Comment by mjfern | Hacker News Reader

Comment by mjfern | Hacker News Reader

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In the article, I discuss the importance of ARM's technological advantage over Intel in the area of energy efficiency, especially for portable devices (see paragraph 2). My key point is that even if Intel can match (or beat) ARM from a technical standpoint (e.g., clock speed and energy efficiency), the company may still get disrupted due to ARM's unique business model. ARM's business model provides a benefit for OEM customers in the areas of cost, customization, and supplier-customer relations.

I recognize that it's not just ARM's business model that poses a threat; the threat stems from a combination of ARM's business model, its current technical advantage (in energy efficiency), and trends in computing, with a shift away from PCs (and the Wintel standard) to connected devices running Android and iOS. To your point, the shift away from the Wintel standard has significantly reduced the barriers (i.e., backward compatibility) to the adoption of the ARM architecture for OEMs.

(Note, ARM's recent "rapid rise" in the processor market is illustrated, in part, by the company's stock market performance, with a market cap that has grown about 5x over the last two years.)

I wonder if "disruptive" is really the right term here. As you point out, Intel dominates in market applications such as servers, desktop PCs, and netbooks -- and it's not at all clear to me that Intel's business there is threatened in any way by ARM chips or business model.

Where ARM has succeeded is in new markets (phones and tablets) that both rely on low-power operation and are relatively immune to legacy code or chip architecture issues. As far as I'm aware, Intel's never been successful in those spaces and even took the strategic step of dumping its ARM (Xscale) operation.

My point being, if Intel's secure in established markets and uncompetitive in newer markets, that's not a technological disruption in the classic Christenson sense. It's merely the consequence of earlier strategic decisions to not go after newer low-power application markets. Where would Intel be, for example, if in the early days they had dumped the microprocessor business to focus on their core business of memory chips?

edit: typo

The risk for Intel (and x86) is that ARM-based processors appear to be moving up-market into servers and datacenters, a sign of technology disruption.

- Calxeda (formerly Smooth-stone) is developing servers based on ARM-based technology. (http://www.calxeda.com/)

- In November 2010 it was revealed that Dell is prototyping ARM-based Cortex-A9 servers.

- In January 2011, Nvidia announced Project Denver, with "plans to build high-performance ARM based CPU cores, designed to support future products ranging from personal computers and servers to workstations and supercomputers."

- Microsoft recently announced that Windows 8 will support both x86 and ARM architectures.

- In a February 2011 analysts presentation, Warren East, CEO of ARM Holdings, suggested that ARM is seeking to expand into the PC and server market: "There's a blurring between computers and smartphones, and ARM's success in smartphones is helping us get into computing...Cortex A processors support multiprocessing and that delivers the high level of performance required by server applications." (http://www.theregister.co.uk/2011/02/01/arm_holdings_q4_2010...).

In October 2010, I posted a related article, "The End of x86?," that examines the potential disruption of x86 by ARM using Christensen's disruptive technology framework: http://www.fernstrategy.com/2010/10/21/the-end-of-x86/

Hmm... Calxeda and Dell are at the prototype stage and haven't shipped yet. In the Register article, ARM admits they have "0%" market share in PCs and servers. So the data for ARM in those markets essentially boils down to "boy, those markets would sure be profitable" and "just wait until 2020!"

There's a lot more to the server market than power savings. The Register article also notes: "It is a pity that ARM is not moving the quad-core, 40-bit Cortex-A15 to market faster and talking about either 64-bit kickers or how it will manage virtualized 32-bit applications on multi-core ARM servers such that no one cares that they are 32-bit applications."

As to Microsoft, I can remember Windows NT shipping for DEC Alpha, MIPS, and Power PC. Just because Windows 8 will work on ARM-based netbooks doesn't justify extrapolation to the PC and server markets. And even if Microsoft did (theoretically) support ARM in those markets, well, they actually shipped NT for Alpha, MIPS, and Power PC, and where are those architectures now?

My read of history is that if ARM ever became a real threat to Intel in PCs and servers, the company would simply lower profit margins in those markets to starve the competition. But hey, maybe this time things really will be different.

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