Even though the market is very well served today, Intel has a lot of muscle. I expect that they can take a big portion of the market, but they may not be the best fit for the job. We will watch as the market changes.
The natural conclusion is that Intel will reduce its profit margins considerably to be able to compete. If that trend continues, earnings per share will go down and shareholders will start to question the current strategy. I personally do not think this is sustainable.
The competition will come down to cost-performance ratio. Cost will cover daily operational cost. It means power consumption of the server (not just the CPU). Performance will include not only MIPS but also how many VMs and services can be run on a single server.
Is there a comparison study of x86 vs ARM? Ideally, a benchmark study.
There's no question Intel is sdoing everything it can to get into this market as aggressively as possible. I am not sure they will be limited to an eight-core offering though. It seems to me that their product lineup will span as far and wide as they can possibly get it to. They won't be giving up their edge in traditional x86 platforms anytime soon either.
Perhaps Intel did define the term microserver, but not the drivers behind it and it's natural existence today. Just look at current cost and power requirements in server infrastructure, the shrinking bang for the buck being realized by purchasing the latest, highest-power server processors for current workloads, and the increasing availability of SOC-based processors with enhanced IO and various heterogeneous compute engines. Intelligent scaling is sorely needed that makes use of these growing and different features, not just brute force as has been the mantra in the past.
@Fonya: Give Intel some credit for radically scaling back the power of Xeon and Atom cores in servers...and fir being the the first to ship a custom low-power SoC for servers. Atom's there today, ARM not yet really.
Clearly there are many companies offering ARM SoC's in this space that deserve some sort of credit. But Intel can still leverage its advantage in the server processor market in general in order to take those companies on in microservers in the long-run. Calxeda is a good example of the pressure and the difficulty that those companies face, given its recent fate.
@Rick: Give Intel some credit for radically scaling back the power of Xeon and Atom cores in servers...and fir being the the first to ship a custom low-power SoC for servers. Atom's there today, ARM not yet really.
Intel already had low power designs in the ATOM line, so extending the technology to servers wasn't a big stretch. And Intel could read the tea leaves, and see that as server density multiplied, power and cooling requirements would become an increasing concern.
Atom was intended for smaller devices, like smartphones, tablets, and netbooks, where battery lie was the scarce resource, but it hasn't been competitive with ARM in the smartphone and tablet space, where the huge growth has been.
It's gambling it can get a lead in servers, because the server space is basically 64 bit, and ARM doesn't yet have a 64 bit design that might be used in servers.
It will be interesting when 64 bit ARM cores become available in silicon to use in server applications. In 32 bit processors, ARM has been more power efficient than Atom. Will that continue in 64 bit machines? If it does, and overall performance of ARM based servers is good enough to meet customer requirements, Intel's lead may be transitory.
@docdivakar: I hope what you say abou 64 bit ARM cores becomes a reality in 2014 because the data center applications really do need that from all perspectives.
I'm sure ARM, Ltd is head down and plowing ahead to bring it about, but I don't know if 2014 is feasible. First, ARM has to have a set of 64bit designs. Then vendors have to implement them in silicon. How fast can that happen?
I see a fairly enormous market where raw performance is not the key factor. Google and Facebook data centers are examples: scale by adding more servers. Sheer performace of any individual server won't be as critical. What will be critical will be server density, with associated power and cooling requirements. Power efficiency needs to be superb. Performance merely has to be "good enough".
If I'm the Google exec in charge of data center build-outs, I'm probably salivating over the potential of 64 bit ARM designs if the power efficiency is in line with the 32 bit units. An Intel processor may be faster, but I don't care. What I do doesn't generally require the fastest server, and faster chips will be more expensive with higher costs per CPU, as well as greater power requirements.
Intel sees an opportunity to get an early jump on low power 64 bit server designs. The key for Intel will be increasing power efficiency even further. What I've seen thus far is that 32 bit ARM designs beat Intel Atom designs with performance roughly comparable. If 64 bit ARM designs have the same advantage over low power 64 bit Intel designs, Intel has an uphill battle.
Intel might find itself split internally, with their state of the art foundries that generate revenue shipping silicon advocating licensing ARM cores, because they see a better market for the silicon thay make if they have ARM designs to sell. (Intel used to make ARM chips before they sold the division to Marvell, so there's precedent.)
Of course, if your observation is correct and Intel's 32-bit core designs are behind ARM's in terms of pwerformance, that does not bode well for the race in 64-bit designs. Still, getting there first and having the raw performance advantage in general with faster CPUs gives Intel a bit of breathing room.
ARM already has finished 2 64-bit designs, Cortex-A53 and A57, which will appear in products mid 2014. X-Gene will be available before that - initial versions use 8/16 4-way OoO cores at 2.4GHz, so clearly aiming for top performance (faster than A57). It will be interesting to see how they compare to x86 servers - they claim "4x the density and 50% less power while delivering comparable-to-better overall performance."
Server market is still open for grab. The game here is not only the power effeciency but the space, speed and availablity is also important. ARM must know all these and so does Intel. After loosing out in personal computing space it will be interesting to see how things work out in clouds.
Intel has definitely been very aggressive with its Intel Inside campaign. Its still debatable as to whether the investment they have made has been worth it, but I have seen the company expand its acquisitions and in-house research quite a bit over the years so there's little to suggest that an aggressive marketing push is distracting the company or diluting its resources thus far.