Is Intel Losing Cachet?

Intel may continue to dominate the desktop, but AMD would have a hard time claiming that its larger rival is stifling its growth in the x86 server market.

According to a survey of more than 2,000 corporate customers conducted by San Antonio-based Rackspace Managed Hosting, customers are clearly placing less emphasis on the Intel brand as evidenced by the meteoric growth of AMD's 64-bit Opteron processors. The survey reveals 65 percent are not willing to pay a premium for servers with Intel processors, while only 25 percent are willing to pay more than 10 percent over other options.

"This survey tells us that the premium is very low, if any, for the Intel name," says Paul Froutan, Rackspace's vice president of product engineering, pointing out that survey respondents were evenly split between customers with AMD and Intel-based servers.

Other recently published market-share data also confirms that Opteron is gaining momentum in the x86 server market. Gartner's most recent Server Tracker report reveals that servers based on AMD processors now account for 16.4 percent of domestic x86 CPU shipments and 15.7 percent of revenue. AMD's growth in the x86 server market is most pronounced with four-way systems, where it now has 31.6 percent share of revenue and 38 percent of overall shipments.

"Opteron is kicking butt," said Scott McNealy, Sun's chairman and CEO, at last month's launch of Sun's next-generation Sparc servers, code-named Niagra.

Paul Miller, Hewlett-Packard's vice president of industry-standard servers and blade systems, says he's not surprised by AMD's continued growth. "Customers are no longer saying, 'Why AMD?' but, 'Why not AMD?'" he says.