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With the concentration of server buying by AWS I am surprised Intel believes it can get away with this. AWS has the expertise and the incentive to push for supp

With the concentration of server buying by AWS I am surprised Intel believes it can get away with this. AWS has the expertise and the incentive to push for supporting a competitor that offers a superior value.

stu2010 9y ago
I'd bet that the cloud-scale customers like AWS negotiate pricing that has very little to do with the published list price of these CPUs.
- colechristensen 9y ago
  More than that, Intel builds custom chips to AWS specs.
  - klodolph 9y ago
    Kind of. From what I understand, any customer large enough can get small features added, and they just get turned off for the other customers.
    - gsnedders 9y ago
      Depends on the feature, as far as I can tell. Intel has been known to do entirely custom chips, if the price is right (and realistically, you need lots of volume to be able to justify the setup cost of it).
      - temac 9y ago
        If we are talking about modern processors, I doubt they are going to do custom masks.
      - klodolph 9y ago
        There's no way the price is right for custom Skylake Xeons, especially considering how easy it is to disable features on chips after you make them.
- ethbro 9y ago
  And I think this is possibly one reason for the pricing. When a >50% (guessing, any better numbers?) of new chip sales volume comes from a few hyperscale buyers with individually negotiated contracts, you're far more flexible with what you do for the remainder. Heck, Intel might even not really have the production volume on all SKUs to sell to non-hyperscale! And if that's true, then why would they do anything other than milk the few customers it deigns to sell to?
  - tachyonbeam 9y ago
    That could be one reason why it's priced so high: because they wouldn't be able to make enough to meet demand otherwise. They can price it extremely high to keep demand under control, and negotiate special pricing with a few selected customers that they really care about pleasing.
- late2part 9y ago
  What % of Intel's sales by volume do you think goes to AWS, GCP, Azure?
dx034 9y ago
While AWS is one of the largest buyers, I doubt that they have a significant share of Intel's profits. There are probably a handful of companies buying (nearly) as much and sales will be dominated by small datacentres and enterprise customers. A lot of Xeons don't end up in servers but in workstation computers.
- dhd415 9y ago
  From the reports I've seen, the big vendors (HP, Dell, Lenovo, etc.) ship about 3x more servers than workstations. And that probably understates the degree to which Xeons end up in servers rather than workstations since HP, Dell, and Lenovo account for a significant percentage of the workstation market whereas there are a lot more vendors and custom-built hardware in the server/datacenter markets.
fragmede 9y ago
Given AwS's leadership in being the world's datacenter, they must purchase enough Intel CPUs to have some say, so I'm surprised we haven't seen Amazon offer of CPUs clocked at 10 GHz. Home users don't have liquid nitrogen piped into their homes or even really the expertise for hot vs. code aisles, but AWS is building their own datacenters, at which point they could pipe liquid nitrogen in if they chose to. At the scale and concentration to AWS is building at, I certainly hope it leads to faster computers, if not bigger AWS bills. The way I recall, AWS had to be embarrassed into offering GPU instances rather than taking the lead in, so maybe there's a competitor out there building for speed.
- solotronics 9y ago
  Check out Softlayer / Bluemix we have customizable bare metal offerings.
calimac 9y ago
And that if case and point of the problem we face with the sheer size of AWS.

stu2010 9y ago

I'd bet that the cloud-scale customers like AWS negotiate pricing that has very little to do with the published list price of these CPUs.

colechristensen 9y ago
More than that, Intel builds custom chips to AWS specs.
- klodolph 9y ago
  Kind of. From what I understand, any customer large enough can get small features added, and they just get turned off for the other customers.
  - gsnedders 9y ago
    Depends on the feature, as far as I can tell. Intel has been known to do entirely custom chips, if the price is right (and realistically, you need lots of volume to be able to justify the setup cost of it).
    - temac 9y ago
      If we are talking about modern processors, I doubt they are going to do custom masks.
    - klodolph 9y ago
      There's no way the price is right for custom Skylake Xeons, especially considering how easy it is to disable features on chips after you make them.
ethbro 9y ago
And I think this is possibly one reason for the pricing. When a >50% (guessing, any better numbers?) of new chip sales volume comes from a few hyperscale buyers with individually negotiated contracts, you're far more flexible with what you do for the remainder. Heck, Intel might even not really have the production volume on all SKUs to sell to non-hyperscale! And if that's true, then why would they do anything other than milk the few customers it deigns to sell to?
- tachyonbeam 9y ago
  That could be one reason why it's priced so high: because they wouldn't be able to make enough to meet demand otherwise. They can price it extremely high to keep demand under control, and negotiate special pricing with a few selected customers that they really care about pleasing.
late2part 9y ago
What % of Intel's sales by volume do you think goes to AWS, GCP, Azure?

dx034 9y ago

While AWS is one of the largest buyers, I doubt that they have a significant share of Intel's profits. There are probably a handful of companies buying (nearly) as much and sales will be dominated by small datacentres and enterprise customers. A lot of Xeons don't end up in servers but in workstation computers.

dhd415 9y ago
From the reports I've seen, the big vendors (HP, Dell, Lenovo, etc.) ship about 3x more servers than workstations. And that probably understates the degree to which Xeons end up in servers rather than workstations since HP, Dell, and Lenovo account for a significant percentage of the workstation market whereas there are a lot more vendors and custom-built hardware in the server/datacenter markets.

fragmede 9y ago

Given AwS's leadership in being the world's datacenter, they must purchase enough Intel CPUs to have some say, so I'm surprised we haven't seen Amazon offer of CPUs clocked at 10 GHz. Home users don't have liquid nitrogen piped into their homes or even really the expertise for hot vs. code aisles, but AWS is building their own datacenters, at which point they could pipe liquid nitrogen in if they chose to. At the scale and concentration to AWS is building at, I certainly hope it leads to faster computers, if not bigger AWS bills. The way I recall, AWS had to be embarrassed into offering GPU instances rather than taking the lead in, so maybe there's a competitor out there building for speed.

solotronics 9y ago
Check out Softlayer / Bluemix we have customizable bare metal offerings.

calimac 9y ago

And that if case and point of the problem we face with the sheer size of AWS.