[SemiAccurate] Intel preferentially offers two customers Skylake Xeon CPUs

[Arachnotronic]

It looks like Intel is playing favorites with Skylake Xeons in a way that will shatter the industry status quo. In SemiAccurate’s opinion this move is going to inflict a deep wound in OEMs and top tier customer relations and hurt Intel badly in the mid- and long term.

Lets say this straight up front, SemiAccurate thinks Intel’s latest move is going to cause them irreparable damage in public image, customer relations, and long term sales. What are they doing? Several trusted sources say that later today, likely at Supercomputing 16, the company will announce they have pulled in Purley aka Skylake-EP Xeons, to this year and will sell them to two key customers. So far this sounds like good news, next generation cash-cow server CPUs early is a positive thing.

The problems is the two key customers bit, Google and Facebook. Why is this a problem? They are the only ones getting them. If this sounds like a supply/ramping problem, it isn’t, they are the only ones allowed to buy them until launch in Q2/2017. To put the cherry on top of this blunder, some of the sources said that the non-favored two only found out they were shut out very recently with emphasis on very.

https://semiaccurate.com/2016/11/17/intel-preferentially-offers-two-customers-skylake-xeon-cpus/

 

[VirtualLarry]

While "early access" to products, for your two biggest customers isn't necessarily a bad thing, it sure will piss off the other OEM customers, quite willing to wave money under Intel's nose.

On the other hand, this is starting to sound less like capitalism, and more like a command economy.

I wonder how much the gov't had to do with this decision? After all, they are the entity that Google and Facebook are send all that user behavioral data to, besides their own ad networks.

 

[Yakk]

So Google and Facebook get to start updating their server farms earlier? Who is supplying the hardware if even DELL is cutoff by Intel? Which OEMs are authorized to sell to Google & Facebook?

Bizarre, but not unexpected with the massive amount of money these 2 companies alone can supply.

 

[Qwertilot]

They both do an awful lot of their server hardware themselves these days. They're working at such huge scales that it makes sense.

 

[NTMBK]

So Google and Facebook get to start updating their server farms earlier? Who is supplying the hardware if even DELL is cutoff by Intel? Which OEMs are authorized to sell to Google & Facebook?

Google has been building their own servers for a while. Very customised hardware, with every single unneeded thing removed. Even things like enclosures are left out. And I think each server gets given DC power (instead of having a per-server AC/DC transformer).

 

[jpiniero]

I'm surprised MS and Amazon aren't included in this. The Cloud is pretty much where server sales are going... OEM sales to companies are declining.

 

[Nothingness]

Is this something fundamentally new? Or is Charlie firing his anti-Intel gun again?

 

[Arachnotronic]

Is this something fundamentally new? Or is Charlie firing his anti-Intel gun again?

Not really new per se...Intel has always shipped silicon to priority customers thru its Early Ship program. The difference seems to be that instead of selling silicon early to the "Super 7," Intel is now apparently restricting those early shipments to two customers.

I have to wonder if the recent hullabaloo around Google potentially endorsing Qualcomm's server solutions (which never actually happened) led Intel to try to "sweeten" the deal for Google.

 

[witeken]

https://semiaccurate.com/2016/11/17/intel-preferentially-offers-two-customers-skylake-xeon-cpus/

Uh, we already know this a long time that Intel does all sorts of things to please big DCG customers like early sampling, custom silicon, etc.

So this post is just anti-Intel spin to make it look like (1) this is "new(s)" (2) this is something that matters for people to care about, which it isn't.

If you pay, you get more. It's that easy. In any case nice to see Skylake getting 2016 launch... for certain customers .

 

[LTC8K6]

I recall Apple getting 100% of a certain GPU without exception.

 

[witeken]

https://semiaccurate.com/2016/11/17/intel-preferentially-offers-two-customers-skylake-xeon-cpus/

But anyway, will Intel actually (formally) announce something today ?

 

[Nothingness]

I have to wonder if the recent hullabaloo around Google potentially endorsing Qualcomm's server solutions (which never actually happened) led Intel to try to "sweeten" the deal for Google.

That would match what some have been saying: the ARM server threat will only be used to get better deals with Intel. If that indeed is the case, I wonder if prices were impacted too.

Anyway, this hopefully means Skylake-EP is in good shape, in particular AVX-512

 

[witeken]

So I suppose this is the news talked about?

https://blog.google/topics/google-c...lliance-accelerate-cloud-adoption-enterprise/

Doesn't even mention Skylake.

 

[Arachnotronic]

That would match what some have been saying: the ARM server threat will only be used to get better deals with Intel. If that indeed is the case, I wonder if prices were impacted too.

That's generally what Intel has said -- ARM (and I suspect AMD, soon) will be used to try get Intel to price a bit more aggressively per unit of performance. But, Intel's processors are really, really hard to beat in this area.

 

[daxzy]

It's well known that Google, at the very least, takes pre-production Xeon CPU's since the Sandy-Bridge Xeon era.

It's not so much preferential treatment as it is Google/Facebook acknowledging the risks of using a pre-production stepping (and its associated errata) and going with it.

 

[lolfail9001]

It's well known that Google, at the very least, takes pre-production Xeon CPU's since the Sandy-Bridge Xeon era.

It's not so much preferential treatment as it is Google/Facebook acknowledging the risks of using a pre-production stepping (and its associated errata) and going with it.

Generally the big 7 was getting early access to these before. Now looks like only Google/FB are.

 

[daxzy]

Generally the big 7 was getting early access to these before. Now looks like only Google/FB are.

I'm not sure what you mean. Supermicro and Microsoft have already been demoing Purley (Skylake-EP) platforms.

Google/Facebook just want to actually BUY (or perhaps lease, as I can't imagine Intel letting them resell the CPU's after they decommission them) the pre-production steppings and bulk and deploy them. They believe the risks and errata of the pre-production stepping is worth the gain in potential performance. Google did this with Romley (SandyBridge-EP), where the prr-production stepping was missing certain features (which they obviously didn't care for).

 

[Rifter]

Well intel is still the only choice so i dont really see this hurting them in the long term, short term sure its a absolutely horrible thing to do PR wise but it will blow over and then be business as usual.

Unless Zen is a home run, then i could see the other OEM's jumping ship. But for now intel has all the cards.

 

[jihe]

What's the problem? Intel can sell to whoever they want to.

 

[Nothingness]

What's the problem? Intel can sell to whoever they want to.

Indeed. Intel has a quasi-monopole in servers so they are free to do what they want. But then customers can be displeased and go to competition as retaliation. Of course this means there has to be competition

If the situation ever changes their bad behavior (assuming they are behaving badly, which is not proved) might fire back. In some segments where there is competition, such as mobile, very few wanted to deal with Intel due to some perceived arrogance and lack of customer focus; on top of that, Intel mobile products were not competitive, so the issue was obvious some years ago.

 

[Valantar]

Is this news? "Company signs deal with other companies to give access to pre-production products. Other companies not invited." No kidding? I'm not a huge fan of Intel, but this is not newsworthy in any way, shape or form.

 

[jihe]

Indeed. Intel has a quasi-monopole in servers so they are free to do what they want. But then customers can be displeased and go to competition as retaliation. Of course this means there has to be competition

If the situation ever changes their bad behavior (assuming they are behaving badly, which is not proved) might fire back. In some segments where there is competition, such as mobile, very few wanted to deal with Intel due to some perceived arrogance and lack of customer focus; on top of that, Intel mobile products were not competitive, so the issue was obvious some years ago.

Why would anyone be displeased? Do they have a right to everything Intel produces? What if Intel produces a special chip just to satisfy the particular need of one company? Should people be outraged about that too?

 

[Nothingness]

Why would anyone be displeased? Do they have a right to everything Intel produces?

If you are a big player and one of your competitor gets something from a company that gives it an advantage that you weren't given the opportunity to get, you'll be displeased.

What if Intel produces a special chip just to satisfy the particular need of one company?

If that's a design by contract ("please add me 10MB of cache") and that every big customer gets the possibility to do so, then that's definitely OK.

Should people be outraged about that too?

Who is talking about being outraged? I'm talking about companies, they don't get outraged, but can be displeased and they have ways of expressing that by not dealing with you the same way they used to.