CRN Editor-In-Chief Michael Vizard and CRN Senior Editor Edward F. Moltzen recently spoke with Advanced Micro Devices Chairman, President and CEO Hector Ruiz, about the company's future technology direction and channel commitment. Below is an excerpt from the interview.
CRN: Opteron has done some interesting things on the price/performance side of the server equation. Could you enlighten us a little bit more about what's going to happen in terms of price/performance in the server market for this year and next?
Ruiz: When we put together a strategy to become relevant in the enterprise and in the server space, we developed a road map around our strategy for AMD 64 with Opteron as the server product. That's technology on the road map that's clearly aggressive and intense as you look ahead, which we've shown the customer, and part of that road map includes a pretty aggressive migration to a multi-core product beginning next year. But we believe that from the moment that Opteron was created with on-board memory controller and hypertransport technology--all of it known as DirectConnect technology--that really enabled us to [provide] the premier multicore, server CPUs. The intent was to make a significant--not minor, but significant--change to the price/performance equation in the server space. We believe one of the reasons that there has not been as rapid an adoption of people going from two [processors] to four [processors] is there has been a cost, price/-performance issue. People would rather buy two [two-processor servers] rather than one [four-processor server] and our product, we believe, can make a dramatic change to that equation.
CRN: Then why would it be better for people to buy one than two?
Ruiz: Well, that's a price/performance issue. And so we listen to the IT professionals and it gives them a lot of flexibility for a very low cost. They can scale up when they need to four [processors] when they need four. And when they don't, they've got a very powerful machine. Because the cost equation is so heavily skewed in their favor, there's really a benefit from adding performance when you need it.
CRN: So I can scale, essentially, either vertically or horizontally, and it's up to me without having to lock into one particular hardware look and feel or architecture?
Ruiz: The way we kind of like to say it is that we put the customer in control of how he wants to use the processing power.
CRN: Recently you've signed up a number of first-tier vendors for the Opteron. What do you think is going to be the balance going forward between the first tier and the traditional white-box/custom-system guys as it relates to Opteron?
Ruiz: I believe that [for] tier-one people--[Hewlett-Packard], Sun [Microsystems] and IBM--that it's really in their best interest to have a very healthy system integrator market and system integrator participation because it helps make technology available and, in a way, it's sort of an ecosystem that works to everyone's benefit. So I believe that the system integrator market and the white-box space will continue to be a very important and the HPs, IBMs and Suns of the world will continue to encourage them.
CRN: What's the mix now of Opteron systems that are being shipped through tier-one vs. Opteron systems that are being shipped through everyone else, like the custom-systems folks?
Ruiz: I think it's geared toward the tier-one vendors because that's how we started. But the system integrator and custom-system [channel] is growing very rapidly. And my expectation [is that] right now we're in the early stages of the ramp. But my expectation also is that it will, over time, approximate a more balanced situation.
CRN: Do you think it makes it easier for the second-tier guys to sell, once the first-tier guys start embracing Opteron?
Ruiz: I think there is some truth to that. I think that once the market has validated--and I think the tier-ones are the fastest way to do it--a particular technology, then some of the system integrators can focus on the value proposition for their particular [customers] and be able to address some of the very narrow segments that they go after.
CRN: Intel recently came out and said they were going to do 64-bit. Can you articulate the fundamental differences in the end-user approach vs. Intel's approach?
Ruiz: Our competitors' strategy appears to be extending the older architecture, which we call the seventh-generation computer, and extending it to be able to have 64-bit extensions available to that architecture. Our approach is an eighth-generation processor, meaning the Hammer architecture, K8, and as a result there are significant architectural differences--micro architectural differences--that I believe is what gives us tremendous price/performance advantage. As a result of theirs being an extension to an older architecture, they don't have on-board memory controller, or hypertransport technology or the DirectConnect architecture. That's really what I think brings a tremendous capability to our technology. ...
CRN: Intel, with its Itanium platform, has been displacing RISC-based systems to the extent that they've been sold to this point. Opteron-based systems have supplanted, for the most part, Xeon-based systems or they are incremental increases in server capacity. No. 1, do you see that as the case? And No. 2, if it is, how long is it going to track that way before there is some sort of a change?
Ruiz: It's all about technology that changes so rapidly. Remember that Itanium is a 10-plus-year-old conception. And, as a result, it was conceived at a time when the difference between RISC and CISC was significant enough to actually make meaningful comparisons. But technology gets changed so much that today, when you actually do many instructions per second and you've learned to optimize performance, the comparisons are not as significant. So what I think is happening is Itanium has been relegated to be considered for fairly high-end applications where it competes against UltraSPARC or the Power4 Architecture of IBM. But when it comes to the volume server space where other operating systems are incredibly pervasive in the industry--the extension of 64-bit computing the x86 architecture--it's pretty compelling. And I don't think people are thinking, 'Should I replace RISC with this, or CISC with that?' The thinking is, 'How can I get the most out of this investment?' When you step back and look at what is happening it is clear to me--maybe not to everyone else, but it is clear to me--that we just obsoleted all 32-bit applications only in terms of hardware. Because if you are going to buy a computer today, what would compel you to buy one that is only 32 bits when you can get a better price/performance with one that is compatible with 64-bit?
CRN: Do you worry that you're going to extend out the lifetime and cycle of products because if I buy a 64-bit server from you guys, or even a client for that matter, that machinery will last longer going forward than it would have if it was just a standard 32-bit system?
Ruiz: I think that's possible. Frankly, from where we are today, according to independent research data, at the end of the first quarter we were at 4 percent of the server market. I think we have a lot of room to grow before we have to worry whether the replacement cycle is too long.
CRN: What applications do you think are going to drive 64-bit on the desktop and the notebook side? If I'm a white-box builder, where should I be focusing my effort in that market?
Ruiz: Because of the nature of the beast, it starts with the things that are very high-performance-demanding. And by performance, I don't mean just speed of computation, but the ability to handle classic and what we call cinematic computing. And, by definition, that means people in gaming, early adopters. Those are places where it's pretty exciting for them to do. And I think what you're going to see from our software partners is that as they get more into the ecosystem of 64-bit computing, that's going to lead them to develop more small-business applications, home-office applications that are very intense in handling data, very intense in graphics and very intense in broadband communications. So I see this as the next wave of consumer PCs out, beginning toward the end of this year and moving faster over the next couple of years.
CRN: Do you see an opportunity to build out digital home systems where there's an AMD server and an AMD client, and includes the gaming system and includes the security systems and an AMD infrastructure around the home?