreement-for-both/ http://www.kitguru.net/components/cpu/anton-shilov/amd-clari.... The assumption is that obviously the deal would be renegotiated, since it would be "Mutually Assured Destruction" for both AMD and Intel if either side refused. But what if AMD is bought by a company with deep enough pockets to just absorb the loss? What if AMD was owned by someone who didn't actually need it, and could countenance the MAD? I'd think that such a company would have tremendous leverage against Intel in such a negotiation. If they demanded it, and were willing to "throw the steering wheel out of the window and play chicken"[1] (ie, structure the acquisition such that both Intel and AMD were prevented from selling x64 processors unless Intel agrees to their terms), exclusive early access (and whatever other special preference they want) would be easily negotiated. But if this were true, I'd have thought that someone would have already done it. If not Amazon/Google/Facebook (the three largest Internet companies), why not Tencent/Alibaba/Baidu (the next largest)[2]? All of them could easily afford it, and I'd think that all of them could get tremendous benefit from a sweetheart deal with Intel. What am I missing? [1] https://bpicampus.com/2011/02/28/evening-focus-applied-game-theory-part-1-the-washington-chicken-game/ https://bpicampus.com/2011/02/28/evening-focus-applied-game-... [2] https://en.wikipedia.org/wiki/List_of_largest_Internet_companies https://en.wikipedia.org/wiki/List_of_largest_Internet_compa...

dastbe 10y ago

ianai 10y ago

I don't get the impression google nor facebook really want to be the sole CPU producer. Strategically, market regulators could site that as a reason to never again let google or facebook purchase another company. If you're google and facebook you highly value the ability to buy competitors out while they're small. That threat should also exist for Apple, theoretically. Of the three, I could imagine Apple having the business model closest to making a purchase/merger of/with Intel. But it sounds like there are both technological and business reasons for Apple not wanting to become that big.