Top 10 Chip Stories to Watch in 2008

8. Platforms, Platforms, Platforms

If 2007 was the year hardware platforms really found purchase, 2008 will be the year they really take off, said panelists. For the channel, that's exciting news. Building around integrated hardware, firmware and software platforms is a no-brainer for makers of custom systems. Intel's vPro and Centrino Pro platforms got the most channel ink in 2007, and it's no wonder. Those platforms for commercial desktop and notebook clients are designed to enable secure, dynamic remote system management below the operating system, giving vPro and Centrino Pro broad appeal to internal IT administrators and managed service providers alike.

AMD closed out its year with the release of its Spider platform, a mid-priced integrated building block for enthusiast systems that incorporates its new quad-core Phenom CPU, new graphics cards from its ATI division, its 7-series chipset, and overclocking tools for hard-core gamers. Somewhat lost in the shuffle of AMD's financial and manufacturing struggles was the news that AMD is only just beginning to capitalize on the synergy between its CPU and GPU divisions since acquiring ATI. Going forward, AMD will unveil its third-generation mobile platform, Puma, and a commercial client platform called Hardcastle in 2008. Meanwhile, Intel has platforms a-plenty in store for next year, including a 45nm refresh of Santa Rosa (desktops/notebooks), Montevina (the fifth-generation Centrino platform set to succeed Santa Rosa), and its 'systems-on-a-chip' Silverthorne (UMPCs) and Canmore (consumer electronics devices) platforms.

Nvidia, too, will be making platform plays, such as its late-2007 release of integrated graphics chipsets for lower-end Intel CPUs. Perhaps more interesting than that is the work Nvidia is doing with other components builders to create a system-wide standard called Enthusiast System Architecture. That initiative establishes an information-sharing protocol between PC power supplies, chassis and water-cooling systems that can be used to adjust operating parameters for those components, giving builders and users of high-performance PC systems a new way to fine-tune primary system support components.

Platforms "represent the current dominating trend, multiple components under one brand," Rau said. "Years ago, the chipmaker would just throw a processor over the wall to the OEM. Those days are gone."

Added McCarron: "Platform-wise, Nivida is moving into the Intel chipset market. The year of the battle between Intel and Nvidia is this year. Both Intel and Nvidia have very good track records on execution."

9. Whitebook Wonderland

Will we ever have a whitebook ecosystem that rivals the whitebox desktop and server channel? On the one hand, with major changes to its Verified By Intel (VBI) standardization program announced late in 2007, Intel basically conceded that there's no good way to police many notebook components to the extent it does for desktop and server/workstation building blocks. On the other hand, analysts agree that notebook shipments are going to overtake desktops sometime in the first half of 2009, if not near the end of 2008. For system builders, the question is whether the growing demand for mobile PCs -- particularly in custom-hungry verticals like education and health care -- justifies entering the whitebook fray in the face of intense competition from major notebook vendors.

The profitability of whitebooks will probably never match that of whiteboxes in their heyday, said panelists. What's more, few in the channel will be pure-play whitebook builders -- most system builders with whitebook offerings will also have managed service offerings and even branded notebooks in their mix. So while the sheer demand for mobile PCs guarantees that a whitebook ecosystem is going to grow and thrive, it's going to look a lot different than it did in the past.

"There is a transition from desktops happening. But the whitebook will only be successful if Intel makes it successful," said Toste. "Intel first did Common Building Blocks, then VBI. It's moving the whole ecosystem for the worldwide channel based on these standards. They want to really leapfrog the Asuses, etc., and go directly to the people making the cases, the power supplies, the displays. What to watch is what Intel does in mobile strategy for the channel."

McCarron said he expects development in the whitebook channel. "If you look at how rapidly this switch from desktops to laptops is happening -- 2009 is virtually guaranteed, and I think 2008 is likely. There is already the beginnings of a whitebook ecosystem, and I expect it to continue. It's going to be hard to standardize motherboards too much, but optical drives can be standardized, and memory and hard drives already are. I'd expect to see multiple ecosystems, with a few key suppliers."

Added Intel's Dallman: "We're still pretty committed to improving the channel's ability to integrate and provide notebooks. It won't go to the degree of integration that they were able to in desktops, because the parts are somewhat molded together. But Common Building Blocks has been taken on by even HP. With the rapid changes occurring in technology, the channel can be really successful at being first to market with the latest platforms."

10. The Shift to Service

It's been said a jillion times before, but IT services are where the opportunities are for VARs. Two developments will make vendors and VARs pay even more attention to managed services in the coming year, said panelists. The first is the burgeoning ecosystem of OEMs, software developers and MSPs that's growing around Intel's vPro and Centrino Pro platforms. Expect rival chipmakers to make their own moves in this growing space in 2008. The second is the realization by the industry that today's small businesses have IT needs that simply aren't being met -- and piles of untapped dollars waiting to be spent on the right service offering. For VARs adrift on the enterprise sea, SMBs look like giant, cartoon pork chops.

With the commoditization of hardware, not to mention the rise of virtualization and other power-saving technologies that bite into sales volumes, pure product reselling has never been tougher. Get on board the services train before it leaves the station, said panelists.

"The reason we've been successful is a perfect storm of technology coming together with vPro and other tool sets becoming so robust," said Michael Drake, CEO of Master IT. "You've got the ubiquity of the Internet, so businesses need to have non-stop uptime. And now you see the CEO's or the business owner's willingness to let go of IT, because we [MSPs] have matured enough as a juvenile industry to show them the money."

Toste said Intel is "doing cool stuff with vPro and Microsoft. Nobody can say Intel's not helping you. They want to help system builders extend their product mix with managed services. So should system builders move into managed services? Well, you can partner with somebody, but you'd better have some kind of break-fix component of your own."

Intel's Dallman, too, sees the shift to services. "Even the system builders are saying, 'Maybe I should buy a done mobile unit and provide services to my customer. The channel is probably touching or shipping as many systems as they've ever shipped, and anywhere they're not building, they're touching with managed services."

Added AMD's Moorhead: "The highest value-add when you're a custom system builder is configurations where people are looking for choice, like hard drives, memory and special skins. The custom guys don't go after lowland desktops anymore. With more commodity-level notebooks, channel guys will take in a branded notebook and wrap the services around that to make a profitable business."