Cloud companies adopt AMD’s EPYC
Advanced Micro Devices (AMD) developed an EPYC server CPU (central processing unit) that offered a better price-to-performance ratio than Intel’s (INTC) Xeon server CPUs. The next step for AMD was to get the market to adopt its EPYC platform. Thus, it targeted cloud companies, as they easily adopt new platforms and they order in bulk, as they have large data centers.
AMD achieved success in deploying its EPYC with Chinese (FXI) cloud companies like Baidu (BIDU) and Tencent and other cloud providers like Microsoft (MSFT) Azure, Hivelocity, and Packet. EPYC also got adopted in the supercomputing and high computing market. This adoption by cloud and supercomputers doubled EPYC’s sales sequentially in Q1 2018.
EPYC’s adoption by enterprises
The next step for AMD is to get EPYC inside enterprises, which could be difficult, as many have a lengthy qualification cycle and are loyal to Intel. Moreover, AMD has to win back the trust it broke in 2012 when it withdrew from the server CPU market.
During the fiscal Q1 2018 earnings call, AMD’s CEO Lisa Su stated that it aims to achieve a mid-single-digit market share of the server CPU market by the end of 2018. This target looks achievable given the strong adoption of EPYC by server OEMs (original equipment manufacturers) and cloud companies.
This statement was further strengthened when Nomura Instinet analyst Romit Shah stated that Intel’s former CEO Brian Krzanich told him that Intel would lose some server market share to AMD in H2 2018, according to a CNBC article. Next, we’ll see what this means to AMD.
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