Re: The biggest threat to Intel, IMO, is AMD's potential to drop the margins in 2-way servers, where at least the economies of scale still apply.
I agree with you here. Also with the implied criticism of AMD if it is putting a lot of scarce resources into 4-way and above servers.
No company has made money selling high end computer hardware for quite a few years. IBM and SUN have made money selling services and software for high end computer systems - the "blades" to the high end computer system's "razors."
Look at DEC/Compaq Alpha, HP PA-RISC, Intergraph MIPS, Data General, Sequent, etc., etc.
All brought down trying to compete with commodity high volume COTS hardware.
But in the low-midrange on down (topping out at dual processor systems), where unit sales are in the millions, and fixed costs can be allocated across all those units, it is possible to make money selling hardware.
Actually, one of the most frustrating things for both Intel and AMD has got to be they have to sell the low margin "razors", while Microsoft gets to sell the high margin "blades." |
