LAS VEGAS -- What a difference a year makes. One year ago, Advanced Micro Devices President and Chief Executive Officer Hector Ruiz stood on stage at Comdex with former Guns 'N Roses lead guitarist Slash, exhorting the technology industry to prepare for his company's new hybrid processor technology that combined 32-bit and 64-bit capabilities.
At the time, AMD's financial picture was clouded with layoffs and financing efforts, and many industry analysts and observers were skeptical about AMD's ability to introduce the chips on time and to generate interest among technology buyers.
One year later, Ruiz joined Sun Microsystems Chair, President and Chief Executive Officer Scott McNealy on stage at Comdex to tout the company's largest victory to date for its AMD64 technology: a commitment from Sun to use Opteron in a wide range of low-end servers and to collaborate on future technology development.
Gaining Momentum
The momentum behind AMD and the Opteron processor is at its strongest point as the year winds down, as the combination of Sun's Solaris operating system and Opteron will give users an interesting choice when deciding what type of low-end server to buy, executives and analysts say.
Sun once dominated the server market with systems based on its Sparc processors and Solaris operating system, but the company has been losing ground to servers from Dell, Hewlett-Packard, and IBM that use less expensive processors from Intel and either Microsoft's Windows operating system or Linux.
However, many corporations are still running important back-office applications on Solaris. The ability to run a complete Solaris environment across all their servers will be very attractive to Sun's existing customers, said Souheil Saliba, vice president of marketing and strategy for Sun's volume systems products group, at a conference for analysts and the press at Sun's Burlington, Massachusetts, offices this week.
And for customers who need an operating system on their low-end servers that goes beyond the capabilities of Windows or Linux, the option to purchase a low-cost server with an "industrial strength version of Unix" will help drive new customers to Sun, said Kevin Krewell, senior editor of the Microprocessor Report in San Jose, California.
Product Plans
The first Sun Opteron servers will be two-way and four-way servers, and will appear in the first quarter of 2004, Saliba said. The company has plans to bring Opteron to a complete line of products, from workstations to servers with eight or more processors, and has developed road maps that look out three to five years, he said.
A full production version of Solaris for the AMD64 instruction set is expected around the middle of next year, said John Loiacono, Sun's vice president of operating platforms, at the event on Wednesday. Until then, Sun will offer either SuSE Linux or Red Hat's version of Linux that have been ported to AMD64, which adds 64-bit extensions to the 32-bit x86 instruction set that runs most of AMD's and Intel's processors.
Sun's backing now gives AMD the support of two of the four major U.S. server vendors, with IBM announcing its support at the Opteron launch event last April. IBM's EServer 325 has been targeted at the scientific and high-performance computing community, while Sun's upcoming servers will give AMD a toehold in the large enterprise server rooms from which it has been mostly shut out thus far, said Dirk Meyer, senior vice president of AMD's computation products group.
For the moment, Sun will continue to sell its Sun Fire servers based on Intel's Xeon processors because certain customers are more familiar with Intel's technology, and a version of Windows for Opteron is not expected until next year, Saliba said. But if the Opteron servers can offer equal or greater performance than the Xeon servers at an equal or lower cost, Sun will have to look at standardizing its x86 servers on that chip, he said.
Shifting Its Attention
Now that AMD has secured the backing of two prominent server vendors, the company's attention shifts to Dell and HP. Neither company is likely to build Opteron servers any time soon, since each company would need the Opteron version of Windows to sell enough units to make their participation worthwhile, said Nathan Brookwood, analyst with Insight64.
HP's situation is further confused by its strong partnership with Intel in designing and marketing the 64-bit Itanium 2 processor, and its relationship with AMD in selling Athlon 64 and Athlon XP desktop and notebooks, Brookwood said.
Both AMD and Sun hope their partnership can right their struggling ships. Both companies are unprofitable despite severe cost cutting and the beginnings of a turnaround in hardware demand, and need new sources of revenue.
In many ways, Sun and AMD's partnership is an ideal coupling, Krewell said. Neither company is especially friendly with Intel, which has strong relationships with Sun's competitors and processors that compete against AMD in PCs and Sun in high-end servers, he said.
"I'm not sure who said it, but the phrase 'the enemy of my enemy is my friend' certainly applies here," Krewell said.
For more Comdex news, check PCWorld.com's ongoing coverage of the trade show.
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