Life on the PC front has suddenly become more competitive for Intel over the past four months or so. On December 7, Microsoft announced desktop support for ARM processors. On February 22, AMD announced its new line of Ryzen x86 processors. And just today, we learn that Microsoft will soon support ARM processors for Azure servers. Thus, AMD and ARM deliver 1-2 punch to Intel, and threaten its market dominance.
How Do AMD and ARM Deliver 1-2 Punch to Intel?
Some experts find the Ryzen CPU family particularly compelling. That’s because it offers “almost as good” levels of performance at lower prices. This is true for its top-of-the-line 8-core 16-thread Ryzen 7 1700 ($330 street) compared to the 4-core 8-thread Intel Core i7-7700K ($340 street). Don’t even think about the Intel 10-core 20-thread Core i7-6950X Extreme Edition unless paying over $1,500 is palatable. It’s been half-a-dozen years or more since AMD and Intel processors offered anything close to parity, and Intel’s gotten used to owning the market in the meantime. This should get interesting as benchmarks keep coming out, and the enthusiast market digests those results.
In some ways, the ARM news is more compelling. ARM owns the small form-factor market for tablets and many smartphones. Thus, this team-up may accomplish what Microsoft couldn’t do on its own — grab market share for hand-held devices. But Microsoft has really struggled with phones and small tablets, so a positive outcome is far from guaranteed.
Servers Are Where the REAL Action Is…
Today’s server-side combination specifically targets Azure servers, however. Thus, it tackles Intel in an area where the company generates a heap of profit. Because of the massive proliferation of cloud servers, and burgeoning uptake for Azure, there are real opportunities here. ARM processors have gained a good reputation as more power-efficient and more widely supported by OEMs than other chips. According to Bloomberg “Microsoft is planning to incorporate the ARM chips as it develops a new cloud server design” which it plans to discuss today at the Open Compute Project Summit in Santa Clara, CA. Just hearing that it’s on the Open Compute agenda already has me a LOT more interested. An open source architecture means it’s much more likely to be widely adopted and implemented (not to mention that Amazon and Open Stack/Rackspace are big supporters of the standard as well).
Is it time to start selling Intel short? The market is trading down today, and Intel is down 0.47% for the day as I write this. How will this shake out over the long term? Only time will tell!