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IBM used to make all of it's money from Mainframes, but then over the years commodity computers have gotten good enough to replace mainframes in most businesses

IBM used to make all of it's money from Mainframes, but then over the years commodity computers have gotten good enough to replace mainframes in most businesses. There are still some customers who need them, but the lion's share of the market is now dominated by commodity x86 servers. Now x86 is in the process of being disrupted. Look at ARM for example. Currently, most ARM chipsets are focused on mobile applications where low power is necessary. They are not powerful enough to compete with x86 on the server (yes I know there are ARM server parts, but it's still early days), but soon they will be for most customers. And at that point, the power/cost advantage will cause customers to switch over. This is already happening in laptops, with both Apple and Microsoft moving to ARM for their desktop OS. So I think it makes a lot of sense for Intel to try and address this concern, and competing with ARM/MIPS head on for the IoT market is one way to do this. IMO the mistake Intel made is trying to take their x86 process, which has a value chain designed to serve high margin server markets, and shoehorn it into the IoT market which is dominated by low margin, ultra cheap parts (think ESP8266). Take a look at this book for more info: https://en.wikipedia.org/wiki/The_Innovator%27s_Dilemma https://en.wikipedia.org/wiki/The_Innovator%27s_Dilemma

cushychicken 9y ago
> ...most ARM chipsets are focused on mobile applications where low power is necessary. They are not powerful enough to compete with x86 on the server... but soon they will be for most customers... I think it makes a lot of sense for Intel to try and address this concern, and competing with ARM/MIPS head on for the IoT market is one way to do this. I agree with most of your reasoning - it's the strategic choice to go after the embedded market that I think was unwise. The makerspace move was Intel trying to compete in a whole different sector than their core competency (embedded devices vs server chips). A more sensible strategic move, in my opinion, would have been trying to optimize the power consumption of their previous generation server grade chips. That allows them to sell through their existing channels (which they're very good at), but segment based on those customers that care about power consumption. It's all of the advantages of ARM, but eliminates a lot of risk to the customer by being x86, and legacy compatible. Plus, it gives the sales guys the option to say "Well, if you don't care about power, and do want maximum performance, we can always discuss our cutting edge line of server cores..."
- thesandlord 9y ago
  > it's the strategic choice to go after the embedded market that I think was unwise I think the way they entered the market was unwise, not the decision itself. For example, Intel could have created an independent org within itself that could use Intel's resources but wasn't tied to legacy processes.

cushychicken 9y ago

> ...most ARM chipsets are focused on mobile applications where low power is necessary. They are not powerful enough to compete with x86 on the server... but soon they will be for most customers... I think it makes a lot of sense for Intel to try and address this concern, and competing with ARM/MIPS head on for the IoT market is one way to do this. I agree with most of your reasoning - it's the strategic choice to go after the embedded market that I think was unwise. The makerspace move was Intel trying to compete in a whole different sector than their core competency (embedded devices vs server chips). A more sensible strategic move, in my opinion, would have been trying to optimize the power consumption of their previous generation server grade chips. That allows them to sell through their existing channels (which they're very good at), but segment based on those customers that care about power consumption. It's all of the advantages of ARM, but eliminates a lot of risk to the customer by being x86, and legacy compatible. Plus, it gives the sales guys the option to say "Well, if you don't care about power, and do want maximum performance, we can always discuss our cutting edge line of server cores..."

thesandlord 9y ago
> it's the strategic choice to go after the embedded market that I think was unwise I think the way they entered the market was unwise, not the decision itself. For example, Intel could have created an independent org within itself that could use Intel's resources but wasn't tied to legacy processes.