AMD Launches 64-Bit Opteron Server Processor

Strategy could be ‘make or break’ for the No. 2 chip maker

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Think AMD and you think perennial underdog. During the years, the company has enjoyed marginal success in the consumer desktop chip market despite tripping itself up with a raft of public missteps, late-to-the-game product releases and quarterly losses. It has nipped at Intel's heels just enough to pester but not pose an outright threat. Well, this week the underdog went on the attack in a big way.

AMD launched its 64-bit Opteron server processor with a ferocity and fanfare not seen often from the No. 2 chip player. Its well-attended Manhattan event oozed pep rally-like enthusiasm and sported an impressive array of supporting partners, including the likes of IBM, Microsoft, Oracle and Veritas. Even NBC sports personality Bob Costas joined in the festivities, bantering on stage with AMD president and CEO Hector Ruiz about his favorite sports performances and other signature moments in history.

A lot is at stake for AMD. The company reported another quarterly loss last week, to the tune of $146 million on revenue of $715 million during the first quarter, while Intel posted a modest first-quarter profit, buoyed by its Centrino mobile platform launch. One financial analyst at the event Tuesday described AMD's 64-bit strategy as "make or break" for the company.

Ruiz says the company is up for the challenge, though recognizing it as a tough one. AMD's dive into 64-bit computing is its first serious foray into the enterprise server and workstation market. It also plans to roll out the second component of its "AMD 64" initiative -- the 64-bit version of the desktop Athlon processor -- this fall. AMD is entering the server world at the high end, a space now dominated by a cadre of RISC-based players such as Sun and HP. But it is not the proprietary RISC companies that AMD seeks to compete with. AMD executives have one target in mind and that's Intel, whose own 64-bit Itanium 2 processor has been on the market for about two years now, but so far has languished as enterprises approach the migration from 32-bit to 64-bit computing with trepidation.

AMD executives believe that they will fare better in the market for two primary reasons: price performance and backward compatibility. Opteron pricing is less than half that of its Itanium rival: The 200 Series two-way Opteron models 240, 242 and 244, available now, are priced between $283 and $794 in quantities of 1,000. The 100 Series (one-way CPUs) and 800 Series (up to eight-way CPUs) are due out in Q3 and later this quarter, respectively, with pricing to be determined. To hammer home the point about pricing, Jerry Sanders, AMD's colorful founder and chairman, said that systems vendors will be able to offer a four-way Opteron server priced below $10,000. Their were audible awes in at the launch event Tuesday.

As for backward compatibility, Opteron, unlike Intel's Itanium, is able to process both newer 64-bit applications and their 32-bit cousins, which, by far, comprise the mass of software in use today. By offering customers the coupling of price and 32-bit value propositions, AMD says it avoids "Intel-like" bullying of customers into a 64-bit upgrade, rather letting them leverage their existing investments in applications.

"It's a technological tour de force," Sanders boasted. "AMD 64 is the next evolution of the x86 platform and instruction set that lets the customer decide when and how 64-bit systems will be deployed."

'Inevitable' Transition

Sanders and Ruiz called the transition to 64-bit computing inevitable, particularly as data volumes continue to grow at record pace led by applications such as CRM, and also as users demand faster access and processing of information. Other applications that cry out for 64-bit include scientific and other high-performance computing programs such as genome research, oil exploration apps, financial services and trading, drug discovery, and digital rendering for the entertainment industry. High-speed gaming is expected to provide an ample market for 64-bit on the desktop.

On the partner front, IBM said it will support the Opteron chip is a forthcoming server, running Linux, and will include Opteron systems as part of Big Blue's supercomputer on-demand data center initiative. Meanwhile, its DB2 database has also been optimized for Opteron on both Windows and Linux, according to Bob Picciano, director of DB2 database technology at IBM Canada.

"My guys were able to port DB2 to 64-bit Opteron in two days, which blew me away," Picciano told the crowd, underscoring that feat by reminding everyone that DB2 is made up of 10 million lines of code.

Microsoft is tooling the forthcoming Windows Server 2003 for Opteron, lured by the processor's ability to handle all those 32-bit Windows applications in circulation. The support for AMD comes as a bit of a sting for Intel, to whom Microsoft has not yet committed full Itanium support.

To aid Opteron-based systems builders, AMD is rolling out its Validated Server Program. A joint venture with ODM Celestica, the program gives systems builders the option of buying servers and workstations in various states of undress -- or fully configured -- depending on their wants and needs. This will get them to market faster, according to AMD executives.

It remains to be seen how well AMD can execute and if there's any chance to make headway against the Intel juggernaut and the economy. One systems builder and AMD partner at Tuesday's event had nothing but praise for AMD's 64-bit strategy. Lalit Jain, CEO of high-end blade server company Angstrom Microsystems, said he transitioned his company away from Intel to AMD in 2001, convinced that the latter was on the right track for the high-end performance computing at the right price. And the 32-bit/64-bit compatibility is a huge value, he says.

"In the days when we moved from 16-bit to 32-bit applications, it took years of running both before we completely moved over," Jain says. "Now Intel says that we have to migrate everything at once to Itanium. It just doesn't work that way. AMD gets that."

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