Earnings season is in full swingboth AMD and Intel announced 4th quarter (and annual) results recently. Both companies claimed strong quarters with robust growth. The following few paragraphs will attempt to dissect those numbers in a little more detail and provide some guidance on what these numbers say about the 2020 business outlook.
AMD EESC strong results, lots of EPYC activity
AMD quarterly results.
Trying to pull actual EPYC numbers from AMDs reporting is tricky as they are grouped with the companys embedded and semicustom businesses, which tend to be much higher volume and much lower margin.
At first glance, these numbers can seem a little mixed. Net revenue numbers look fairly flat to down across the board, while operating income looks pretty strong year over year. What this says to me is that the embedded and semi-custom business was soft, while EPYC continues to ramp in the enterprise. Consider this: Y/Y segment revenue was down 14%, while operating income was up 61%. And when looking at Q4 19 versus Q4 18, revenue was up only 7% while operating income rose 850%.
In addition to these numbers, AMD showed strength in building market momentum for EPYC with over 100 EPYC-based server platforms in market. Perhaps the strongest indicator of EPYCs momentum is this line from AMDs presentation: Dell (EMC) began shipping full portfolio of servers powered by EPYC processors Why is this so significant? One of Dell EMCs strengths is its pragmatism. Fully embracing AMD as a server silicon partner and having that manifest in a full suite of platforms is an indication that customers are asking again and again.
As difficult as it is to discern AMDs EPYC results for the past quarter, its near impossible to look at its 2020 guidance as an indicator for continued EPYC ramp. I can only go on what I hear from the industry. Demand continues to build in the enterprise market, and the addition of ex-Intel executive Dan McNamara should help in the go-to-market (GTM) drive. So expect to see EPYC continue to gain traction in the enterprise and for the numbers to (indirectly) reflect this growth.
A continued focus on building a strong channel presence is critical for EPYCs long term success. Channel programs are more than MDF and campaign budget. Its about the people, relationships and joint strategic planning that drive meaningful revenue and a run rate transactional business.
Intel DCG cloud growth is staggering enterprise and government down
Intel quarterly results.
Intels Data Center Group (DCG) had a killer quarter. Theres no other way to describe its performance after looking at the numbers. The company had a strong showing in platform (Xeon), and strong growth in adjacencies. The company saw especially strong growth in the cloud service provider (CSP) space, seeing a 48% YoY jump, accompanied by a healthy 14% growth in the comms space (no doubt buoyed by 5G rollouts).
In addition to this strong growth and record revenue, the company continued to ramp its 10nm part, codenamed Cascade Lake. Its important for the company to show a strong rollout with performance and power efficiency numbers that stand against AMDs 7nm Rome CPU. Its fending off arguably the stiffest competition it has ever faced in the datacenter.
Intels Q4 DCG numbers, along with the Q3, can indicate a couple of things. The server market contraction is reversing, and the cloud providers have resumed their buying trends. Secondly, the comms providers have resumed infrastructure acquisitions in support of 5G rollouts. And finally, the impact of cloud is being felt in the rollout of servers at enterprise and government. This trend is nothing new to anybody who has been following the server market, but the chart below clearly shows the correlation.
Intel DCG growth.
One question that pops out from looking at the above chart is whether Intel is facing pricing pressures from AMD. ASP has tracked strong relative to unit volume (UV) and has generally mapped to cloud and comms growth. However, Q4 showed a slight dip in ASP, while Cloud showed very strong growth alongside a healthy comms quarter. There could be a number of reasons for this. Still, it is an interesting break in the ASP trend given the fact that it follows the quarter in which AMDs Rome hit the market. Perhaps Intel is using pricing to hold off a competitive AMD? This could be especially interesting in the comms space, where Rome should be a good fit without the customizations required by the large cloud providers. Regardless, Intels numbers look impressive and its guidance for DCG in 2020 is high single digit growth.
What does all of this say?
While Xeon obviously had a strong quarter, digging into the numbers shows that EPYC also had a solid quarter of growth. Further, the partnerships and activities that help build a solid run rate business seem to be there for AMD, as demonstrated by Dell EMCs strong EPYC portfolio.
For those looking for spikes in AMDs EESC numbers as evidence of EPYC ramp, be patient. Pardon the pun, but Rome was not built in a day. The qualification and deployment cycle of servers in the enterprise market is slow. It will take another quarter or two to see the strength of EPYCs ramp, and that will be seen through the numbers and announced wins.
Expect to see Intels continued growth in cloud and for it to find new opportunities as the AI space begins to heat up. Additionally, Cascade Lake should bolster the companys prospects for the year. Also, watch for continued EPYC growth in 2020. Methinks AMD may be a little conservative in its guidance.
Disclosure:Moor Insights & Strategy, like all research and analyst firms, provides or has provided research, analysis, advising and/or consulting to many high-tech companies in the industry, including AMD and Intel.The author does not have any investment positions in any of the companies named in this article.
Here is the original post:
What AMD And Intel Quarterly Numbers Say About Datacenter Business - Forbes
- Setting up a Virtual Server on Ninefold - Video [Last Updated On: February 26th, 2012] [Originally Added On: February 26th, 2012]
- ScaleXtreme Automates Cloud-Based Patch Management For Virtual, Physical Servers [Last Updated On: February 28th, 2012] [Originally Added On: February 28th, 2012]
- Secure Cloud Computing Software manages IT resources. [Last Updated On: February 28th, 2012] [Originally Added On: February 28th, 2012]
- Dell unveils new servers, says not a PC company [Last Updated On: February 28th, 2012] [Originally Added On: February 28th, 2012]
- Wyse to Launch Client Infrastructure Management Software as a Service, Enabling Simple and Secure Management of Any ... [Last Updated On: February 28th, 2012] [Originally Added On: February 28th, 2012]
- As the App Culture Builds, Dell Accelerates its Shift to Services with New Line of Servers, Flash Capabilities [Last Updated On: February 28th, 2012] [Originally Added On: February 28th, 2012]
- Terraria - Cloud In A Ballon - Video [Last Updated On: February 28th, 2012] [Originally Added On: February 28th, 2012]
- Ethernet Alliance Interoperability Demo Showcases High-Speed Cloud Connections [Last Updated On: February 28th, 2012] [Originally Added On: February 28th, 2012]
- RSA and Zscaler Teaming Up to Deliver Trusted Access for Cloud Computing [Last Updated On: February 28th, 2012] [Originally Added On: February 28th, 2012]
- [NEC Report from MWC2012] NEC-Cloud-Marketplace - Video [Last Updated On: February 28th, 2012] [Originally Added On: February 28th, 2012]
- IBM SmartCloud Virtualized Server Recovery - Video [Last Updated On: February 28th, 2012] [Originally Added On: February 28th, 2012]
- BeyondTrust Launches PowerBroker Servers Windows Edition [Last Updated On: February 29th, 2012] [Originally Added On: February 29th, 2012]
- Ericsson joins OpenStack cloud infrastructure community [Last Updated On: February 29th, 2012] [Originally Added On: February 29th, 2012]
- ScaleXtreme Cloud-Based Patch Management Open for New Customers [Last Updated On: March 1st, 2012] [Originally Added On: March 1st, 2012]
- RootAxcess - Getting Started - Video [Last Updated On: March 1st, 2012] [Originally Added On: March 1st, 2012]
- How to Create a Terraria Server 1.1.2 (All Links Provided) - Video [Last Updated On: March 1st, 2012] [Originally Added On: March 1st, 2012]
- Dell #1 in Hyperscale Servers (Steve Cumings) - Video [Last Updated On: March 1st, 2012] [Originally Added On: March 1st, 2012]
- Managing SAP on Power Systems with Cloud technologies delivers superior IT economics - Video [Last Updated On: March 1st, 2012] [Originally Added On: March 1st, 2012]
- AMD Acquires Cloud Server Maker SeaMicro for $334M USD [Last Updated On: March 3rd, 2012] [Originally Added On: March 3rd, 2012]
- Web Host 1&1 Provides More Flexibility with Dynamic Cloud Server [Last Updated On: March 3rd, 2012] [Originally Added On: March 3rd, 2012]
- Leap Day brings down Microsoft's Azure cloud service [Last Updated On: March 3rd, 2012] [Originally Added On: March 3rd, 2012]
- RightMobileApps White Label Program - Video [Last Updated On: March 3rd, 2012] [Originally Added On: March 3rd, 2012]
- bzst server ban #2 - Video [Last Updated On: March 3rd, 2012] [Originally Added On: March 3rd, 2012]
- “Cloud storage served from an array would cost $2 a gigabyte” [Last Updated On: March 6th, 2012] [Originally Added On: March 6th, 2012]
- More Flexibility with the 1&1 Dynamic Cloud Server [Last Updated On: March 6th, 2012] [Originally Added On: March 6th, 2012]
- Hub’s future jobs may be in cloud [Last Updated On: March 6th, 2012] [Originally Added On: March 6th, 2012]
- Cloud computing growing jobs, says Microsoft [Last Updated On: March 6th, 2012] [Originally Added On: March 6th, 2012]
- TurnKey Internet Launches WebMatrix, a New Application in Partnership with Microsoft [Last Updated On: March 6th, 2012] [Originally Added On: March 6th, 2012]
- Cebit 2012: SAP Cloud Computing Strategy - Introduction - Video [Last Updated On: March 6th, 2012] [Originally Added On: March 6th, 2012]
- Dome9 Security Launches Industry's First Free Cloud Security for Unlimited Number of Servers [Last Updated On: March 7th, 2012] [Originally Added On: March 7th, 2012]
- Servers Are Refreshed With Intel's New E5 Chips [Last Updated On: March 7th, 2012] [Originally Added On: March 7th, 2012]
- Samsung's AllShare Play pushes pictures from phone to cloud and TV [Last Updated On: March 7th, 2012] [Originally Added On: March 7th, 2012]
- Google drops the price of Cloud Storage service [Last Updated On: March 7th, 2012] [Originally Added On: March 7th, 2012]
- New Intel Server Technology: Powering the Cloud to Handle 15 Billion Connected Devices [Last Updated On: March 7th, 2012] [Originally Added On: March 7th, 2012]
- Swisscom IT Services Launches Cloud Storage Services Powered by CTERA Networks [Last Updated On: March 7th, 2012] [Originally Added On: March 7th, 2012]
- KineticD Releases Suite of Cloud Backup Offerings for SMBs [Last Updated On: March 7th, 2012] [Originally Added On: March 7th, 2012]
- First Look: Samsung Allshare Play - Video [Last Updated On: March 7th, 2012] [Originally Added On: March 7th, 2012]
- Bill The Server Guy Introduces the New Intel XEON e5-2600 (Romley) Server CPU's - Video [Last Updated On: March 7th, 2012] [Originally Added On: March 7th, 2012]
- New Cisco servers have Intel Xeon E5 inside [Last Updated On: March 8th, 2012] [Originally Added On: March 8th, 2012]
- Cisco rolls out UCS servers with Intel Xeon E5 chips [Last Updated On: March 8th, 2012] [Originally Added On: March 8th, 2012]
- From scooters to servers: The best of Launch, Day One [Last Updated On: March 8th, 2012] [Originally Added On: March 8th, 2012]
- Computer Basics: What is the Cloud? - Video [Last Updated On: March 9th, 2012] [Originally Added On: March 9th, 2012]
- Could the digital 'cloud' crash? [Last Updated On: March 10th, 2012] [Originally Added On: March 10th, 2012]
- Dome9 Security Launches Free Cloud Security For Unlimited Number Of Servers [Last Updated On: March 10th, 2012] [Originally Added On: March 10th, 2012]
- Cloud computing 'made in Germany' stirs debate at CeBIT [Last Updated On: March 11th, 2012] [Originally Added On: March 11th, 2012]
- New Key Technology Simplifies Data Encryption in the Cloud [Last Updated On: March 11th, 2012] [Originally Added On: March 11th, 2012]
- Can a private cloud drive energy efficiency in datacentres? [Last Updated On: March 12th, 2012] [Originally Added On: March 12th, 2012]
- Porticor's new key technology simplifies data encryption in the cloud [Last Updated On: March 12th, 2012] [Originally Added On: March 12th, 2012]
- Borders + Gratehouse Adds Three New Clients in Cloud Sector [Last Updated On: March 12th, 2012] [Originally Added On: March 12th, 2012]
- Dell to invest $700 mn in R&D, unveils 12G servers [Last Updated On: March 13th, 2012] [Originally Added On: March 13th, 2012]
- Defiant Kaleidescape To Keep Shipping Movie Servers [Last Updated On: March 13th, 2012] [Originally Added On: March 13th, 2012]
- Data Centre Transformation Master Class 3: Cloud Architecture - Video [Last Updated On: March 13th, 2012] [Originally Added On: March 13th, 2012]
- DotNetNuke Tutorial - Great hosting tool - PowerDNN Control Suite - part 1/3 - Video #310 - Video [Last Updated On: March 13th, 2012] [Originally Added On: March 13th, 2012]
- Cloud Computing - 28/02/12 - Video [Last Updated On: March 13th, 2012] [Originally Added On: March 13th, 2012]
- SYS-CON.tv @ 9th Cloud Expo | Nand Mulchandani, CEO and Co-Founder of ScaleXtreme - Video [Last Updated On: March 13th, 2012] [Originally Added On: March 13th, 2012]
- Oni Launches New Cloud Services for Enterprises Using CA Technologies Cloud Platform [Last Updated On: March 14th, 2012] [Originally Added On: March 14th, 2012]
- SmartStyle Advanced Technology - Video [Last Updated On: March 14th, 2012] [Originally Added On: March 14th, 2012]
- SmartStyle Infrastructure - Video [Last Updated On: March 14th, 2012] [Originally Added On: March 14th, 2012]
- The Hidden Risk of a Meltdown in the Cloud [Last Updated On: March 14th, 2012] [Originally Added On: March 14th, 2012]
- FireHost Launches Secure Cloud Data Center in Phoenix, Arizona [Last Updated On: March 14th, 2012] [Originally Added On: March 14th, 2012]
- Panda Security Launches New Channel Partner Recruitment Campaign: "Security to the Power of the Cloud" [Last Updated On: March 14th, 2012] [Originally Added On: March 14th, 2012]
- NetSTAR, Inc. Announces Safe and Secure Web Browsers for iPhones, iPads, and Android Devices [Last Updated On: March 14th, 2012] [Originally Added On: March 14th, 2012]
- Amazon Cloud Powered by 'Almost 500,000 Servers' [Last Updated On: March 15th, 2012] [Originally Added On: March 15th, 2012]
- NetSTAR Announces Secure Web Browsers For iPhones, iPads, And Android Devices [Last Updated On: March 15th, 2012] [Originally Added On: March 15th, 2012]
- Be Prepared For When the Cloud Really Fails [Last Updated On: March 15th, 2012] [Originally Added On: March 15th, 2012]
- Dr. Cloud explains dinCloud's hosted virtual server solution - Video [Last Updated On: March 15th, 2012] [Originally Added On: March 15th, 2012]
- New estimate pegs Amazon's cloud at nearly half a million servers [Last Updated On: March 15th, 2012] [Originally Added On: March 15th, 2012]
- Amazon’s Web Services Uses 450K Servers [Last Updated On: March 15th, 2012] [Originally Added On: March 15th, 2012]
- Saving File On Internet - Cloud Computing - Video [Last Updated On: March 15th, 2012] [Originally Added On: March 15th, 2012]
- DotNetNuke Tutorial - Great hosting tool - PowerDNN Control Suite - part 2/3 - Video #311 - Video [Last Updated On: March 15th, 2012] [Originally Added On: March 15th, 2012]
- Linux servers keep growing, Windows & Unix keep shrinking [Last Updated On: March 15th, 2012] [Originally Added On: March 15th, 2012]
- Cloud Desktop from Compute Blocks - Video [Last Updated On: March 16th, 2012] [Originally Added On: March 16th, 2012]
- Amazon EC2 cloud is made up of almost half-a-million Linux servers [Last Updated On: March 17th, 2012] [Originally Added On: March 17th, 2012]
- HP trots out new line of “self-sufficient” servers [Last Updated On: March 17th, 2012] [Originally Added On: March 17th, 2012]
- Cloud Web Hosting Reviews - Australian Cloud Hosting Providers - Video [Last Updated On: March 17th, 2012] [Originally Added On: March 17th, 2012]
- Using Porticor to protect data in a snapshot scenario in AWS - Video [Last Updated On: March 17th, 2012] [Originally Added On: March 17th, 2012]
- CDW - Charles Barkley - New Office - Video [Last Updated On: March 17th, 2012] [Originally Added On: March 17th, 2012]
- Nearly a Half Million Servers May Power Amazon Cloud [Last Updated On: March 17th, 2012] [Originally Added On: March 17th, 2012]
- Morphlabs CEO Winston Damarillo talks about their mCloud Rack - Video [Last Updated On: March 20th, 2012] [Originally Added On: March 20th, 2012]
- AMD reaches for the cloud with new server chips [Last Updated On: March 20th, 2012] [Originally Added On: March 20th, 2012]