Intel fights back

Chip giant Intel brushed off disappointing financial results and pressure from AMD with a rallying call at its developers forum in Cairo last month

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By  Dylan Bowman Published  June 11, 2006

|~|IDFGraylishbody.jpg|~| Gordon Graylish stressed the importance of virtualisation. |~|The battle between Intel and arch rival AMD has been elevated to the level of a heavyweight title fight in the last few months as the pair punch it out for control of the processor market. Reigning champion Intel has taken a bit of a pounding of late with poor financial results in the first quarter of this year — attributed by analysts to AMD’s increased presence in the market — and the announcement that Dell will start using its rival’s chips by the end of the year. But Intel hit back at the end of last month at the Intel Developer Forum (IDF) in Cairo, Egypt, with the unveiling of performance results from processors based on its new Core microarchitecture that Intel claimed show significant improvements on the chipmaker’s previous generation of chips — and the best AMD has to offer. The chipmaker reported Fujitsu Siemens, HP and IBM all broke records performance records using Intel’s new chips in their servers. Intel came to this year’s IDF results in hand and rammed home the message that the next-generation of its processors were the only chips vendors should be considering for their hardware. The company’s EMEA sales and marketing group vice president Gordon Graylish led the way with this message, brushing off any suggestion that AMD’s performance had any affect on its recent financial wows and beating the drum for Intel’s new platforms and processors. Creating chips with lower power and increased performance is at the heart of Intel’s new microarchitecture. How did this come about? This came out about a year ago in our restructuring of the company towards platforms, but actually from an engineering point of view we started in 2000 looking at what it was people wanted. We saw a pretty linear graph that said power and performance was going to go up in the same relation, which was not a good thing. What we got back from both consumers and IT professionals was they wanted lower power, they wanted quieter computers, they wanted more manageability, and they wanted better security. There were a bunch of capabilities that they wanted, so we changed our design methodology and the net result of that is the core microarchitecture. What are the benefits for customers of these new processors Intel has introduced? The microarchitecture basically is dramatically lower in power while at the same time being higher in performance. And we do that through a number of innovations around being able to turn off parts of the device when it is not being used and having a much more efficient cache system so that you have to go out to memory much less often. The net result of that gives you in the desktop 40% higher performance at 40% lower power and in the server its 80% higher performance at 20% lower power, and in the notebook it was either higher performance or lower power. What other benefits are there for the business sector? We have just announced the brand name for our corporate desktop: vPro. In the business client, the cost of the client is a small percent of the cost of managing and owning that client and so this is where we have been focusing a lot of energy. A simple example with vPro is that if you get a virus two things can happen. One is the system will recognise it has a virus because it is not normal, let us say, to send a million e-mails in a minute. It will see that behaviour is not normal and shut the infected area down. Another example is if you have a system that has corrupted its disk drive or its OS has gone. Even if it is turned off you can immediately access it, update and reload the OS, clean out the virus and get it back up and running. And this all happens in the background so there is no loss of productivity. I think these are real user benefits. Other benefits are enhanced reliability and the ability to use virtualisation to, for example, create a supervisory partition or an instance on that machine that can be very quickly restored, and dramatically lower cost of administration. Intel is doing a lot of work in the virtualisation space. How important is virtualisation to the IT industry? I believe its importance to the industry is enormous. If I can increase your utilisation by double or triple and increase your availability and reliability, name any other technology that can do that. I think it is hard to find something in the enterprise space that has had such profound an impact, maybe the internet. It is the kind of thing that comes around every ten years, not every six months. What impact will these new processors have on Intel’s strategy for the region? They are part of our ongoing efforts. We are engaged with over 10,000 integrators in the Middle East on building businesses, integrating computer systems and so on. This gives them a better platform to do it on. So from that point of view it means we remain extremely competitive and are delivering real benefits to people. What we are doing regionally is we have a product development centre in Cairo, which is specifically focused on the needs of the region from a system level and a solution level. What are your sales projections for these processors over the next few years? I think all I could say is you can expect a rapid transition to the new processors. I’ll give you a couple of data points on our existing transition. We announced 65nm product at the beginning of this year. We will ship more 65nm products in Q3 than 90nm. We’ll ship more multi-core products in Q3 than single core. So that tells you how fast our transition is. I think you can expect a rapid transition to the new core microarchitecture because it offers so many advantages. How has your strategy been affected by the rise of AMD in the processor market? Our strategy is driven by pretty strong belief that the first thing we need to do is create an environment for growth in the region. Having competition is something we have always had since the year dot, so that just means come up with good products. We are very confident that our products are clearly superior. We’ve got the right products. AMD told IT Weekly in an interview a couple of months ago that the company was seriously looking to gain market share in the Middle East. Is Intel worried? Does it worry us? We live in a competitive world and we believe the right response to competition is to come out with good products. We are very comfortable we have the right products to compete — and we are quite happy to do so — but at the end it is about delivering the goods, and that is the highest performance and the lowest power. It is a lot more complicated that this business used to be. This business used to be about building chips. Frankly I think that we have shown it is much more about delivering solutions and platforms and working with our partners. Gartner recently said Intel’s poor financial results in Q1 was a result of AMD’s growing presence. Do you agree or disagree with this and why? I think we were pretty clear that we saw this as mostly an issue of demand for a number of macroeconomic reasons. We did not see changes in share during the first quarter. Can you comment on the current lawsuit going on in the US between Intel and AMD? I have to give you the standard answer of we don’t comment, but I’ll add that we obviously cooperate and we are a highly ethical company that ensures that all of our people follow those ethical guidelines and we are confident that we act within the law to ensure that we compete fairly. That has been our approach and I think we will be vindicated. What do you think of Dell’s decision to start using AMD processors? I would say we were clearly disappointed they made that choice, but again we live in a competitive world and they made that decision. Our job is to show them that they can be more successful using our chips. This is one area of their product line, we still work with them in all the other areas of their product lines. What impact is Intel’s annou ncement that it is to slash US$1 billion from its spending for this year and undertake a cost cutting review going to have on the Middle East region? I don’t know if it does. What we announced is we would look at everything we do. We do this every year within groups, what this is about is looking across groups and saying lets look at everything Intel does to ensure we have the right structure, process and so on, that we are in the right businesses, and so on. So I don’t know we can predict what will come out at the end of that. I think it is a great opportunity for us as a company, and it shows leadership to go ahead and to do this and to do it so publicly. Every company should do this. Will this mean job cuts in the region or a scaling back of Intel’s presence in the region? We have no targets associated with this, but again we have got to go through the process to see what we are going to do.||**||

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