AMD'S Opteron: A Chip Off The Same Old Block

Advanced Micro Devices Inc. will introduce its much-anticipated Opteron line of 64-bit processors this week. Despite having garnered the support of Microsoft--by way of a version of its 64-bit operating system, Windows Server 2003, specifically for Opteron--the new chip is likely to follow AMD's previous generation of server processors into high-performance computing environments rather than day-to-day corporate data centers, industry sources predict.

Opteron's two biggest markets will be databases and high-performance computing apps, says Marty Seyer, VP and general manager of AMD's microprocessor business unit. AMD doesn't have a strong track record in the server market, Seyer acknowledges, but its approach of supporting both 32-bit and 64-bit apps should help the vendor attract companies ready to begin their 64-bit migrations before converting all of their apps to 64-bit.

Opteron, which will be priced starting at $283 per processor, has its share of hardware support. Newisys Inc. last week signed a distribution agreement with Avnet Applied Computing, a division of reseller Avnet Inc., to sell Newisys' rack-mounted Opteron-based servers. The two-processor Newisys 2100 server, the first in a line that the company plans to build around Opteron, features 512 Mbytes of memory and up to two hot-swap drives capable of storing up to 146 Gbytes of data. Server maker Einux Inc. will introduce 10 Opteron-based servers at AMD's launch event in New York, and has already shipped 100 test units to a number of customers, says Rex Wong, president of Einux. About half of those Opteron servers are running in high-performance computing environments, Wong says.

Windows Server 2003 won't open new markets for AMD, says George Condon, executive VP of Avnet's AMD business unit, because the Opteron chip was designed for clustered computing environments, most of which prefer Linux. Indeed, SuSE Linux this week will introduce a version of its Linux Enterprise Server operating system, priced at $448, that runs on Opteron servers.

Texas A&M University expects to have a high-performance computing cluster by the end of this month using 128 dual-processor Opteron servers running SuSE Linux that support 384 Gbytes of RAM. Texas A&M's College of Science will use the cluster to solve computational problems as well as run bioinformatics and physics apps. The university has clustered 32-bit AMD Athlon servers and wants to take advantage of the additional memory addressability that 64-bit computing provides. "At a university, price-performance is a major factor in our computing purchases," says Steven Johnson, senior systems analyst with Texas A&M's mathematics department. "The biggest benefit of Intel and AMD getting into the 64-bit market is to drive costs down."

AMD has a lot riding on Opteron's success. Last week, the company reported a 21% dip in sales for its first quarter, ended March 30. AMD reported a loss of $146.4 million for the quarter, on sales of $714.6 million, compared with a loss of $9.2 million on sales of $902 million for the first quarter of last year.

Opteron is in line with where the server market is going, says Nathan Brookwood, principal analyst for Insight 64. "Over the remainder of this decade, we'll see a substantial shift from processors based upon proprietary architectures to industry-standard processors from Intel and AMD." Itanium targets the high end of the server market, those that run more than 16 processors and cost between $25,000 and $1 million, he says, while AMD targets two-way and four-way servers that generally sell for less than $10,000. Says Brookwood, "Intel and AMD will rarely compete within the next few years, at least until Intel grows down and AMD grows up."