Intel CEO Bracing For EPYC Impact, Aims to Keep AMD Under 20% of Server Market Share

[csbin]

https://www.tomshardware.com/news/intel-ceo-amd-server-market,37273.html

Shah relates that Krzanich "was very matter-of-fact in saying that Intel would lose server share to AMD in the second half of the year,” which is not news, but he thought it significant that "Mr. Krzanich did not draw a firm line in the sand as it relates to AMD’s potential gains in servers; he only indicated that it was Intel’s job to not let AMD capture 15-20% market share." (emphasis added).

 

[StinkyPinky]

Proves what we all knew. That Intel has nothing on the horizons to compete with higher core Epyc's

 

[maddie]

A line to remember.

"Intel's DCG (Data Center Group) contributed 46% of Intel's revenue in Q1"

20 % market share loss AND lower prices on 46% of your present revenue. Also the 20% loss is what Intel is hoping to achieve. A sort of best case scenario.

A world of pain is coming.

 

[slashy16]

Unfortunately, I don't think Intel will have much of a problem. I have been waiting for EYPC and now that it's finally available at Dell and has been fully tested and certified with vMware\VSAN I am not allowed to buy it. I am a Senior Systems Engineer and I have been told by management that we will not be buying AMD under any circumstance. I have friends around the city in similar roles and their management says the same. The real benefit of EPYC isn't the cores but, the PCIE lanes. It would allow us to physically shrink our infrastructure and save a lot of money by dumping dual socket systems we are forced to buy because of the PCIE lane cap in Intel systems.
We not only would save on physical space requirement but, on licensing too. I'm not sure what the issue is, I know we had opterons back in the day and they were fine, I guess it comes down to companies worried about support\compatibility and whether they can count on AMD to sell EPYC well into the future.

The market share will come down to pricing and from what I have seen so far, with the Dell R740/DELL R7425, Intel will discount their Xeons below EPYC. The servers I configured 16 core xeons to 16 core epyc ended up being the same price after all the discounts from Dell(intel).

 

[StinkyPinky]

Unfortunately, I don't think Intel will have much of a problem. I have been waiting for EYPC and now that it's finally available at Dell and has been fully tested and certified with vMware\VSAN I am not allowed to buy it. I am a Senior Systems Engineer and I have been told by management that we will not be buying AMD under any circumstance. I have friends around the city in similar roles and their management says the same. The real benefit of EPYC isn't the cores but, the PCIE lanes. It would allow us to physically shrink our infrastructure and save a lot of money by dumping dual socket systems we are forced to buy because of the PCIE lane cap in Intel systems.
We not only would save on physical space requirement but, on licensing too. I'm not sure what the issue is, I know we had opterons back in the day and they were fine, I guess it comes down to companies worried about support\compatibility and whether they can count on AMD to sell EPYC well into the future.

The market share will come down to pricing and from what I have seen so far, with the Dell R740/DELL R7425, Intel will discount their Xeons below EPYC. The servers I configured 16 core xeons to 16 core epyc ended up being the same price after all the discounts from Dell(intel).

Has your Senior Management being invited to any Intel all expenses paid "conferences" in recent months.......

 

[bbhaag]

We'll see. I've heard these claims before and they never come to fruition. While I think AMD does have a solid chip with solid performance, gaining a foothold into the coveted server market is very difficult. Just ask ARM or AMD for that matter. AMD has been trying for close to 3 decades with limited success.

 

[maddie]

Laughing here.

I hope everyone realizes, that its Intel's CEO making "these claims", not AMD. In any case, margins have peaked.

 

[itsmydamnation]

We'll see. I've heard these claims before and they never come to fruition. While I think AMD does have a solid chip with solid performance, gaining a foothold into the coveted server market is very difficult. Just ask ARM or AMD for that matter. AMD has been trying for close to 3 decades with limited success.

what are you talking about, it doesn't have any basis in reality......

Their first, not even real attempt was in 2001 with athlon MP (17 years ago) , With the first real attempt in 2003 (15 years ago). from 2003 until 2012 AMD had success in the server market ( 2010 Nehalem with QPI saw the start of the main decline). For along time AMD's market limiter was there ability to manufacture. Now Zepplin is comparable to intel in terms of performance but AMD's design decisions weren't about building something on a mature 14nm process, they will really show on the much more expensive to develop for , much lower yielding 7nm processes.

Now how about 2019 for you......

Intel with 28 core 14nm CPU's
Intel with same IPC
AMD will be on 7nm with increased clock at same core or more cores at same power
AMD with either 48 or 64 core (48 was original rumors, CPC later said 64) per processor
AMD will have an increase in IPC
AMD will have ~800mm sq of 7nm per socket of silicon to offer during 7nm infancy thax to the multi die strategy
AMD is shifting products back to TSMC, so AMD will have more 7nm capacity for CPU SOC then they do now for 14nm

Want to revisit @ EOFY 19?

 

[beginner99]

Has your Senior Management being invited to any Intel all expenses paid "conferences" in recent months.......

Don't attribute to malice what can be explained by stupidity or so the saying goes.

I'm by no way defending intel but offering my thought about typical management peoples technical knowledge and intelligence.

 

[Shmee]

I know at work that we have built at least a few custom Epyc servers for clients. Seems to a be a promising product line.

 

[Tuna-Fish]

Isn't 20% of server market share like more revenue than AMD currently has? And if AMD captures even 5% of the server market profit, that's vastly more than they currently have?

If Intel thinks 20% is reasonably achievable, maybe the AMD stock price is justified after all.

 

[ksec]

Unfortunately, I don't think Intel will have much of a problem. I have been waiting for EYPC and now that it's finally available at Dell and has been fully tested and certified with vMware\VSAN I am not allowed to buy it. I am a Senior Systems Engineer and I have been told by management that we will not be buying AMD under any circumstance. I have friends around the city in similar roles and their management says the same. The real benefit of EPYC isn't the cores but, the PCIE lanes. It would allow us to physically shrink our infrastructure and save a lot of money by dumping dual socket systems we are forced to buy because of the PCIE lane cap in Intel systems.
We not only would save on physical space requirement but, on licensing too. I'm not sure what the issue is, I know we had opterons back in the day and they were fine, I guess it comes down to companies worried about support\compatibility and whether they can count on AMD to sell EPYC well into the future.

The market share will come down to pricing and from what I have seen so far, with the Dell R740/DELL R7425, Intel will discount their Xeons below EPYC. The servers I configured 16 core xeons to 16 core epyc ended up being the same price after all the discounts from Dell(intel).

1. Management don't like to buy first gen product, especially from a new vendor or company. We are all lazy, and you will have to prove that you offer something more then saving money, because sometimes money is well worth spending if it is hassle free.

2. The lower level people will have to work their way to top level management to convince them. Show them what is possible and cost benefits. AMD will also need to work a lot harder to convince them, along with lots more testing and QA

3. I think Intel were more worrying about the loss of big Cloud vendor market share anyway. That is Azure, Google, AWS, Apple along with Aliyun and Tencent Cloud. Along with a handful of other companies may be together have 70%+ of all Server Market shares. They will likely use AMD to pitch against Intel in price negotiation. The statement is basically saying, we will lower price, but you cant purchase more then 15% of your CPU from AMD.

4. Once AMD made their CPU into these cloud vendor and the likes of IBM, they will change their mind. Along with Zen 2, better and faster Memory controller, possibly PCI-E 4.0 offer more value for money.

5, I am much more worried about GF / AMD ability to produce enough chips to sell them in the market. GF surely don't have 10% of Server Market share capacity for AMD unless they stop producing for consumer market and GPU.

 

[moinmoin]

To think that Krzanich is more than likely low-balling AMD's number in Intel's interest this is a surprisingly frank estimate.

It also shows AMD is right to push for using both GloFo and TSMC at once on 7nm.

 

[IEC]

Judging from how many rackmount systems are OOS/backordered at the usual places many orgs buy from, there is already demand for Epyc.

In addition to the Dell offerings people have previously mentioned, you have the HP Proliant DL385, the new Cisco UCS C4200, and even cloud providers like Tencent getting into the game by offering Epyc instances.

A year ago AMD had effectively 0 market share. Even with a competitive product, datacenter types tend to be pretty conservative so you're just now starting to see early adopters and people who needed to upgrade anyways testing the waters. Should AMD deliver as expected with 7nm + more cores in 2019, I expect a serious ramp up in adoption.

 

[AtenRa]

Isn't 20% of server market share like more revenue than AMD currently has? And if AMD captures even 5% of the server market profit, that's vastly more than they currently have?

If Intel thinks 20% is reasonably achievable, maybe the AMD stock price is justified after all.

Well, Intel's Data Center annual Revenue is around 20B USD. So 20% will be about 4B USD in revenue which is lower than current AMDs annual revenue. But adding 4B of revenue will immediately almost double AMDs annual revenue and more than triple current annual profits due to very high margins.

 

[rbk123]

To think that Krzanich is more than likely low-balling AMD's number in Intel's interest this is a surprisingly frank estimate.

It also shows AMD is right to push for using both GloFo and TSMC at once on 7nm.

Could be the opposite - he's setting expectations to be bad, so that when they come in with the actual numbers and they can beat them and report positively.

For Dell and others not switching - never underestimate "selling at the top". That always wins out vs. better product, etc... However a good company should be split between 2 vendors so they can play them off each other for the best pricing.

 

[Ajay]

Even with a competitive product, datacenter types tend to be pretty conservative so you're just now starting to see early adopters and people who needed to upgrade anyways testing the waters.

Very conservative! Remember the old saying, no one gets fired for going with IBM; well, Intel has replaced IBM. Cloud computing is the best opening for AMD, based on the number of core available on a dual socket system, imho. Enterprise will likely lag behind in adoption rates. It’s going to be a tough slog for AMD, but I have hope for their success.

 

[moinmoin]

Could be the opposite - he's setting expectations to be bad, so that when they come in with the actual numbers and they can beat them and report positively.

True, but would you offer a range like the given 15-20% in that case? "The competition got 14%! We fully managed to limit them like we said we'd do!" or "The competition got 17%, we managed to limit them within the range we said we'd do!" Honestly to me the messaging seems more like a lose-lose to Intel all things considered. Completely aside the fact that server market share is not what Intel should and would be worried about, margin is.

 

[rbk123]

True, but would you offer a range like the given 15-20% in that case? "The competition got 14%! We fully managed to limit them like we said we'd do!" or "The competition got 17%, we managed to limit them within the range we said we'd do!" Honestly to me the messaging seems more like a lose-lose to Intel all things considered. Completely aside the fact that server market share is not what Intel should and would be worried about, margin is.

You could be right. I have no clue what his real strategy in saying that is; too many possibilities.

 

[EXCellR8]

EPYC aren't susceptible to Spectre/Meltdown either...

 

[IEC]

Very conservative! Remember the old saying, no one gets fired for going with IBM; well, Intel has replaced IBM. Cloud computing is the best opening for AMD, based on the number of core available on a dual socket system, imho. Enterprise will likely lag behind in adoption rates. It’s going to be a tough slog for AMD, but I have hope for their success.

AMD's CPU marketing team is apparently aware of this, given their advertising at Cloudfest 2018 😉

 

[maddie]

AMD's CPU marketing team is apparently aware of this, given their advertising at Cloudfest 2018 😉

An amazing, "in your face" slogan. They should run a marketing campaign in magazines that CEO's and Chairmen would read. The economist, Forbes, etc. Let them start asking questions. Don't leave it solely to the CTO.

 

[formulav8]

too many possibilities.

Him even talking like that may mean they won't even try the illegal route like they did in the Opteron/Athlon 64/X2 era.

Won't be near as easy as it used to be to do the stuff they did before. Especially like what Mr. Anand was told from motherboard makers.

I guess we'll see.

 

[ksec]

An amazing, "in your face" slogan. They should run a marketing campaign in magazines that CEO's and Chairmen would read. The economist, Forbes, etc. Let them start asking questions. Don't leave it solely to the CTO.

That is one way AMD should surely be doing by now.

To think that Krzanich is more than likely low-balling AMD's number in Intel's interest this is a surprisingly frank estimate.

It also shows AMD is right to push for using both GloFo and TSMC at once on 7nm.

I don't think it is low balling at all. And since Intel knew of their customer's demand and plan they could have guess how many of their business went to AMD. And since most 2018's CPU contract were signed in 2017 or earlier, it is highly likely AMD isn't gaining as much as they should in the Server market. My guess is that it is still lower than 10% by this year end. Not to mention I doubt GF has enough capacity to deal with 20% Server Market anyway.

But for AMD, the real deal is Zen 2 + 7nm. I hope they have enough capacity planned for it.

 

[moinmoin]

I don't think it is low balling at all. And since Intel knew of their customer's demand and plan they could have guess how many of their business went to AMD. And since most 2018's CPU contract were signed in 2017 or earlier, it is highly likely AMD isn't gaining as much as they should in the Server market. My guess is that it is still lower than 10% by this year end. Not to mention I doubt GF has enough capacity to deal with 20% Server Market anyway.

But for AMD, the real deal is Zen 2 + 7nm. I hope they have enough capacity planned for it.

Wouldn't business for H2 2018 include contracts for 2019 (thus potentially include Zen 2/Epyc 2) then? Everybody already knew/expected that AMD will have a slow ramp up in everything OEM/ODM, especially in the server market.