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Advanced Micro Devices has gone from an afterthought among server customers to the darling of the enterprise world in just a year. The company's Opteron chip has opened the doors of corporate server rooms for AMD, and many enterprises are flirting with the new kid on the block.

Intel has dominated that block for years, with over 90 percent of the market for IA-32 servers. But Opteron has become an alternative to Intel on IT managers' shopping lists.

Opteron shipments have doubled each quarter since the product was launched, according to research firm IDC. However, with just 35,000 Opteron servers shipping in 2003, Opteron still represents a tiny fraction of the entire 3.26 million-unit IA-32 server market.

64 Bits

By not breaking binary compatibility with the millions of existing IA-32 applications, Opteron has given customers a less painful route to 64-bit computing than the one provided by Intel's Itanium 2 processor. AMD's hardware is also uniquely positioned to take advantage of the move toward clustered applications.

Software vendors like Oracle, IBM, and SAP have been working to make their applications work with clusters of low-cost systems.

Enterprise users are beginning to show interest in Opteron for these types of applications because of its low cost, as well as its strong I/O capability and 64-bit processing capabilities, says Dave Driggers, chief executive officer of Verari Systems in San Diego.

Driggers, whose company sells AMD and Intel cluster systems, says Opteron systems represented about 20 percent of his company's business in 2003. That number has jumped to 40 percent in the first quarter of 2004, he says. "Opteron has gained quite a bit of market share within our company," he says. "There's heavy interest for databases, for file servers, and [for] traditional enterprise products," he says.

Change of Heart

Spam filtering company Postini, in Redwood City, California, purchased 32 of those Opteron systems to run database cache servers. Jon Prall, the company's vice president of operations, says the fact that a white-box dual-processor Opteron was able to outperform a much more expensive four-processor Sun Microsystems 480 system turned him into a believer.

"The Opteron is truly an amazing chip," he says. "It's completely changed my perception of AMD."

Changing the perception of customers like Prall is what AMD must do if Opteron is to become a serious competitor to Intel's Xeon.

"I think the biggest challenge for Opteron is getting into the mindset of the enterprise that they are an enterprise player," says Verari's Driggers. "They've always been considered the generic Intel product."

More to Come

By the end of the year, AMD hopes to extend its toehold in the enterprise to include four-way servers. Currently, most Opteron servers are one-way or two-way systems clustered together for greater performance.

As part of the Opteron anniversary, Hewlett-Packard will unveil its first four-way Opteron system: the Opteron DL585, which will be priced starting at $8299.

The multiple Hypertransport links on each 800 series Opteron processor allows system builders to link the chips directly together, cutting down on latency caused on other interconnects, says Ben Williams, director of AMD's server/workstation business segment.

Customers running four-way or eight-way servers from other RISC (reduced instruction set computing) vendors can switch to two-way or four-way Opteron servers, and not only cut their hardware costs but reduce their software costs in per-processor pricing configurations, Williams says.

"The price per processor [on an 8-processor machine] is four to five times that of the price on four-way," says Postini's Prall. "So right there is a huge motivation to use small boxes," he says.

Weathering the Load

Weather.com Vice President of Technology Dan Agronow did just that when he purchased eight two-way servers from IBM in the fourth quarter of 2003 to replace five four-way IBM servers with Intel's 900-MHz Xeon MP processor.

Agronow needs only six of the Opteron servers to replace the four-way servers, keeping two Opteron servers as a backup. He has seen a 25 percent increase in the number of concurrent queries his database can handle without any impact on performance, he says. Weather.com is the online site for The Weather Channel, based in Atlanta.

"[Opteron's] price/performance made a huge difference. The price point for the two-ways are just fantastic," he says. "They've been rock solid."

Opteron's most visible success story has come from AMD itself. The company has now been profitable for two straight quarters following nine straight quarters of losses.

"AMD is viewed as a credible tier-one server processor supplier, which certainly wasn't the case a year ago," says Dean McCarron, principal analyst with Mercury Research in Cave Creek, Arizona.