Epyc 7 nm: AMD attempts a new breakthrough in servers

Published : 11/29/2018 15:37:30
Categories : News APY Europe

Epyc 7 nm: AMD attempts a new breakthrough in servers

Complete article of thenumeriques.com of 27/11/2018

AMD's Next Horizon conference was an opportunity for the brand to present its ambitions on the server market, particularly with the new generation of its Epyc range engraved in 7 nm and which will gradually replace the 14 nm generation. Are these ambitions realistic in the face of Intel's existing offer? Back on the server market where many actors have not managed to find a place.

In the world of computing, very few markets are as much fan of greed as that of servers, especially processors. If historically many actors were present (Sun, IBM ...), their presence has at best reduced over the years, if they have not simply disappeared. Others, like AMD, have already tried the adventure with a relative and ephemeral success. This was the case of the Opteron range, in the 2000s, which had just managed to exceed 20% of market share.

The announcement of the new generation of Epyc processors engraved in 7 nm (when the previous generation was in 14 nm) thus intervenes this context: a new AMD offensive with for the first time strong technological arguments on its historical competitor ( 7 nm processors that allow a higher density of transistors and a reduced consumption with identical performances). Important arguments, certainly, but coming in a significantly different context.

In theory, the 7 nm will bring significant benefits, whether on consumption, density (AMD offering chips up to 64 cores) or performance. And this at a time when the products of its competitor will remain blocked in 14 nm. But even if AMD executes perfectly its strategy and that all the promises are held, it will not be enough to invert overnight market shares on the server (it is estimated the share of Epyc of previous generation under 5% in 2018) . The competitive advantage is not everything.

Because unlike the PC world where the end customer chooses his processor, the server is held by a handful of OEMs (Dell, HPE, Supermicro ...) who decides the range of products they sell. Like the world of laptops, AMD is dependent on their willingness to offer interesting products. And at the time of Opteron, AMD most often served as "second quote" to negotiate preferential rates at Intel.

AMD has probably learned from its mistakes, many leaders have since passed, but if we continue the parallel with the laptop market, we can see that they still have not found the solution to resolve the relationship issue with the OEMs.

The other important point to remember is that, unlike buying a PC, servers are usually tied to multi-year deployment contracts. What add an inertia that plays in favor of Intel, already comfortably installed and enjoys a rare agility in the art of business relations.

The impact of the cloud changes the equilibrium

A potential chance for AMD comes from the fact that a handful of very large customers have upset the balance. 40% of the server CPU market is currently focused on 7 customers, decreasing the importance of OEMs. Unsurprisingly, these are the massive players in the cloud, like the AWS mastodon (Amazon), but also Azure (Microsoft) and GCE (Google), not to mention the big Chinese players like Tencent.

One of the most important strategic announcements of the Next Horizon conference was that, for the first time, Amazon AWS will be offering Epyc-based offerings on its EC2 cloud (its main offering). Instances sold 10% cheaper than their Intel counterparts.

This change in the equilibrium can be an opportunity, provided that it does not result in a massive fall in profitability, these big players having a very big bargaining power !

processeur EPYC 7nm

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