Nvidia's CES 2013 clunker: It's not easy going cloud

Summary:Nvidia's CES 2013 press conference was clunky. That's what happens when you try to explain a transition to the cloud when you're used to more pizazz.

Nvidia either changed the landscape for cloud computing and its processor prospects or botched a press conference Sunday in Las Vegas. We won't quite know for sure a few years from now.

What exactly was Nvidia trying to do with a clunky press conference at CES 2013 that had ZDNet's Andrew Nusca and Rachel King as well as CNET's Scott Stein shaking their heads? Forgive Nvidia, it was just trying to be a hardware company navigating the cloud landscape. We've seen this movie before. And there will be repeats.

For the record, Nvidia rolled out a gaming grid, Tegra 4 mobile processor and Project Shield, which is some gaming contraption that's more vapor than reality. Nvidia was light on details throughout.

More:  CES 2013: Nvidia Grid servers might not be as flashy, but they're powerful  |  CES 2013: What happened on Sunday  CNET: Nvidia Grid pushes gaming to the cloud | Tegra 4, gaming dominate Nvidia's 2013 plans | Nvidia announces own 'Shield' gaming device at CES | CNET's CES coverage

Nusca was on scene at the "sprawling, unfocused press conference" complete with "live demos that didn't always work." Nusca goes on:

All the consumer technology reporters were sitting in the dark waiting for the big reveal, and CEO Jen-Hsun Huang takes FOREVER to get there. He shows off technology that allows for video game graphics optimization, which is cool but not really sufficient for the occasion. When he finally takes the big leap, he unwraps...a server stack. You could see the confusion on Twitter.

NvidiaGrid_2

 

We'll let CNET's Roger Cheng tell the tale in a tweet:

 

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Nvidia's problem is that it can't show its vision for gaming, which revolves around cloud computing and data centers powered by its processors.

And that's the rub. Nvidia today makes its money by selling processors that work in PCs, mobile devices and increasingly servers. In some respects, Nvidia is a smaller Intel with an emphasis on graphics.

The challenge is the cloud. Hardware vendors of all stripes---Nvidia, Intel, HP, Dell, etc.---will increasingly have to sell to fewer customers. On the enterprise side, processor giants will have to sell to cloud farmers---service providers that buy servers in bulk and expand rapidly. Think Amazon. Think Facebook. Think Verizon. You get the idea.

As this shift happens, these hardware vendors will increasingly become component plays. Corporate and consumer tech buyers will buy their computing power from a service provider. You won't sweat PC graphics because everything will come from the cloud. Good luck pitching Nvidia in that world. There will be a day---one that's fast approaching---where CIOs will scoff at the idea of procuring and provisioning a server.

Nvidia's challenge is to be a huge component brand. Intel is one of the few technology players that has been able to care about whether its chips are inside a device or not.

This shift is a bit hard to relay to folks who are expecting gadget plays at CES 2013. The future is a computing stack and architecture. Nvidia's problem is that it took two hours at a press conference and still couldn't properly explain what was going on. The reality is that Nvidia can't show off a cloud architecture and plans to be enable the Amazon Web Services of gaming.

Nvidia's stack may bore the hell out of people attending CES 2013, but it's no less important than some gaming contraption. What remains to be seen is whether Nvidia can navigate the hardware to cloud change. JMP Securities analyst Alex Gauna said:

GeForce Experience and Nvidia Grid represent a return to Nvidia emphasizing its gaming capabilities relative to the messaging of past years such as GPU compute, superphones and tablets. We believe the tides of integration, whether it be vertical integration, CPU/GPU integration, or Apps processor/baseband integration, are working against the company at present, and it was not evident from the Cloud experiences the company demonstrated that it has found the use cases to reverse these pressures.

Topics: Cloud, Data Centers, Processors, Servers

About

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CN... Full Bio

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