Server Processors in 2020

Every time you log into Facebook or search for something on Google, you access servers. Servers are remote computer systems that “serve” information of services to other computer systems. Years ago these servers used completely different technology than the computer on your desk. However, like all things, technology has changed.

Servers used to be room-sized computers running specialized processors for rapid data access. These mainframes used a parallel memory access system and contained multiple linked processors in a single system to allow the server to talk to many computer terminals at the same time. As technology has advanced even the processor in your cellular phone has the same capabilities as the mainframes from 30 years ago. Yes, your phone is a computer.

What this means is that it is possible for every computer to run the same type of processor today. You might ask how this affects the companies that design and build both servers and processors. Interestingly, it keeps the competition very exciting. In the last couple of years the landscape of server technology business has changed dramatically.

The big players like IBM and Intel are, of course, still in the game and still control most server platforms, but there are a couple of lesser known giants in the game. Among them is AMD, which in the last two years made a major comeback to control 40 percent of the server processor market. Merely a year ago they only controlled 12 percent, and two years ago it was less than five percent.

How does a smaller company like AMD take on giants like IBM and Intel to create a landslide victory in just a year? There are three factors that play a major role in selecting a server processor: price, performance, and availability. Two years ago, AMD released a new processor that was about 40 percent better performing and 20 percent cheaper than anything Intel had available. The demand for this new processor quickly began to outpace the supply and AMD’s market share suffered from a supply and demand issue. The landfall sales of 2018 allowed AMD to ramp up production and as a result take over a large portion of the processor market.

I mentioned three factors above and there is another player in the market that sells more processors than all the other designers combined. This player is the developer of an open standard for microprocessors called ARM. What makes ARM unique is that any manufacturer can take an ARM design, extend it to embed their own components and build their own unique processors. Today ARM processors completely dominate the overall processor market with over 100 billion processors produced and sold annually.

ARM is a low power consumption processor with a simpler instruction set and a similar computing power level of lower end Intel and AMD processors. They are primarily used in cell phones, tablets, watches, calculators, and other small electronic devices. However, there has recently been a strong push to build ARM based servers for general computing. The price of ARM processors is lower, power consumption is lower, and performance is similar to the top selling Intel and AMD processors, but the difference is their instruction sets limit their capabilities, which causes some headaches to software vendors in the adoption of the technology.

There are many market analysts that say ARM is the future of server processor technologies, and I confirm their belief especially with the latest announcement from Amazon. Amazon has recently announced not only the availability of new ARM processors in their cloud service, but a shift to using their own ARM processor as the default for the service. Amazon’s Graviton Processors now run a majority of their web services workloads at a fraction of the cost, and Amazon is passing the savings on to their customers. ARM has all three factors rooting for it: price, performance and availability, to become the top processors in the coming decade.

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