Recently, I was reviewing a text on military strategy. One of the test questions that followed was on how to fight a foe with a superior army. The answer was using guerrilla tactics, which is basically where you use your limited resources to target high-value enemy positions. You see, while a smaller force can’t go head-to-head with a bigger army, it can create point advantages by being far more focused.
This is what AMD is doing with Epyc, its server processor line base on Zen microarchitecture. The company is looking for point solutions where the technology really shines and then resourcing them to a level where success is assured. AMD CEO Lisa Su has proven herself to be one of the leading tacticians in the space. AMD's latest win with Microsoft Azure showcases the success of this strategy and approach. And the processor manufacturer now has a beachhead that can be used to penetrate other cloud providers (so I’d expect additional announcements like this in AMD’s future).
Epyc Is Truly Epyc
Both AMD's Ryzen high-performing gaming processor and Epyc broke the mold that AMD had been forced to fit into for much of its existence, that of a low-cost, relatively low-performing, alternative to Intel. Ryzen and Epyc were competitive with Intel’s best, largely because Intel treated both the PC and server segments as cash cows and focused on emerging markets like mobile, autonomous cars and drones instead. This allowed AMD to ramp its own efforts in secret, resulting in Ryzen and Epyc parts targeting PCs and servers, respectively, and surprising Intel back into developing a more competitive response.
Granted, as the entrenched vendor, Intel controls a great deal of the ecosystem, so AMD still struggled with design wins. But the firm has focused tightly on low-hanging fruit opportunities, and the Azure win is the latest outcome.
Azure: Future of Microsoft
What makes Azure interesting is not only that it is the baby of Satya Nadella, Microsoft’s current CEO, but also that it likely represents the future of Microsoft. This is a future that Intel was tied very closely to in the past. Now both AMD and Qualcomm are moving on this opportunity, most recently even teaming up to go after it, albeit in "always connected" laptops, not servers. But these always connected laptops will need to connect with a robust back end, and it would make sense for AMD to provide that capability with Epyc.
The initial Azure Epyc implementation is targeting very high performance virtual servers which can be provisioned on the fly. This is Azure's L-Series of high-preforming virtual machine servers. They take advantage of Epyc’s very high core count and powerful performance numbers to provide a leading performance solution in the cloud computing space.
Because Azure is so critical to Microsoft now and so tied to its CEO, hardware choices are likely far more deeply vetted than they otherwise would be, making this early AMD win even more interesting. If it pans out, and given AMD's prior win on HPE’s own DL385 high performance server, it will tie the two companies, AMD and Microsoft, far more closely together and potentially result in even more joint projects.
I should note that AMD also provided the technology in Microsoft’s Xbox, and that has proven an enormous success for the platform. Also this week, it, along with Microsoft and a host of OEMs, announced support for Microsoft’s always connected PC, also suggesting a far stronger future relationship between the firms.
I must tip my hat to Lisa Su for executing this fascinating strategy. Her predecessors seemed to want to take Intel on head on, which never works with a far more powerful firm. Instead Lisa has stood out by using guerrilla tactics and focusing on important markets that Intel either has pulled focus from or is inadequately supporting. AMD has made significant gains as a result.
This Azure win, at the other edge of the performance spectrum from where AMD is expected to be competitive, is a powerful beachhead into high-performance computing. And where Microsoft Azure goes, AWS, Google, and a lot of other major cloud service providers are likely to follow. It just showcases that with the right CEO and the right strategy, AMD is a far more powerful player than folks gave it credit for.
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