By now, I guess everyone has seen the incredible news that the EU has levied a €1.06 ($1.45USB) fine on Intel for "illegal sales practices". As you can imagine, Intel was unhappy about the news, while AMD applauded the move.
From a technical analysis perspective, there are no immediate implications. Intel will still continue to ship it's entire portfolio of processor products, including the new Nahalem (XEON 5500 series) processor. Well, at least for now. However, one has to question the long term implications, including whether or not Intel has the cash to sustain these product lines given the fine. Intel, like many other companies in this economic climate, are watching every dime. Will this fine affect their ability to produce product in sufficient quantities to meet IHV demand? These types of issues make IHVs (e.g. Dell, HP, and IBM) very nervous. Often times, there simply aren't enough chips to go around in the server market. That's why every IHV scrambles to be "on stage" with Intel when they announce a new processor...to guarantee they are "first to market" and corner as much of Intel's capacity as possible. The more processors the IHVs have on hand, the more serves they can manufacture... and the easier it is to keep the competition from shipping similar servers. It's been this way in the server market for years. How many times have customers attempted to purchase a server from an IHV, only to find out that the ship date is extended 3+ months?
Another question: will this judgment hinder Intel from making more investments in future products? Chips design is a long process. New processors are on the drawing board 5+ years in advance. If Intel is forced to make hard decisions, R&D may be the place.
Part of what we've been blogging on here in DCS is the increasing competition within the IT industry...including Ciscos's entry in the blade server market with UCS and Oracle's Virtual Iron acquisition. We think it's an inevitability that larger companies will begin to compete across technical, geographical, and vertical market boundaries. Companies that were once "close partners" are now suspiciously watching each other from across the table. Stands to reason the the governing agencies will be closely following these unfolding events.
[posted by: Drue Reeves]