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New Processor Choices On The Horizon

With their almost total ownership of the market, the IT community would be forgiven for thinking that Intel and AMD are the only two companies developing and shipping server processors. The two companies split almost 99 percent of the x86 PC server market: Intel with the lion's share of 92 percent and AMD at 6.9 percent, according to IDC.

And when it comes to the total microprocessor market, Intel takes 82.7 percent of the market, while AMD owns about 15.5 percent, Mercury Research estimated in a Q2 2004 report.

There are smaller chip designers, though, that are carving out a place for themselves by creating processors that meet very specific needs. These companies started out building chips for other markets, and now are looking at the server market as a natural segue from their initial efforts. They face an uphill battle: Combined, Transmeta Corp., and VIA Technologies, for example, have yet to claim a single point of market share.

"Transmeta, with its specialty in low power x86 compatible parts, is going to play in blades"they have a small percentage of revenue from blades," said Shane Rau, program manager for PC semiconductors at Mountain View, Calif.-based research firm IDC. "VIA has a concentration on low-end microprocessor for emerging markets."

Transmeta and VIA claim there's plenty of opportunity for them. "The microprocessor market is huge," said Greg Rose, director of marketing at Transmeta, Santa Clara, Calif. "Transmeta's feeling is that companies can easily excel and there's enough room for all of us. We've defined our value proposition and our key differentiation in performance per watt per dollar. We feel we are a valuable alternative to competitive offerings."

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