Thursday, March 01, 2012

AMD's Apple Plan

Intel makes and sells a lot of CPUs, it owns 80% of the PC CPU market, but its market cap is only 25% of Apple.

With the SeaMicro acquisition, AMD will start selling cloud computing servers equipped with Intel's Atom chips.

The reason is simple. AMD's new CEO realizes that it is in the business of making money. And the Apple story says selling finished highend products brings in more profits.

The AMD SeaMicro technology shows that you actually don't need powerful and complex chips like the 16 core Opterons or Xeons, a bunch of Atoms can achieve similar effects. In ApacheBench for web performance, a single 10U AMD SeaMicro server with 512 Atoms can outperform 45 dual socket quad core servers, but uses 25% of the power and space consumed by the latter.

Intel would have no objections to that statement.

So that's how AMD is shifting its focus from the struggle with Intel to corporate profitability.

If Intel wants to grow like Apple, it will need to rethink its own goals too. A monopolistic mindset bent on deriving profits by eliminating competition does not seem to work well in the internet era.

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