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Intel (NASDAQ:INTC) has nearly completed a complete clawback of server market supremacy with yesterday's announcement that Sun Microsystems (SUNW) will closely collaborate with Intel. After substantially improving their devices and surpassing the benchmarks set by AMD (NASDAQ:AMD), Intel is back in the driver's seat when it comes to high-margin server CPUs. This was an outcome I felt was never in doubt.

Low power multicore architectures are going mainstream in general computing applications and are no longer solely the exotic domain of server computing.

With Sun and Intel broadening their relationship, I expect Sun to move completely away from internally developed silicon. I outlined why this would take place over a year ago (see Sun Wants to Change the Planet), and the arguments are even more valid today given the progress and commitment that Intel made toward multicore architectures.

Schwartz’s blog all but indicates this move is underway:

Perhaps the most interesting part of the relationship (at least for enterprises) is this: we’re pairing up to do some collaborative engineering around larger systems (where larger implies greater than 4 socket . . . ). Optimized for Solaris and Java, of course, and leveraging one another’s virtualization and performance technologies.

This is exactly the application their in-house Niagara is targeted. Schwartz is essentially saying that Sun will work with Intel to utilize their silicon in high-end systems.

Apple Computer (NASDAQ:AAPL) moved its entire hardware base over to x86. Remember how hard Apple pushed the RISC architecture and its technical supremacy? It appears that Sun, the last real holdout in non-x86 computing, is poised to capitulate as well.

INTC and SUNW 1-yr chart
INTC and SUNW 1-yr chart

Disclosure: Author owns no position in the above-mentioned stocks.

Source: Intel Back In Server Driver's Seat After Sun Deal