Chip designer and chief Intel rival AMD has signed an agreement to acquire SeaMicro, a Silicon Valley startup that seeks to save power and space by building servers from hundreds of low-power processors.
With the purchase, AMD will not only turn itself into a server maker, it will turn itself into a server maker that uses chips from Intel. Today, SeaMicro's servers are built with processors from AMD's rival, including Intel's Atom mobile processors as well as Intel Xeon chips.
AMD says it will continue to sell and support SeaMicro servers equipped with Intel chips "for the foreseeable future." But it also hopes to license SeaMicro's server "fabric" technology to other server sellers, including big names Dell and HP, and it plans to introduce AMD Opteron chips into SeaMicro machines sometime in the second half of the year. SeaMicro's fabric is a way of efficiently connecting various pieces of server hardware, and the company says it can be used with virtually any processor.
Less than a month ago, Intel and SeaMicro held a joint press event where they predicted a bright future together, so it would appear that the AMD acquisition came about rather quickly. But AMD's Lisa Su -- the company's senior vice president and general manager for its global business units -- says the chip designer has been eyeing technologies along the lines of SeaMicro's for some time.
"We've been looking at the key technology innovations that are going to really disrupt the server market. We've been looking at fabric technologies -- externally with a number of companies as well as internally, looking to develop ourselves -- and we felt that SeaMicro was really the best option. It was proven, and it was in systems," Su said on Wednesday morning during a briefing with reporters.
"The complement of our processing capability and SeaMicro's fabric technology gives us what we think is a very, very strong [intellectual property] portfolio."
AMD will pay $334 million for SeaMicro, including $281 million in cash. The deal is expected to close in "a number of weeks."
Based in Sunnyvale, California, SeaMicro is at the forefront of a movement to build servers from ultra-low-powered processors -- aka "wimpy cores." The idea is to reduce power by splitting applications into small pieces that can be spread across a larger number of chips, not unlike the one running your cell phone. Texas startup Calxeda offers "wimpy core" servers equipped with chips using the ARM instruction set -- an alternative to the x86 instruction set used by Intel and AMD -- while HP is exploring the idea with a research effort it calls Project Moonshot.
But last month, during that press event co-hosted by Intel, SeaMicro announced that it would also offer servers equipped with Intel Xeon chips, which were specifically designed for servers. Xeon consume more power, but they also offer more speed. SeaMicro says that certain software workloads are suited to the wimpy cores, while others are suited to "brawny cores," and this same message is delivered by the likes of Dave Andersen, the Carnegie Melon professor who coined the wimpy core name.
Whatever processor it uses, SeaMicro says, it can save power and space when you compare its machines to traditional servers. The company has built specialized ASIC chip loaded with software that allows the company to build ultra-small motherboards that include little more than processors, memory, and the ASIC itself -- and then connect hundreds of these boards. According to the company, this technology is "chip agnostic," meaning it can relatively easily be used with new chip architectures.
AMD and SeaMicro say that they will "explore" the use of SeaMicro's fabrics with all sorts of processors, both wimpy and brawny. This may include ARM chips. In recent weeks, AMD has hinted that it will eventually license ARM technology.
Asked if the company will continue to offer ultra-low-power chips along the lines of the Intel Atom, SeaMicro CEO and co-founder Andrew Feldman said "absolutely." But he declined to point to specific processor architectures. "This [SeaMicro fabric] technology can work with larger cores and small cores. It can work with x86 and non-x86. It can also move Ethernet traffic and storage traffic," Feldman said.
AMD chief technology officer Mark Papermaster then piped up to point out that AMD is intent on using whatever chip technologies are needed to get a particular job done. "If you look at our roadmap, we have a very agile [system-on-a-chip]," he said. "It allows us to be more pushy in bringing in our IP."
SeaMicro currently employs 80 people, and about half of them are engineers. One of those engineers is founder and chief technology officer Gary Lauterbach, who was previously an AMD fellow and one of five architects who build the core of AMD's Opteron processor. Lauterbach was also a lead chip designer at Sun Microsystems, and the idea for SeaMicro first came to him when he and another Sun executive got a look at the low-power servers that powered Google's search engine in the early part of the last decade.
Andrew Feldman will become the general manager of AMD's new "data center solutions" business. According to Su, this business unit will continue to support the current "roadmap" for SeaMicro's servers. This means that the company will sell and service SeaMicro's Intel Atom and Intel Xeon systems -- though Su indicated that the company will eventually drop Intel's chips. She said that AMD Opteron chips will be added to SeaMicro system "towards the end of this year."
Intel's Jason Waxman -- who heads the company's general manager of Intel’s High Density Computing group -- tells Wired that AMD's acquisition of SeaMicro "doesn't change a whole lot" for Intel. He says that AMD will decide whether to keep selling SeaMicro servers with Intel chips, and that Intel will continue to reduce the power consumption of both its Xeon and Atom chips for use inside servers.
"Being able to launch the SeaMicro product with Intel Xeon silicon was a good testimonial for us. They thought we were the best partner at the time," Waxman said. "They chose our silicon for a reason."
Whatever the fate of Intel chips in SeaMicro servers, AMD says the acquisition is about more than just selling machines. The idea is also to "broaden" AMD's relationships with server sellers such as Dell and HP. Presumably, this means that AMD will license SeaMicro's fabric technology to third-parties. "We have new technology that we can add to our existing Opteron roadmap to form something that can really differentiate us in the marketplace," Su said. Andrew Feldman added that SeaMicro has already had discussions along these lines with the likes of Dell and HP. Currently, Dell resells SeaMicro servers.
That said, the acquisition means that -- on some level -- AMD will be competing with its own customers. It will be both chip designer and server maker. But Su downplayed this notion. "We are not competing with our customers. We have to balance the fact that will continue to support [SeaMicro's] products. But the goal is to proliferate the technology with OEMs," Su said, referring to original equipment manufacturers such as Dell and HP.
"What we saw was a chance to take our technology to multiple markets, with multiple partners, in multiple geographies -- in ways we couldn't do on our own," said SeaMicro CEO and new AMD general manager Andrew Feldman. "The opportunity to collaborate with the OEMs was larger than the opportunity to compete with them."
Update: This story has been updated with comment from Intel.
