Maybe Larry Ellison's killing of Opteron-based servers from Oracle's Sun Fire x64 server lineup earlier this year was a love touch instead of a bitchslap for Advanced Micro Devices?
Two weeks go, as Ellison ended a securities analyst meeting in the wake of its OpenWorld extravaganza, the company's co-founder and chief executive officer hinted that he would like to get his hands on network disk array maker NetApp. He also said that Oracle could buy chip companies because "silicon is important" and that the company was focused on building its intellectual property portfolio.
What quicker way to accomplish this - and totally upset the hardware applecart - than to have Oracle acquire Advanced Micro Devices?
AMD is being coy about the idea, which is its fiduciary duty at the moment. The x64 chip supplier's president and CEO, Dirk Meyer, gave a keynote address at the Canalys Channels Forum 2010 event in Barcelona, Spain, today, and Reuters reports that Meyer said "AMD is not for sale" but then quickly added that AMD was "happy to listen to any proposal" that was in the interest of shareholders.
Everyone knows that Oracle is shopping and everyone knows that Ellison has caught the hardware bug and wants to control an entire stack of hardware and software to run its database, middleware and application software - soup to nuts.
AMD's shares are trading at $7 a pop as of the market close yesterday, giving it a market capitalisation of $4.68bn (£2.95bn). Now might be a pretty good time for anyone to take a run at AMD if they want to get their hands on a vast portfolio of chip intellectual property. Chip demand is slowing as the PC market cools, both Intel and AMD are cutting guidance for the third quarter, and AMD shares are down 30 per cent from their most recent peak in May.
The problem with this theoretical acquisition, of course, is that Oracle is not a volume player in the server racket - it's not even close, and much further away than Sun was several years ago when the initial "Galaxy" Sun Fire servers gave Sun a fighting chance to build volumes. If Oracle bought AMD, its customers in the PC and server markets would be its competitors in the server space.
But, with every server maker somewhat beholden to Oracle because of its iron grip on the corporate database market on Unix, Linux, and Windows servers, the software giant and hardware wannabe would have some leverage over Hewlett-Packard, IBM, and Dell. Of course, Oracle already has plenty of leverage over Fujitsu, thanks to its Sparc partnership. If Oracle kept AMD at arm's length, server and PC makers might be appeased.
It seems far more likely that Oracle will snap up niche chip makers that make networking and other types of chips that might help system-level performance, and that it would stick to its partnership with Intel for x64 processors - and create its own Sparc chips with lots of features to goose Oracle software performance.
In the meantime, AMD is in Barcelona talking up its expanded Fusion partner program for its PC customers and its expanding base of channel partners for its "Magny-Cours" Opteron 6100 processors for midrange and high-end x64 boxes.
Hewlett-Packard and Dell have the broadest Opteron 6100 offerings, and IBM has finally put a single (some might say token) box into the field. Oracle, of course, has not put any Opteron-based machines out since taking over Sun and has not officially killed off the Opteron products, but unofficially has told customers it has, as previously reported by El Reg. Like Oracle, Fujitsu has backed off from Opterons and has not shipped a machine since the Opteron 2400/8400 chips came out two years ago. In addition to the big three, AMD now counts eight server channel partners for Opteron 6100s in the Americas, five in Asia, and a dozen in EMEA - plus motherboard makers ASUS, Gigabyte, Super Micro, and Tyan.
On the PC front, channel partners all over the globe will now be able to participate in a unified Fusion partner program aimed at both commercial and channel partners. David Kenyon, vice president of worldwide channel marketing at AMD, says that now all channel partners will get a consistent set of tools and incentives as they peddle AMD's chips either directly, or inside of their own (or others') products. AMD has added benefits tracks for system distributors and component distributors and has created a rewards program that allows those who sell Fusion chips, take AMD training, or attend events to gain points that can be exchanged for AMD products, cash rewards, or travel compensation. The rewards program is piloting in the United States, Brazil and Canada now, says Kenyon. He added that it would be rolled out globally over the next two quarters.
AMD is trying to get its partners lined up and motivated ahead of the "Ontario" Fusion APU, which packs a Bobcat core and a GPU onto a single package, later this year. As Meyer previously announced when AMD went over its Q2 financials back in July, the Ontario APUs have been pulled forward into 2010 for deliveries in machines in early 2011. Meanwhile, the "Llano" higher-end Fusion APUs were pushed out a few months into 2011 because yields on the 32 nanometer processes at the GlobalFoundries wafer baker in Dresden, Germany, are not yet where they need to be. The Ontario APU is being fabbed by AMD's GPU foundry partner, Taiwan Semiconductor Manufacturing Corp, using its bulk 40 nanometer processes. ®