andrew-feldman
Business Management

AMD Pilots a New Course to Cloud Servers

In a central London hotel meeting room, Andrew Feldman, GM and corporate VP for the server division at AMD, shows me a picture taken at the time of the 2013 papal inauguration where – what’s the appropriate collective noun here… ah yes – a host of worshippers point camera-phones and digital cameras at Pope Benedict XVI.

“Every single one of these images and videos will be saved and many shared, posted to sites like Flickr, Facebook and YouTube, and the ramifications are profound,” he says. “We see a profound change brought about in the cloud and that change means you can’t go on as you did before.”

Effectively, Feldman says, you have to ask what sort of servers and storage systems would work in a world where rich, unstructured data grows at dizzying rates, where software is increasingly delivered as a service and where computing resources begin to concentrate in hyper-scale cloud datacentres such as those belonging to Google and Amazon. For a company best known as a combatant to the world’s biggest chip maker, Intel, that challenge is forcing a very sharp change in direction and for Feldman, reaching again for a spiritual metaphor it also means AMD ending “the religious adherence to the x86 instruction set” by opening up to other microarchitectures.

Feldman joined AMD early in 2012 with the $334m purchase of SeaMicro (PDF) where he was CEO and founder. His vision remains intact: build energy-efficient servers and fabrics for cloud datacentres where massive scalability and fast interconnects between processors, and between processors and other components are required to cope with dynamic web content, video, social networks, search and shifting workloads.

Together with a move to expand in the embedded systems area and efforts such as Heterogeneous System Architecture for more efficient processing, it’s a change strategy that will see AMD move away from the shadows of Intel, a company that for decades has played a corporate version of Whac-A-Mole with its smaller rival. However, continuing a long tradition of handbags-at-five-paces and one-upmanship between the pair, Feldman can’t help comparing AMD’s strategy with that of Intel, which has recently been scrutinised over the appointment of former manufacturing boss Brian Krzanich as CEO at a time when it is struggling with declining PC demand and a failure to address successfully the tablet and smartphone sectors.

“What is unlikely to work is more of the same,” Feldman says. “It’s time for different and new ideas rather than doubling-down on manufacturing bragging about spending $12bn or $15bn dollars a year [on that]. It’s been a successful strategy [for Intel in the past] but when the fabs are partly empty that leaves a crater. Fabs are perishable objects and destroy capital at unprecedented rates. We’re taking two different approaches. The question is whether [Intel’s old strategy] will do well in the future; we think not.”

Funnily enough, the road AMD is taking will even see it work as an Odd Couple partnership with its old adversary, as SeaMicro offers its systems with Intel processors as well as those of AMD and, from next year, with AMD processor designs based on cores from a company that is today a thorn in Intel’s side – ARM.

“You can have an Intel-based system if you want it. We’re relinquishing a religious adherence; we continue to believe in x86 but there are other ways. ARM’s model is an extremely forward-looking model. By being an IP provider and understanding the ecosystem they were able to foster innovation. Intel, by comparison, is made up of a narrower set of winners.”

AMD will continue supplying PC and volume server processors and ATI graphics cards but Feldman says it will no longer be so dependent on the client side. Rather than focusing on a cut-throat market of billions of consumers and business users, AMD will, in cloud datacenters, be able to focus on perhaps 400 customers worldwide, the “internet brands and innovators” that will act as compute hubs and platforms for many of us.

In this market, the combination of SeaMicro’s intellectual property and AMD’s global scale and server know-how will be the company’s USP. “Making a server CPU is not baking a cake. You don’t take the ARM core and add water. There are no ARM licensees that have our server IP in compression, RAS, I/O… and we have the industry’s premier fabric.”

Add to that the inflection point of cloud and things start to get pretty interesting.

“The x86 server world has a one-size-fits-all mentality and that’s a problem for the people looking to differentiate themselves. Mega-datacentres [and the big names in cloud that run them] use servers to manufacture profit. It helps them make money and that’s very different from the enterprise. There’s a direct impact on their bottom line.”

Feldman points to the rise of companies like Nutanix, Pure Storage, Tintri and Nimble Storage and notes that, “The changes are not just in compute, they’re in storage and networking. These are increasingly important for servers and the relationships between server and storage and I/O and networks have never been more important.”

Even the cadence of technology adoption is changing, as distributed datacentre technologies such as Hadoop for large data-set computation and Cassandra in database, enter the mainstream very quickly after having been created by Google, Facebook and others for their own purposes. Also, trends such as bring-your-own-device and consumerisation of IT mean people can have an idea and spin it up as an IT project by a credit-card purchase on AWS, bypassing many of the usual IT and procurement sign-off processes.

“We used to be taught there were early-adopters and a chasm and that’s all BS now. Early-adopters got big and are big enough to be markets on their own; they define the future and that rolls back into the enterprise.”

Feldman embodies a new AMD and a company which, as he corrects me, if not betting the farm is “betting the back 40 acres” on a new model of computing with a new management team that includes CEO Rory Read, recruited from Lenovo; Lisa Su, ex-IBM and Freescale; and Mark Papermaster, formerly of Apple, IBM and Cisco. It’s a company, he says, that is “not afraid to make bold decisions” and take advantage of the change in the air.

With AMD market cap at under $3bn at time of writing (Intel, to provide comparison, is valued at over $125bn) and server market shares in single figures, the company could do with some quick wins. Feldman says that the SeaMicro business has been “growing at an extraordinary clip” and that the opportunity is large and growing; certainly, as the company has shown in the past with big hits like its 286, 386 and Opteron processors, if it can win, it can probably win big. There’s no dispensation that can guarantee its success, but AMD’s new vocation looks promising.

 

Martin Veitch is Editorial Director at IDG Connect

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Martin Veitch

Martin Veitch is Contributing Editor for IDG Connect

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