Barron's Investor's Soapbox post references Intel's 2X increase in Intel data center business

Barron's has a guest post that references Intel's intent to double its data center business.

Maxim Group

Intel's management has reiterated its commitment to double their Data Center business, currently about 21% of sales but 45% of profit dollars, over the next few years.

...

With its multiprong strategy, Intel is outspending all its server competitors combined. The company will offer both scale-up architecture with high single-thread performance as well as scale-out platform for lighter weight jobs that emphasizes power efficiency, integration and low cost. It is unlikely that any other company can offer the breadth of products to compete with Intel in all server market segments. Intel's 14nm products have raised the bar for competitors across multiple segments. As such, Intel is expected to remain the dominant processor supplier for the near future.

-- Ashok Kumar

Intel has announced its intent to reinvent the data center.

The peak of dual processor servers is coming, Intel sets new path towards the mainframe

24 years ago in 1989 Compaq released the first dual processor, RAID Intel 486 Server.

At its initial release in November 1989, the SystemPro supported up to two 33 MHz 386 processors, but early in 1990 33 MHz 486 processors became an option (the processors were housed on proprietarydaughterboards).

The SystemPro, along with the simultaneously released Compaq Deskpro 486, was one of the first two commercially available computer systems containing the new EISA bus. The SystemPro was also one of the first PC-style systems specifically designed as a network server, and as such was built from the ground up to take full advantage of the EISA bus. It included such features as multiprocessing (the original systems were asymmetric-only), hardware RAID, and bus-mastering network cards. All models of SystemPro used a full-height tower configuration, with eight internal hard drive bays.

Over the past 24 years the data center has seen a steady growth of dual processor servers.

Yesterday Intel announced a re-architecting of the datacenter.

And the future is not dual processor servers to deliver compute, I/O and memory.  The Pooled compute, Pooled Memory, Pooled I/O  looks like a mainframe.

Most media is focusing on new processors announced.  That is the old world of thinking.

Intel makes the point of going from proprietary to standards with supercomputers.

And a diversity of workloads.  The high cpu, memory, I/O was the realm of supercomputers and mainframes.

Intel is also driving innovation at the low end, but these are not the systems to run the high resource workloads.

Traditional servers are also evolving. To meet the diverse needs of datacenter operators who deploy everything from compute intensive database applications to consumer facing Web services that benefit from smaller, more energy-efficient processing, Intel outlined its plan to optimize workloads, including customized CPU and SoC configurations.

Thinking about how Intel is ready to change the Data Center

It is early morning and I am in Portland for 4 days.  OSCON is going on this week.

On July 22. Intel announced its re-architecting of the datacenter.

Intel Aims to "Re-Architect" Datacenters to Meet Demand for New Services

 

But, what took me to Portland was not OSCON, but catching up with friends and getting a chance to tour Intel's HPC datacenter.

 

If you want to see the data center look at this video.

There are many things that can be discussed with Intel's press announcement and i'll write a bunch of posts.

 

Google hits #5 spot in Server Mfr Ranking, The Big Users defining the market

Wired has a post that has people's attention that HP, Dell, and IBM are no longer the dominant Server force of the past.  Part of the past is the reliance on IDC and Gartner to get a view on the market.

It should be noted, however, that research operations such as IDC and Gartner don’t have the best view into direct sales by the ODMs — let alone Google’s highly secretive hardware operation — and these hidden parts of the market are increasingly important. It’s the big web players that are moving away from the HPs and the Dells, and most of these same companies offer large “cloud” services that let other businesses run their operations without purchasing servers in the first place.

What is catching people's attention is that Google is the #5 manufacturer.

But just four years later, Bryant says, the landscape has completely changed. Today, she explains,eight server makers account for 75 percent of Intel’s server chip revenues, and at least one of those eight doesn’t even sell servers. It only makes servers for itself. “Google is something like number five on that list,” Bryant told us on Monday evening, during a dinner with reporters in downtown San Francisco.

But, the overall pattern that is occurring is Google, Amazon, Facebook, Tencent, and Microsoft are investing and demanding server innovation that the big OEMs (HP, Dell, and IBM) are not necessarily set up to serve.  Which then brings up the ODMs of Quanta, Tyan, Supermicro, ZT Systems and others who are rising up the ranks.

As Bryant points out, other companies are now buying machines directly from “original design manufacturers,” or ODMs, in Asia, working to cut costs in much the same way. This includes Facebook, and according to a former employee of one large ODM, it includes Amazon as well.

These ODMs in general don't have the marketing budgets to have IDC and Gartner analyze and report their sales. 

Would you trust an Intel executive or IDC/Gartner and a vendor to give a report on the state of the server market?

But an HP spokesperson said her comments were inconsistent with the latest server market stats from research outfit IDC, which still put the combined market share of HP, Dell, and IBM at 73.9 percent, down slightly from 78.2 percent in 2008.

Servers and Data Centers, Intel's formula for Profit Margins

Barron's has a post on Intel' presentation at a Morgan Stanley Technology event.

• FEBRUARY 28, 2011, 2:42 PM ET

Intel Talks Up Data Center, Networking Prospects

By Tiernan Ray

Most interesting presentation today by Intel’s (INTC) chief of its data center unit,Kirk Skaugen, speaking at the Morgan Stanley Tech, Media and Telecomconference.

One of the more interesting facts was Intel's server processor margins.

Since 2005, Intel’s increased its share of the server market for processors from 80% to 92%, he notes and increased its average selling prices by 60%. Intel’s total unit volume of server chips is about the same as in 2005 as a percentage of total company shipment volume, at 5.5%, but those chips now make up 22% of revenue, double what they were five years ago, and a third of Intel’s profit.

One other part the author discussed as interesting is Intel's comment on Networking.

But another interesting one was Skaugen’s insistence the networking market is going the way of PC microprocessors:

So if you look at an old Cisco [Systems (CSCO) switch or router, it used to be internally developed ASIC from Cisco. If you open up a Nexus 5000 today it’s a Xeon microprocessor next to an ASIC. And I bet you in the future you’re going to just see two Xeon microprocessors there because we’ll put new instructions into the chip that will accelerate things that used to be proprietary.