Partners: Intel's Xeon Grantley Chip Will Be Big Revenue Driver

Intel Monday plans to officially unveil its Xeon Grantley processor, a beefy CPU platform that partners say will drive new sales and help them crack open new software-defined server deals.

The new Xeon E5 v3 processor, based on the Haswell CPU architecture, will boast up to 14 cores at launch and will jump to a whopping 18 cores in 2015.

Nick Gold, director of business development at Chesapeake Systems, a Baltimore, Md.-based system builder that counts some of the U.S.'s largest media companies as customers, has high praise for the Xeon E5. "What Intel is delivering is practically the stuff of sci-fi. Eighteen cores per CPU? That allows us to deliver a 1U rack with 36 actual processor cores. With hyper-threading, that will act like 72 cores."

Intel plans to debut the Xeon Grantley CPU family at a press event in San Francisco Monday, one day ahead of its Intel Developers Forum, which will be hosted just down the road at the Moscone Center. The Xeon Grantley E5 v3 CPU offers a reported 3X speed boost while consuming less power. It also will support lightning-fast DDR4 memory and comes with new baked-in monitoring support for virtualized server environments that allow system administrators to monitor discrete functions driven by the processor, such as virtualized networking and storage tasks.

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The Grantley platform CPUs reportedly will range from $230 up to $3,000 for 14-core Haswell CPUs with single-digit-percentage price increases.

With Intel releasing its first 18-core CPU, Gold said, the latest Xeon is a definite head-turner for Chesapeake Systems' customers that demand horsepower for media-centric tasks such as processing and transcoding terabytes of video. "So many of the tasks in the media space take advantage of CPUs. The more cores the better. Our customers are willing to pay a premium for better core counts. Intel's new Xeon is going help Chesapeake close out the year on a high note."

"Unlike the commodity PC market, the server market is still where people are willing to pay more for performance. With the new Xeon's benchmarking at three times faster than last year's model, Intel has a compelling story," said Nathan Brookwood, principal analyst at Insight 64.

Brookwood said the new Xeon family of CPUs will have more than a dozen processor SKUs each tailored for specific workloads ranging from storage, networking, hyperscale and traditional data center. "This is Intel telling its customers 'have it your way' instead of saying 'have it our way,' " Brookwood said.

Intel, Brookwood said, is taking the software-defined server market by the horns. "The increased role of software in server deployment for converged infrastructure and software-defined everything is creating new opportunities for Intel."

The global software-defined market -- including physical network infrastructure, controller and network virtualization software, SDN network security services, and SDN-related professional services -- is set to grow from $960 million in 2014 to more than $8 billion by 2018, research firm IDC reported last month.

To that end, Intel will customize chips for customers such as NetApp and EMC and offer others SKUs optimized for networking infrastructure that will go into servers built by IBM, Cisco Systems and Juniper Networks. Also expected Monday are server releases from major OEMs such as Hewlett-Packard, Cisco, IBM and Dell.

"Despite a downward trend in server ASP [average selling price], unit shipments continue to grow. The server market continues to broaden for Intel. Those opportunities are not the same-old, plain-old-vanilla servers in the data center. Today Intel is chasing after new markets like hyperconverged and software-defined and hyperscale," Brookwood said.

IDC reported last week that worldwide server revenue increased 2.5 percent since the same time last year to $12.6 billion in the second quarter of 2014. IDC estimated server unit shipments increased 1.2 percent year over year to 2.2 million.

Intel and OEM partners say the chip maker is catching up with what companies want to do in the data center. "Sure, our customers want more horsepower for more density-optimized compute power," said Jeremy Wilkinson, CTO of UltraLevel, a Southfield, Mich.-based Dell partner. "But what Intel brings to the equation with Grantley is hardware that is catching up to what Dell and our customers want to do in the data center," he said.

Todd Swank, senior director of product marketing at Equus Computer Systems, a Minneapolis-based system builder, said Intel's latest Xeon processor will drive key end-of-the year sales as customers will open up their wallets after holding off until new Intel chips hit the market.

"We are deep into our evaluation period," Swank said. "Starting next week we'll have systems ready to ship and a series of webinars with customers very interested in making a move with Grantley."