If HP/ARM rumors are true, AMD might be the big loser

AMD is getting pressed from all sides of their business model, and it looks like it's going to get worse.

With the rumor mill expecting Calxeda's announcement on November 1 to be that HP will be utilizing their ARM-based server technology to deliver highly energy efficient servers suitable for web serving and similar tasks, most punditry has expressed the opinion that this is a shot across Intel's bow. But if you take a step back you will realize that AMD, who has always positioned their server products as less expensive and more energy efficient, while delivering almost as much performance as Intel, is stuck squarely in the middle of this potential fight.

While the majority of server vendors, including HP, offer AMD alternatives in many of their platforms, there is no question that Intel is the dominant CPU provider to the server market, with studies showing their market share at as much as 90% of all servers. AMD is fighting for as much of that remaining 10% as they can, plus whatever they can pull away from customers who are considering Intel alteratives.

AMDs best chance in this fight is that the software ecosystem for ARM ion servers is still in it's infancy, and, at this point, that ARM server technologies have been strictly running flavors of Linux, so the AMD server customer who runs Windows Server isn't threatened.  But this is likely a temporary situation that will only get worse for AMD as the ARM server market begins to mature.

ARM isn't only threatening AMD's potential server sales. At the other end of the spectrum, the dominance of ARM processors in the mobile market is going to start eroding the low-end notebook market where AMD has such a significant presence. As tablets become more capable, it won't just be netbooks that lose out but more traditional notebooks as well, and the commodity style notebooks, where AMD CPUs are the value leader, being the products most threatened. This will become even more so when Windows 8 Metro applications begin shipping in volume and tablets running that flavor of Windows and Metro on ARM become commonplace.

In the datacenter server, performance and capability is king, and Intel is firmly enthroned and continues to improve their products. While there is a threat from other server technologies in the datacenter, Intel isn't the most vulnerable player in the CPU market to technologies focused on power/performance/value efficiencies