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Comment by csdreamer7 | Hacker News Reader

With the concentration of server buying by AWS I am surprised Intel believes it can get away with this. AWS has the expertise and the incentive to push for supporting a competitor that offers a superior value.

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I'd bet that the cloud-scale customers like AWS negotiate pricing that has very little to do with the published list price of these CPUs.

More than that, Intel builds custom chips to AWS specs.

Kind of. From what I understand, any customer large enough can get small features added, and they just get turned off for the other customers.

Depends on the feature, as far as I can tell. Intel has been known to do entirely custom chips, if the price is right (and realistically, you need lots of volume to be able to justify the setup cost of it).

If we are talking about modern processors, I doubt they are going to do custom masks.

There's no way the price is right for custom Skylake Xeons, especially considering how easy it is to disable features on chips after you make them.

And I think this is possibly one reason for the pricing. When a >50% (guessing, any better numbers?) of new chip sales volume comes from a few hyperscale buyers with individually negotiated contracts, you're far more flexible with what you do for the remainder.

Heck, Intel might even not really have the production volume on all SKUs to sell to non-hyperscale! And if that's true, then why would they do anything other than milk the few customers it deigns to sell to?

That could be one reason why it's priced so high: because they wouldn't be able to make enough to meet demand otherwise. They can price it extremely high to keep demand under control, and negotiate special pricing with a few selected customers that they really care about pleasing.

What % of Intel's sales by volume do you think goes to AWS, GCP, Azure?

While AWS is one of the largest buyers, I doubt that they have a significant share of Intel's profits. There are probably a handful of companies buying (nearly) as much and sales will be dominated by small datacentres and enterprise customers. A lot of Xeons don't end up in servers but in workstation computers.

From the reports I've seen, the big vendors (HP, Dell, Lenovo, etc.) ship about 3x more servers than workstations. And that probably understates the degree to which Xeons end up in servers rather than workstations since HP, Dell, and Lenovo account for a significant percentage of the workstation market whereas there are a lot more vendors and custom-built hardware in the server/datacenter markets.

Given AwS's leadership in being the world's datacenter, they must purchase enough Intel CPUs to have some say, so I'm surprised we haven't seen Amazon offer of CPUs clocked at 10 GHz.

Home users don't have liquid nitrogen piped into their homes or even really the expertise for hot vs. code aisles, but AWS is building their own datacenters, at which point they could pipe liquid nitrogen in if they chose to. At the scale and concentration to AWS is building at, I certainly hope it leads to faster computers, if not bigger AWS bills.

The way I recall, AWS had to be embarrassed into offering GPU instances rather than taking the lead in, so maybe there's a competitor out there building for speed.

Check out Softlayer / Bluemix we have customizable bare metal offerings.

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