Intel is Serving Major Xeon Discounts to Combat AMD EPYC

[Karnak]

From what we have been hearing from a number of customers, discounts are happening at quantity levels *well* below 1000 CPUs. Discounts or incentives are reaching well into the double-digit percentages. For some customers, if they are evaluating an AMD EPYC purchase versus a competitive Intel Xeon part, Intel is more or less matching the price.

This is not happening on frequency optimized SKUs as much since the licensing savings can be hundreds of thousands of dollars per machine. Intel knows that AMD EPYC is targeting this segment as heavily in this generation so the discounts are happening more often in the mainstream higher core count parts.

At VMworld this year, we heard this from a number of our readers and vendors at the show. The behavior shift has been dramatic in that it was a topic of a number of discussions.

https://www.servethehome.com/intel-is-serving-major-xeon-discounts-to-combat-amd-epyc/

Finally we can get Xeons cheaper. Thanks to AMD! Wonder what they'll do when 7nm Rome launches next year.

 

[DrMrLordX]

Namedropping EPYC in vendor meetings nets you a discount on Intel products? Hmm. I wonder what else is going on behind the scenes . . .

 

[Nothingness]

Intel have been doing that for years to kill RISC in the server market. Nothing new. But it's good to see that now AMD can be used to get lower prices from Intel.

 

[Abwx]

I wonder what else is going on behind the scenes . . .

An exemple :

https://translate.google.fr/translate?hl=fr&sl=de&tl=en&u=https://www.computerbase.de/2018-09/nur-intel-fuer-cpus-amd-ifa-2018-nullnummer/&sandbox=1

As if it was by chance...

But it's good to see that now AMD can be used to get lower prices from Intel.

And what will happen if ever Epyc doesnt sell well enough and that AMD would have to cancel this line..?

Buying those Xeons instead of Epyc is a sure way that OEMs will have to pay back thoses discounts as soon as AMD is in difficulty in the server space, there s no free lunch, moroever when talking of Intel..

 

[Abwx]

DP

 

[Nothingness]

And what will happen if ever Epyc doesnt sell well enough and that AMD would have to cancel this line..?

Buying those Xeons instead of Epyc is a sure way that OEMs will have to pay back thoses discounts as soon as AMD is in difficulty in the server space, there s no free lunch, moroever when talking of Intel..

That's a risk indeed. But you could also see things optimistically: AMD is good enough to present a danger (and Intel management publicly admitted it some weeks ago) that needs to be countered. And if AMD is that good then some will buy their server chips.

 

[R81Z3N1]

You also need to remember that Intel is 14++ limited, those Xeons that are on discount might not be available as soon as folks want.

You get a discount, and then a notice that you won't have product until x amount of time. It might make some business think twice about the discount, go AMD get product now and more cores, go Intel and get a discount and wait!

R81Z3N1

 

[Kenmitch]

Can't type what I really want to say here.

 

[Markfw]

Can't type what I really want to say here.

Go to off-topic, cussing is allowed there

 

[Asterox]

You also need to remember that Intel is 14++ limited, those Xeons that are on discount might not be available as soon as folks want.

You get a discount, and then a notice that you won't have product until x amount of time. It might make some business think twice about the discount, go AMD get product now and more cores, go Intel and get a discount and wait!

R81Z3N1

Well now that is some absurd problem, you get a discount price but Xeons are in the "jumping and high-speeding fog".

https://semiaccurate.com/2018/09/07/intel-cant-supply-14nm-xeons-hpe-directly-recommends-amd-epyc/

 

[DrMrLordX]

Intel have been doing that for years to kill RISC in the server market. Nothing new. But it's good to see that now AMD can be used to get lower prices from Intel.

Has Intel been doing this to kill ARM in the server market?

As if it was by chance...

Yes, it is all a coincidence. Nothing to see here! Move right along.

I will say this: at least when it comes to AMD's low-power/mobile APUs based on Raven Ridge, that there's still the problem of single-channel configurations and OEMs hoarding large supplies of dGPUs that may or may not make any sense in a system powered by Raven Ridge. But if that were the only problem, we would just be seeing mis-configured AMD setups again. I have not seen many design wins for Raven Ridge from major OEMs.

You also need to remember that Intel is 14++ limited, those Xeons that are on discount might not be available as soon as folks want.

You get a discount, and then a notice that you won't have product until x amount of time. It might make some business think twice about the discount, go AMD get product now and more cores, go Intel and get a discount and wait!

R81Z3N1

Well now that is some absurd problem, you get a discount price but Xeons are in the "jumping and high-speeding fog".

https://semiaccurate.com/2018/09/07/intel-cant-supply-14nm-xeons-hpe-directly-recommends-amd-epyc/

Okay, I'm going to play the dunce in this conversation: why is Intel having 14nm supply problems? Are they trying to serve too many markets? Is it due to binning being required to bring higher-and-higher performing SKUs to market on an older process? What's really going on here?

If Intel can't supply the dice needed to keep customers served, they're going to lose market share one way or another. All those bribes won't hold back the inevitable.

 

[gdansk]

Intel is wise to offer discounts, but I'm less impressed with the people taking them up on that offer. Every company should consider the long term consequences of being dependent on Intel.

 

[DrMrLordX]

Intel is wise to offer discounts, but I'm less impressed with the people taking them up on that offer. Every company should consider the long term consequences of being dependent on Intel.

I would be more impressed if Intel just cut prices for anyone to remain competitive. Backroom deals reek of anticompetitive behavior.

 

[jpiniero]

Okay, I'm going to play the dunce in this conversation: why is Intel having 14nm supply problems?

Virtually all of their products are on one node now, this is the first time in recent history this has been the case for Intel. Plus the die sizes of products are getting bigger; they sell quad cores when they used to sell duals for instance; Skylake Server is considerably bigger than Broadwell-EP..

 

[gdansk]

I would be more impressed if Intel just cut prices for anyone to remain competitive. Backroom deals reek of anticompetitive behavior.

I don't pay attention to prices of Xeon chips. But when's the last time Intel did an actual MSRP cut for Xeon chips? It seems like they launch new SKUs, potentially priced more appropriately, instead.

 

[maddie]

Has Intel been doing this to kill ARM in the server market?



Yes, it is all a coincidence. Nothing to see here! Move right along.

I will say this: at least when it comes to AMD's low-power/mobile APUs based on Raven Ridge, that there's still the problem of single-channel configurations and OEMs hoarding large supplies of dGPUs that may or may not make any sense in a system powered by Raven Ridge. But if that were the only problem, we would just be seeing mis-configured AMD setups again. I have not seen many design wins for Raven Ridge from major OEMs.





Okay, I'm going to play the dunce in this conversation: why is Intel having 14nm supply problems? Are they trying to serve too many markets? Is it due to binning being required to bring higher-and-higher performing SKUs to market on an older process? What's really going on here?

If Intel can't supply the dice needed to keep customers served, they're going to lose market share one way or another. All those bribes won't hold back the inevitable.

AFAIK, the 14nm >10nm transition was started and caused a few fabs to be in the process of being upgraded plus chipsets are starting to being fabbed on 14nm. Rumor (?) has it that Intel will be using TSMC for some product.

This 10nm fiasco is a lot more convoluted than just a lack of 10nm CPUs.

edit:
Also, the last 14nm process for Coffee Lake is rumored to be less dense than previous versions to sustain higher clocks. Result is less die/wafer. I suspect the latest 14nm process is even less dense for the i9 5GHz clocks.

 

[jpiniero]

I don't pay attention to prices of Xeon chips. But when's the last time Intel did an actual MSRP cut for Xeon chips? It seems like they launch new SKUs, potentially priced more appropriately, instead.

There really isn't a point to doing that since nobody pays MSRP. The 'backroom deals' is how Intel does business.

 

[Markfw]

I just hope AMD gets some decent market share, like they deserve. 30% would suit me fine, 40% better. But if Intel plays this game to trys and kill their sales, well, thats the last one I will every buy (half my 18 server farm at home is currently Intel)

 

[Abwx]

I will say this: at least when it comes to AMD's low-power/mobile APUs based on Raven Ridge, that there's still the problem of single-channel configurations and OEMs.

The only one with single channel is the Lenovo Ideapad 330, all the rest is dual channel...

https://geizhals.de/?cat=nb&xf=9690_Raven+Ridge

To get back OT no sure that Intel s quasi unlawfull behaviour wont backfire at some point, server CPUs discount here are not made at the OEM level but at the retail one, as if Bestbuy would make a discount paid by Intel on a laptop to a consumer that would want to buy a Raven Ridge equipped laptop..

 

[wahdangun]

TBH, the biggest market for this kind of cpu is cloud providers, and they already have major discount, and intel also sold it directly to them.

 

[Kenmitch]

Shoot yourself in the foot in the long run approach by Intel. In the long run AMD will win the game or at least make it a really close fight. As Intel devalues it's products to keep competitive AMD's value will either stay the same or increase. AMD is happy with their current margins and I'm sure would welcome a increase. Intel on the other hand will sooner or later feel the pain from it's self devaluation. AMD gets revenue or at least some satisfaction that they're hurting Intels bottom line.

Are there any $ for $ Intel vs AMD server reviews? I figured it was more about the performance of the server at the price point than the name laser etched on the cpu.

 

[Nothingness]

Has Intel been doing this to kill ARM in the server market?

ARM is almost non-existent at the moment and has other issues such as the switch from x86 to ARM which might frighten some companies so I'm not sure Intel has to offer anything here OTOH, as we all know, Intel heavily subsidized companies that took Intel chips for tablets.

I was thinking about the historical RISC players in the server market (MIPS, POWER, SPARC, etc.). But after all they might have collapsed just because they were too expansive and didn't (couldn't) properly react to Intel prices, even official prices.

 

[krumme]

Thats why serving a niche market or just a smaller segment is impossible. You are simply priced out. Legal or not. Its impossible to avoid. People is educated for many years and trained to use monopoly like behavior.

Thats why zen needs to be sold from laptops over desktop to servers. They cant just adress one market.

 

[thecoolnessrune]

TBH, the biggest market for this kind of cpu is cloud providers, and they already have major discount, and intel also sold it directly to them.

I don't think this necessarily plays out. Due to some technical difficulties, this generation of EYPC is having difficulties getting into the cloud space. It is still very much Intel there. Rome could be a very different story.

From my conversations at VMworld, this is more about the composed bundles vendors are selling. When customers are doing refreshes, they're not *just* buying a blade chassis, or a single server. They often have a cluster, or big application, and are buying servers and storage to fulfill that role. They're buying 16 nodes for HPE Composed Infrastructure (or Dell Composed Infrastructure). They're buying VxRail Hyperconverged racks.

For instance, it's no quiet secret that Cisco is eager to get more marketshare in the Hyperconverged space, and is aggressively discounting Hyperflex pods to the point where depending on the deal, they're pushing All-Flash for the price that you'd only get Hybrid from VMware vSAN or Nutanix.

Likewise AMD has been heavily pushing the 50% licensing savings angle on VMware and VDI infrastructure. Intel is not trying to counter the price of individual CPUs, but rather they're going "Ok, with your business discount, you'd be paying $10,000 more in vSphere licensing with our solution, what if we just absorb that cost."

I'm definitely not a fan of this, but it's a very common practice in the industry.

 

[darkswordsman17]

Personally if I'm a company I says "yeah your discount is nice, but uh, you should be shipping us a brand new non-compromised CPU for free anyway". Especially if the "fix" for so many of it is to keep reducing the performance via things like disabling HT, I'd be strongly re-evaluating being a heavily Intel focused customer.

I think Ars had an article on some older exploit that seems like it would work on Optane (it basically exploits data stored on memory during a reboot, which the fix is to make sure its pushed to the storage and then flush the RAM/memory before reboot - which if the storage and memory are the same as Optane's big potential is, then flushing it might be more problematic).

TBH, the biggest market for this kind of cpu is cloud providers, and they already have major discount, and intel also sold it directly to them.

Intel also makes custom chips for them (I think that's actually one of the big motivators behind EMIB development). AMD can of course as well, but that will be something that takes a little while to develop. Intel was smart to start doing that (although I think they also kinda had no choice, as if they tried to stonewall it, the companies would have looked at any and all alternatives to get what they want which would have set Intel on a fast track to getting x86/64 on the road to its dominance ending).

ARM is almost non-existent at the moment and has other issues such as the switch from x86 to ARM which might frighten some companies so I'm not sure Intel has to offer anything here OTOH, as we all know, Intel heavily subsidized companies that took Intel chips for tablets.

I was thinking about the historical RISC players in the server market (MIPS, POWER, SPARC, etc.). But after all they might have collapsed just because they were too expansive and didn't (couldn't) properly react to Intel prices, even official prices.

Yeah, considering Intel itself failed pretty spectacularly with Itanium, I'm not sure how much I'd contribute that to their shenanigans vs there being other reasons. Which Intel's subsidies probably did play some role, making things that were marginal to consider already.

Thats why serving a niche market or just a smaller segment is impossible. You are simply priced out. Legal or not. Its impossible to avoid. People is educated for many years and trained to use monopoly like behavior.

Thats why zen needs to be sold from laptops over desktop to servers. They cant just adress one market.

I'm not sure I'd call it a niche market though. Its the bread and butter for Intel (and was the key area that AMD made inroads back with Athlon 64). There's a reason why AMD was really targeting this market with their Zen design.

And that's also why the Zen design was so smart, it really was focused on servers, but also to be scaled through the range.

I don't think this necessarily plays out. Due to some technical difficulties, this generation of EYPC is having difficulties getting into the cloud space. It is still very much Intel there. Rome could be a very different story.

From my conversations at VMworld, this is more about the composed bundles vendors are selling. When customers are doing refreshes, they're not *just* buying a blade chassis, or a single server. They often have a cluster, or big application, and are buying servers and storage to fulfill that role. They're buying 16 nodes for HPE Composed Infrastructure (or Dell Composed Infrastructure). They're buying VxRail Hyperconverged racks.

For instance, it's no quiet secret that Cisco is eager to get more marketshare in the Hyperconverged space, and is aggressively discounting Hyperflex pods to the point where depending on the deal, they're pushing All-Flash for the price that you'd only get Hybrid from VMware vSAN or Nutanix.

Likewise AMD has been heavily pushing the 50% licensing savings angle on VMware and VDI infrastructure. Intel is not trying to counter the price of individual CPUs, but rather they're going "Ok, with your business discount, you'd be paying $10,000 more in vSphere licensing with our solution, what if we just absorb that cost."

I'm definitely not a fan of this, but it's a very common practice in the industry.

I'd guess a lot of that is that many of the major cloud players get custom chips from Intel, and just generally that they're going to be a little hesitant on a new platform. I think we'll see that start to shift a fair amount as AMD is very willing to accommodate custom work, and the general situation (all the Intel security issues, Intel's pricing and production issues, AMD having a very competitive product).

Absolutely there's more to this than just the chips, which is another big factor in trying to get in. AMD I'm sure knew this, and knew they weren't going to make huge inroads just off the bat, but I think that's why they skipped the iterative change for EPYC and moved to it being their lead platform.