Servers and Chips Are Hot

Worldwide server vendors posted strong sales for the second quarter of 2010. In other news, at the Hot Chips conference, IBM Corp. announced that it is developing a new deep-sleep mode for its Power processors, and Advanced Micro Devices Inc.(AMD) shared details about its next-generation chip architecture. AMD also reported that it would begin shipping its first low-power chips later this year, while ARM Holdings plc announced that it would release a new processor for low-powered servers.

Focal Points:

• Worldwide server sales rose 11 percent during the second quarter to $10.9 billion, marking the second consecutive quarter of revenue growth for the server market and the biggest jump since 2003, according to industry research. Despite this growth, worldwide server revenue is still below historic highs recorded in 2008, as a result of double-digit declines last year. According to this latest research, demand for volume and mid-range servers, which is defined as servers costing between $25,000 and $250,000, grew 32 percent and 16 percent, respectively, compared to the same period last year. However revenue for high-end systems, which cost $250,000 or more, dropped 27.2 percent, the seventh consecutive quarterly decline, the research added. Specifically, IBM lost its top spot from last year to Hewlett-Packard Co. (HP). Revenue for IBM servers dropped 3.2 percent to $3.2 billion, while revenue for HP servers rose 26 percent to $3.5 billion, said industry pundits.
• IBM announced that it is developing a new deep-sleep mode for its Power processors, allowing the chips to draw virtually no power while they are idle. IBM's Power7 chips already have three sleep modes – nap, sleep, and heavy sleep. These are implemented based on the type of workload being run, and how much latency an application can tolerate before the processor comes back to life, said IBM. Although the new deep-sleep mode will cut power to the processor almost entirely, it will also take 10 to 20 milliseconds to wake up again, IBM added. IBM did not say which chips will have the new sleep state or provide other details. Meanwhile, AMD shared details about its next-generation chip architecture, code-named Bulldozer. Bulldozer will form the basis for AMD's upcoming 16-core server processors, which will perform up to 50-percent faster than chips based on earlier architectures, said AMD. The first chips are expected to be server processors code-named Interlagos, and will have between 12 and 16 cores. They are scheduled for release next year, AMD added.
• AMD also announced that later this year it will ship its first low-power chip, code-named Ontario, based on the Bobcat architecture. Combining a CPU and graphics processing unit (GPU) into one piece of silicon, the chip will be targeted to manufacturers of netbooks and ultraportable laptops, said AMD. In related news, ARM announced that it would soon release a new processor for low-powered servers that can run virtualization software. The virtualization capabilities will be introduced with the next version of ARM's Cortex A processor code-named Eagle. According to the company, several vendors are already developing hypervisor software for the new chip design, including Mentor Graphics Inc., Open Kernel Labs, VirtualLogix Inc., and VMware, Inc.

Experton Group believes the rate of change for server and chip technologies is not slowing down, even as the prices continue to fall. IBM lost its positioning in the high-end server space as customers waited for its new high-end Power Systems and System z processors. The feeds and speeds game has shifted from basic GHz performance and two- and four-core systems to eight, 12, 16 and more cores, energy management features, and other embedded technological advances, such as graphics and virtualization. IT executives should be refreshing their four-year old (and older) server technologies with the latest models, as the ROI for the modernization should be less than 12 months.