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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: gnuman who wrote (52987)	3/21/1999 4:28:00 PM
From: A. A. LaFountain III	Read Replies (2) \| Respond to of 1583505

Re: X86 server market I got your message during the weekend and am about to head out to the Valley early Monday until Wednesday night. Rather than rely upon what's in my head, I'll get what I believe to be reliable data from my office when I return on Thursday. On a qualitative note: If you look at Intel's breakout of the X86 server market, there are four segments: basic value (P III), basic performance (Xeon), mid-range (2-4 way Xeon), and high end (8-way + Xeon). The caching approach of the K-6-III should enable it to play in the basic value segment, while the K-7 should be able to eventually play in the other three (the mid and high segments when the SSM chip set is ready in 2H99). I believe that the K-7 and the simultaneous switched matrix (SSM) chip set from Poseidon are likely to combine to seriously ding Intel's share of the X86 market. What I'm having a harder time coming to grips with is how much the X86 market will grow from the combination of server growth in general and a shift from proprietary RISC-based servers (i.e., SPARC, Alpha, etc.) to X86. For example, if the server market grows at 20% and share shift from SPARC/Alpha to X86 allows the X86 segment to grow at a 10% faster rate, then AMD could ship 100s of thousands of K-7s into this market and Intel would still grow much faster than the PC rate (+ or - 15% in units with noticeable price degradation) - unless Intel's response to AMD's entrance into the server market is to slash some of those 95% estimated margins on Xeon 1M/2M configurations. Then the prognosis for the market growth (in $) becomes similar to what has happened at the low end. This is what takes me aback about the more vociferous Intel supporters, because I don't see how this scenario can be summarily dismissed. Even if one is thoroughly convinced that Intel's massive profitability creates immeasurable strengths, can its growth rate be viewed as impervious to degradation due to competitive pressures? Looking at AMD's technical progress over the past four years is reminiscent of the Pinkertons in "Butch Cassidy" - who are these guys? and why can't they be shaken off the trail? - Tad LaFountain