John Chambers believes Hewlett-Packard Co. is on the ropes and is unlikely to recover strongly enough to regain its old glory. The CEO and chairman of Cisco Systems Inc. believes Meg Whitman, his counterpart at HP, may not succeed in turning around the company. He may be right; at best, Whitman will succeed in whittling down HP's cost structure enough to improve its margins, but she will also eventually preside over a much smaller giant.
Chambers advanced two reasons for his conclusion. First, "there's not been a company ever turned around by the fifth CEO on the job," he told Reuters in an interview, referring to the succession of senior executives who have been appointed to lead HP over the course of the last seven years. I checked, and HP has indeed had five CEOs in substantive or acting capacities since Carleton Fiorina left in 2005.
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Chambers's second reason for his pessimism about HP's future resonated with me. The Cisco boss said rivals, including his company, which competes against HP in the networking equipment market, are hacking away at HP's market share while the Palo Alto, Calif.-based company is busy with cost-cutting and reorganization actions. He said Whitman has a "tough hand to play, but... I like competing against that hand, and we are going to try and accelerate that while they are struggling."
HP's "weak hand" isn't merely due to the revolving CEO door the company has had in the last decade. Like many other tech enterprises across the global economy, HP is a flawed company whose competitiveness has been compromised due to its failure to recognize and respond to shifts in its markets. The company, says short seller and hedge fund manager Jim Chanos, "missed the fundamental shift from personal computers" to tablets and phones, according to an article in the Insider Monkey. Turning HP around won't be achieved by simply cutting costs, he says.
I agree. But now that we understand a "fundamentally flawed" company cannot recover simply by shaving costs, what are the options open to the management of such an enterprise? This is an important question for the high-tech industry especially because of the seismic changes taking place in many segments of the market. The tech sector is awash in cash and on the surface seems to be thriving—but that perception is deceptive. Below the surface, many technology companies are struggling to maintain market share, improve margins, and in some cases even justify their presence in certain sectors.
Atom is Intel's current foray into low power computing. Before that, they spent 30 years perfecting the standard platform, which used power like there's no tomorrow---the goal was speed, and the only limitation was the 150W TDP region where aircooled heatsinks are no longer sufficient. So maybe that first attempt at low power as primary driver is not that great, but don't discount Intel: their x86 CPUs use leading semiconductor technology (sub20nm geometry, FINFET transistors, high-K dielectrics, exotic metalization) and Intel's proprietary layout tricks.
ARM may have a better architecture, but they use standard cell layout and more standard processes.
I can't possibly go wrong by predicting that ARM will improve the speed of ARM chips, just like Intel will improve the Atom. In the end, what may become the differentiating factor is that because of all this fanciness Intel's cost structure is higher and they can't sell Atoms for around a dollar, which is where ARM seems to be. Therefore, they will keep occupying high performance end of the market, in particular serving those unfortunate folks that can't port their software away from x86 binary dependence. ARM will make inroads on the strength of better native performance and superior power efficiency. Emulation may matter to some but more as a checkbox item, a security blanket that makes it easier to switch platforms. I can't see it having significant practical use.
I'm citing Anandtech's benchmark:
If the Atom (or the x86 architecture in general) can't cut it running on a cell phone, what makes you think it's all that superior on a data center? (I'm suggesting a reasonable apples-to-apples comparison here, I'm sure given time and semi-infinite available power ARM will be able to extend their concept even further into the "big iron" marketplace. After all the cell phone and server arenas differ far more in their power budgets than they do in their S/W.)
Right, I read the article and it says that they emulate x86 with 40% (or even 80%) of native performance OF THE ARM PLATFORM (not the native x86 as you seem to believe), which is significantly lower than the performance of the real deal server-class x86 from Intel. Why would anyone implement a datacenter on those ARM chips if Intel software compatiblity was important to them?
Don't get me wrong---I love ARM, as an embedded platform and even as an energy-efficient server platform. I just don't think using them to emulate x86 makes sense.
By the way, what does it even mean that "iPhone 5 is the world's fastest cell phone"? It calls faster? Even if it was fast on some metric (video decoding? running games?) you're talking about smartphone market segment, which is irrelevant to data centers.
Like I said READ THE ARTICLE! Elbrus has developed binary translation technology, they can currently demonstrate 40% performance of native x86 but will shortly get it to 80% that they can currently foresee. And servers ARE the "cloud-based back end" where compatibility is still quite important. Also ARM doesn't generically "lag in performance", ARM-based iPhone 5 is the world's fastest cell phone despite there being several Atom-based platforms currently on the market to challenge it.
I just don't understand how an x86 emulation on ARM can help. ARM lags in performance, but makes it up in its market segment by superior power efficiency. Emulating x86 on such slower chips is bound to be slow-squared. The only reason to do it would be legacy applications, but the whole point of the post-PC era is that it's no longer the Wintel monopoly: backwards compatibility requirement is over.
The new software is portable---either because it's Open Source (like Android) or because it is written in Java or HTML5, or is really a light client running against a cloud-based back end.
Right, but look at the current article about Elbrus Technologies creating an efficient x86 emulator for ARM chips, effectively negating the major reason behind Intel's dominance in server markets. (Intel had an opportunity to develop ARM technology but sold it to Marvell if you recall.) If Intel becomes less relevant then so does Wintel. That doesn't make Microsoft "irrelevant" overnight, but it sure isn't doing much to bolster its long-term survival. That puts two more major techs in the "aging dinosaur" column...!
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