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Chips and SaaS Kicking A$$ – The Six Five Webcast
by Daniel Newman | April 2, 2021

On this episode of The Six Five Webcast host Patrick Moorhead and Daniel Newman discuss the tech new stories that made headlines this week. The six handpicked topics for this week are:

  1. An overview of Intel IDM 2.0 strategy
  2. Oracle updates ADW and SCM
  3. Lattice MVision and Sentry Updates
  4. AWS EC2 X2gd
  5. AMD 3rd Gen EPYC
  6. Intel Nabs Justin Long

For a deeper diver into each topic, please click on the links above. Be sure to subscribe to The Six Five Webcast so you never miss an episode.

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Disclaimer: The Six Five Webcast is for information and entertainment purposes only. Over the course of this podcast, we may talk about companies that are publicly traded and we may even reference that fact and their equity share price, but please do not take anything that we say as a recommendation about what you should do with your investment dollars. We are not investment advisors and we do not ask that you treat us as such.

Transcript:

Daniel Newman: Welcome everybody to this week’s edition of the Six Five Podcast. I’m going to play the host today along with my esteemed colleague, friend, and recently back from Cabo, Patrick Moorhead. And the only reason I point that out is if you’re watching this live right now, you probably notice that he’s got a tan and I look pasty, but that’s because I live in Chicago and the sun only shines three months a year, but the taxes are always high. Anyway, welcome everyone. We missed last week and we missed you last week and we missed each other last week. We were kind of sad we didn’t have a chance to get one in Pat, but I think you needed and deserved a much anticipated time away and it looked beautiful. Yes, he sent me pictures. I don’t know if you published them publicly, but he was tormenting me all week long.

Patrick Moorhead: Yeah, I was flexing a little bit. Whenever I go on an international trip I sometimes don’t like to broadcast where I’m going to be going, kind of makes your home a target, but this is not an issue with my camera folks. I actually have a tan, which is very unlike me. I’m of Scottish descent and us Scotts have very white skin, but it’s there. It might be there for about three days and then it will all flake off. But anyways-

Daniel Newman: Well, I’ll see you when I get down there, when I get down to Austin this weekend.

Patrick Moorhead: I totally forgot about that. You’re flying in. I cannot wait by the way. Austin is booming and rocking right now. I walked home yesterday from work and almost every restaurant was packed on Second Street.

Daniel Newman: Well, it’s always a good leading indicator. I hope everybody out there is being safe and that you’ve had the chance to get your vaccine. Comfortable. Go do that thing. I’m hoping by this fall… Pat, I got invited to a live event in November and I’m going to attend it. So it feels like that day may never have come.

Patrick Moorhead: Yeah, I actually went to my first event yesterday. I attended Dell’s Match Play, which by the way a bunch of proceeds go to Dell Children’s Hospital, but spent the day out there and it was nice. Literally, my first business related event. It was awesome. And I do feel like I have superpowers because I’ve had COVID already and at least the research that I read last week said, “Hey, if you’re under Six Five and you’ve had it, you only have a 0.54% chance of getting it again and therefore giving it to somebody again.” So yeah, it’s nice having superpowers for once.

Daniel Newman: Yeah, well you should probably be a little careful, but actually in all seriousness, I think by next month we’re going to be all getting the chance to get those vaccines and look, I can’t wait to get back out. By the way, I also can’t wait until we have less events, but that we have some. Anyway, great show I think we’re going to have this week, some really interesting topics. A couple of big, big topics. A couple interim incremental announcements of some new solutions. We’re going to be talking Intel quite a bit because that was a big part of the news cycle this week. We’re going to talk about Oracle, Lattice Semiconductor, AWS, AMD, and an interesting advertising campaign, we’re actually going to kind of start and finish with an Intel focus today, but we’re going to hit all kinds of things. We’re going to call this episode Chips and SAS Kicking A… I’m not going to say it on the air.

But before we get started on the show, you got to know we have to disclaim this show is for information and entertainment purposes only and while we will be talking about publicly traded companies throughout the show, please do not take anything we say as investment advice, or as Pat says, do the opposite. I’m sometimes concerned that that’s advice, so I just say don’t listen to anything we’re saying about these publicly traded companies except all the really good analysis, focus on that.

Patrick Moorhead: You’re using your head Daniel. You’re using your head. I appreciate that.

Daniel Newman: Using my head and there’s a lot of it by the way if you’re watching this live. If you’re listening you can’t see that, but hopefully you’ve figured that out by now. All right, let’s get down to it Pat. Let’s talk Intel. So as I said, let me just set the stage. It was a really big news cycle this week. You, by the way, came back from your seven or eight days away and you basically jumped on, I think it was like one hour and 30 minutes of your first work day back, I saw your smiling face on Squawk Alley talking with John Fort and the team over there about some things going on with chips, with shortages, with semi-conductors. And by the way, this was like a premonition of what came the next day when Pat Gelsinger announced what Intel was calling their IDM 2.0 strategy.

It was all about unleashing what Pat is going to do at the helm. Remember, he’s only five weeks in and activist investor, Dan Lowe, who had written some pretty scathing remarks at a time just before Pat came back about the company, it’s strategy, especially it’s manufacturing because all its woes in the past few years have really been about meeting its timelines. And he came back and said “I’ve never…” Essentially I’m paraphrasing, but “I’ve never seen a CEO make such a big impact in five weeks.” So the guy was ready to… I think he put a billion into the company, was ready to start influencing, and he seems really pleased. And by the way Pat, I’m going to steal a little extra of this one because you’ve got like the next four topics are going to be a lot of you, but we’ll weigh in a lot on this one. But he unleashed a strategy that had to do with manufacturing and a whole number of new plants and two at the time, two immediately, a $20 billion investment, going into Arizona to build two new fabs for leading edge. That’s the first part.

And by the way, quietly under that tone, he talked about building more fabs in the US and Europe, which announcements are set to come later. We’ll dig into that more. Intel is going to get big into the foundry business, which was really interesting, and they’re going to start partnering with fabs, TSM, UMC, Samsung, they talked about these different partnerships. I’ll let you talk about that in a minute. And then the fourth piece of it was there was a new partnership with IBM on the research side for them to do a lot of leading edge research. So I talked to death about this. I went on CNBC, you went on CNBC. I wrote a Market Watch op. You wrote a great Forbes article. We’ll link all this crud in the show notes Pat. I talked a lot about it, but I didn’t get too deep into it. Why don’t you tell everyone a little bit about what each of those big four announcements means.

Patrick Moorhead: Yeah so you can read the news before, so I want to give more of the takeaways here. First off, Gelsinger is a straight shooter. I competed with Pat when I was at EMD. I went a few rounds. He went some other rounds. I met with him when he was at VMware as CEO. I got a one-on-one with Pat on Monday and got the skinny and I think first off, he’s a straight shooter. He used words with me about their prior performance on 10 nanometer and abysmal, embarrassing, and that means a lot to me Daniel, the openness for somebody to do that. Yeah, I get that he wasn’t around when this was engineered, but that doesn’t matter to me. It’s part of what I needed to hear to give me more believability that they could power into seven nanometer and this $20 billion investment.

I also, last tech day I told you I keep feeling a little better about seven nanometer and they gave more details on it and I do feel even better because they’re going to be using EUV, which just increases yield because it’s less passes and you get out more chips because it’s less passes, so more efficient. I will add, and this is what some people are misunderstanding that just kind of read my headlines or my tweets, is I have more confidence in 2023 when Intel’s seven nanometer comes online because they’re going to be leveraging TSMC three nanometer for what their press release said was client computing products and data center products. And so you can imagine having a three nanometer TSMC CPU tile, which will be competing against a three nanometer AMD Chiplet. So it should be interesting. So they’re hedging their bets on TSMC.

The other thing everybody needs to be aware of is that Intel was one of TSMC’s biggest customers and they have always done a lot of outsourcing. What’s new here is for doing some outsourcing of things that Intel’s known for, like CPU’s. The other thing is this $20 billion investment and this is for either IFS Foundry or for internal consumption. I think it’s only the start. I do think they will get more money from the EU and from the US. I think combined, two continents are offering $80 billion for semi-conductors and I think that if departments, let’s call it Department of Defense, potentially even anything under critical infrastructure, like carrier, may require more of these chips to be built on US soil by a US company, and that kind of narrows it down to Intel and Global Foundries. And Global Foundries is really focused on things like IOT and 5G as opposed to kind of the bleeding edge.

IFS, listen, Intel has tried the foundry game before. They’ve had very small degrees of success. I actually think they’re serious this time and it sounds credible to me. First off, you have to have standardized everything to do a foundry play because you’re importing and exporting from things like TSMC and Global Foundries and Samsung, you have to reuse content, and you have to have an IP library, and I think the only thing that made my jaw drop about the IP library and what they were offering is first off, it sounds like they’re offering Xcity6 CPU cores. Okay, so think about that. Anybody who you could… hypothetically AMD could be doing that out of there and potentially even tease up another Xcity6 company.

The other thing was risk five. It has a little bit of support and that’s why it was surprising, and then there was arm support. So big news Daniel, this is causing shock waves. I’m getting contacted by data center providers, PC providers, Intel competitors. I’m actually talking to two of them today giving me their case on either why this is a bad idea or a good idea. I think Qualcomm’s in. Who do I expect to be in there? I expect Qualcomm to be a customer. Does that sound crazy? Yeah, right now it does, but guess what? Qualcomm used to actually fab their modems at Intel, so it wouldn’t be the first time, it’s not going to be revolutionary.

Finally, I want to talk about the IBM. The last time IBM worked with Intel on chip IP was in the 80s and DRAM. That just gives you an idea of how long it’s been. And IBM, unbeknownst to most because most people don’t pay attention, is the leader in research for transistor and process technology. Why do I think that? Guess what? Guess where Samsung gets theirs from? They get theirs from IBM, the second largest chip manufacturer out there, leading edge on memory. So Intel the partner, look at that, IP that’s all over the place supporting everybody, standard tools supporting everybody, working with IBM on not only process but packaging technology, and then working with Samsung, TSMC, and Global Foundries more than they were before. A lot of execution. I’m not Babe Ruthing this. There’s a ton of execution. There is zero major changes that Intel can make to their architecture and their own in-house manufacturing capabilities until 2023.

So between now and 2023, it’s going to be about marketing. It’s going to be about turbo charging their fab. Like one good example today recently is taking chips to five gigahertz and beyond, using their current fab to go out there. So yeah, I still think that AMD will gain server market share in 2022. I’m less positive on client market share in 2022. Intel clawed back some. They brought a lot of low-end business for Chromebooks. Why? Because they could. But we’ll see man. Chips are exciting. Chips are fun. Chips are sexy.

Daniel Newman: Yeah, they really are. It’s been a huge week for that particular announcement. It definitely dominated a lot of headlines. That’s why it’s getting the top of our show and it’s going to get a little more time in some of our other topics. Last thought or two before we move on Pat because you covered a ton of ground. I thought I covered a lot, you covered more. Long and short here, my note out to the market was essentially anyone that’s bearish on Intel’s announcement this week are bearish because they doubt execution. You cannot look at what they announced in terms of adding $100 billion in foundry tam, the diversification of the business, the shared progress, partnerships, expansion, that Gelsinger announced and think this is bad. The only thing you can think is bad is there’s no way they’re going to get it done. And you know what? Every one of us Pat, you, me, we’re all sitting there raising our hands saying, “Pat Gelsinger, we like what you’re saying, now you got to do it.”

He said something in one of his presentations that maybe is the earmark of what we all need to watch. He talked about again his say/do ratio. It was what gets said versus what gets done and he wants to have a very high ratio in terms of everything he’s saying getting done, and if he does I think the future looks bright for Intel.

All right, let’s move on to Oracle, Pat. There’s a bunch of updates. Oracle has been really outstanding from an analyst standpoint of keeping us in the loop, being consistently in our faces, telling us what’s going on, updating on the infrastructure side, updating on the application side, and in the past we’ve gotten some of both of them on the autonomous data warehouse, which I’m going to let you talk about, a bunch of updates on their application for supply chain, and a pretty cool partnership announcement. Why don’t you kick off the data warehousing with a little update? You wrote a great piece on Orbs there. We’ll drop that in the show notes.

Patrick Moorhead: Yeah, so first off, Oracle is a big leader in database in case you didn’t know that. Oracle autonomous data warehouse is exactly that. It’s a data warehouse, it’s cloud-based, and it requires a lot less TLC than let’s say an on-prem Oracle database or even something like SQL server database. So what they did though is they took this to a next level here, and what they did is they, where in an autonomous data warehouse they removed a lot of IT requirements for infrastructure requirements for that. What they did here is removing the need to have a bunch of essentially database administrators, data wranglers, data modelers in there. So what they did is they gave direct access. They built a layer of tools and capabilities on top that allowed business professionals to go in, citizen analysts, line of business developers, to go directly in and use it with a SAS interface.

I mean I almost didn’t believe my eyes. I did, I’m like, “Okay guys, is this real or is this demo ware?” They took me through even machine learning models that they had that were already in there. So essentially, new data low capabilities, new data transform capabilities, new automatic access to even templated business models, so it automatically creates business models. I saw it in my own eyes. It was real data. But it is amazing and, Daniel, big picture here, compared to today, compared to something like a Red Shift or a Snowflake, they can’t offer that right now. Here we are, Oracle raising the game once again, and the other thing I’ll add on is that this is one database that auto magically is optimized for eight or nine different types of data, and that’s a little bit different in the way that AWS has it where they have I think 16 different databases that you, the enterprise, actually has to wrangle that data.

So some big black and whites. I love the competitive nature of the database market. And you know, it’s funny, I’ll say it here, while it may not be as sexy as microprocessors, it is SAS and this episode is Chips and SAS and I believe this is a SAS approach to databases that goes directly at the end user of that data. Now, it’s not the Tableau of it but you can get visualization here. They were quick to point that you can get visualization of the data that to me kind of looked like Tableau-ish. They’re like, “No, no, we interact with Tableau.” There wasn’t a classic Oracle kind of… You know when they’re coming after because they’re going to tell you that they’re coming after you. They’re not. They want to be friends with Tableau. But anyway, pretty impressive Daniel.

Daniel Newman: Yeah, there’s a lot there and of course they’re going to cooperate and coopetition everything. That’s just what’s going on. If you look back at that whole Intel segment, all about coopetition. Right now, Oracle, they have solid relationships in some ways with like a Microsoft through shared zones and stuff that they’re using, but at the same time, they’re both competing for workloads and of course part of it is by delivering a solution that works for people. The autonomous capabilities that you mentioned and the ability to actually handle these different types of databases in a single environment is attractive, and you know what, that’s the kind of innovation you should expect from a company that’s been in the database business long.

Let’s tap on a couple other things though. The company had a number of other announcements. One of the big ones was as their CX portfolio, which is another big part of the business on the application side. Their EVP, Steve Miranda, did a number of announcements along with his team and some big ones in the supply chain space. You know, supply chain management by the way is a pretty hot topic. We’ve talked quite a bit about through what’s going on with chip shortage. But I mean, in every industry right now, including that ship stuck in the Suez Canal, look supply chains matter and when they get broken, the world realizes just how much they matter.

Now Oracle is not going to solve getting that ship turned, unfortunately. We could benefit from that. But what it is trying to do is build tools that are more comprehensive. The announcements they came up with really focused on three things. They focused on orchestration, delivery, and innovation. It’s iterative Pat. The things that they’re doing with their SCM tool is all about adding iterative capabilities to embrace things like IOT and AI and ML, process lifecycle management. So they came up with things like new production scheduling tools, new order management capabilities, so their whole kind of order to cash process has been updated to be smoother in orchestration, and they put a bit of focus on IOT asset monitoring and IOT production monitoring.

So you think about all this industry 4.0 stuff you hear about, well all of those devices at the edge that are part of that supply chain, part of that manufacturing. We keep hearing about these manufacturing, these industrial companies, well that stuff has to end up in software somewhere to be able to be looked at, utilized, and enriched, so Oracle is doing that.

The other thing that it really focused on was the whole logistics and delivery part. They had a new transportation management suite. They’re adding a lot of machine learning. In their transportation management, they put machine learning capabilities for better prediction and transportation, reducing costs. I mean, look getting goods from point A to point B is expensive. I’m the son of a trucker. My dad owned a trucking company. Very important part of our supply chain. It may seem like an old school business, but you know what, all those goods, all that stuff you order from Amazon needs to get from one place to another and its not being delivered by drones just yet. By the way, when it is all drones, you’re going to use some AI, ML, IOT and other tracking to make that work too. So this stuff all makes sense. It’ll evolve as technology evolves.

You know, the last thing was a focus on product lifecycle management, so Oracle has been really focused on keeping updates coming, not getting in that rut of being a licensed software that you get updates once a year, but really doing it on a continuous basis. And from the product lifecycle management standpoint, they’re adding a number of new features just to improve analytics, improve the reporting, revisions, cataloging, and security by the way has been something that’s been focused on Pat.

We probably don’t talk about security enough here, but everything that we’re talking about, chip level, infrastructure level, application level, companies need to be talking more about security. That’s something that I expect from leading companies and so it’s always good to hear about.

Just want to touch on one other really kind of small announcement around Oracle. They did have kind of a fun announcement that actually takes everything we’ve talked about into effect in some way and that was a partnership with Red Bull/Honda racing. Red Bull/Honda racing, which F1, Pat, down in Austin, something that [crosstalk] to attending. This is an end… you think about like jet planes. Well, F1 vehicles have a ton of data they put off and essentially this racing team decided to partner with Oracle, it’s cloud infrastructure, it’s data systems, to be able to manage, enrich, and perfect, the racing team, to improve everything from lap times, to the vehicle designs and builds, to be as competitive as possible within spec. Pretty cool partnership.

And by the way, Red Bull is one of the coolest content companies on the planet. I watched a video the other day of a guy on a parachute, landing through a ski town, skiing on the roofs of buildings. Pat, it was like my mind was blown. This guy lands on the ground, he’s skiing backwards, he pulls his parachute in, okay, pulls a Red Bull out of his jacket, cracks it open, chugs the Red Bull, tosses it into it, and they’re doing all this cool production and then he throws his parachute back up and takes off into the sky again. I mean, this stuff is fun. Anyway, side note on the Red Bull thing. But very cool announcement.

They’re also incorporating all of the CX stack from the F1 standpoint to connect closer to their fans, which is the people that are watching those videos that we mentioned. So they’re really putting the whole Oracle stack into play Pat.

Patrick Moorhead: Do you think we’ll get an invite to F1 here in Austin? What do you think?

Daniel Newman: Why do you think I’m talking about it man? Oracle, are you listening? I want to go see the cars race. I want to hear those combustion engines exploding. When do you think it will be F1 electric?

Patrick Moorhead: You know there is actually an F1 electric series out there that all the big players are in. It just doesn’t get as much play. NVIDIA is big time behind that. Companies like ON Semiconductor, even BMW has a car. But by the way, I think everyone of the cars is the same so it’s not one of these big engineering face offs either. But Daniel, just a final word on this. I just want to point out the huge difference. When you have an Oracle fusion app, literally they’re updated… there’s a quarterly update. Not all of them update, but most of them do and I compare that to an SAP, ERP, or SEM and you’re looking at customers might update once every three to five years. I’m just fascinated with how quickly the company has moved. Now, how do they do it? They did it through acquisition, but that acquisition of Net Suite gave them some time to rebuild their onprem ERP and SEM from the ground up to have a cloud. I’m wondering what happens when Oracle has… they actually have two cloud opportunities of the same application and I wonder at some point do they merge?

Daniel Newman: That’ll be a Net Suite infusion.

Patrick Moorhead: Exactly.

Daniel Newman: …growing in kind of a near… and both a little different. I’ve actually set up and run a Net Suite on a company I ran years ago. It was before Oracle acquired them. But yeah, it’s a growing business and by the way those are two of the fastest growing areas. Mid double digit growth in both areas. Different products, but yeah at some point doesn’t it all have to sort of just become one big suite?

Patrick Moorhead: Yeah, maybe the UI is different, I don’t know, for smaller businesses. I got to tell you, my back office, I picked Google 10 years ago and not Microsoft because Google was just so much more interesting. Now that was more IAS as opposed to business management, but to simplification is key for me for my small business and maybe that’s why Net Suite hangs in there. But sorry to digress. I know we’ve got plenty of other things.

Daniel Newman: Now, here’s the deal, we’ve made it through two topics and we’re 28 minutes in. But we’re going to try to make the next three topics a bit of a lightning round because we’ve got three kind of quick update type things. We’re not going to short change them but we’re talking chips, chips, and chips and our first update’s coming from the Lattice Semiconductor, which is a company we probably don’t talk enough about. Pat, you have been an FPGA bull and this is a company that’s been absolutely capitalizing, and we’ve had Jim Anderson on our show, on this show, who is the CEO. Great guy, doing really interesting things, and there’s a few updates there.

Patrick Moorhead: Yeah, so just really quick background. There’s only a few different types of chips you can have. You can have CPU, GPU, FPGAs, DSP, ASIC, and I’m sure I’ll get hate mail from people telling me there’s more or less, but that’s it. An FPGA is completely programmable. It can be programmable to anything that you want. In fact, when I was at AMD, we used to use FPGAs first creating CPUs, but FPGAs have evolved into very application specific types of things. And oh by the way, it saves you about a year in development versus an ASIC that are a little bit harder to program than a CPU.

So what happens is companies like Lattice will bring out full solution sets with their FPGAs to make it easier for developers to make that happen. That’s exactly what Lattice’s last announcement was. It was on MVISION and Century. So Century is an absolute layer of security that developers might put on sort of a motherboard that it’s first boot enables you to even track that motherboard through the supply chain as it moves from point to point. The first question when somebody is talking about hardware security for me is I ask, “What’s the first chip to boot up?” And what’s so cool about Lattice does is their FPGA, which by the way is on every Intel and AMD motherboard recently, is the first thing and it scans to see if spy chips were put on. It scans root of trust. It’s pretty incredible.

MVISION was updated and this is for what you might think, machine learning vision, on a robot, on a drone, and what they did is they enhanced it with an ISP solution, which gave it more horsepower to do what it needed to do. That’s my story and I’m sticking to it and I’m keeping it brief.

Daniel Newman: Yeah, well we have to because our Six Five became the Six Seven Six today if we actually went in depth. But listen, we love you our audience and when something’s big like this IDM2 strategy, we just got to give it the time. We hope you appreciate all that analysis. A couple more chip updates Pat and the next one was EC2X2GD, another home grown variant of the Graviton family has gone GA. This should be a quick one too because this is really something we talked about a while back, but now it is available and it continues. By the way, all that arm talk, this is where the rubber meets the road.

Patrick Moorhead: Yeah, by the way, what I really appreciated was that this was launched very similarly around when AMD Epic Third Generation was launched.

Yeah exactly, and we know that Ice Lake from Intel is coming up, but essentially Amazon has built their own home-grown general purpose processor. They do a lot of their own process. This is general purpose. It competes with EPIC and Xeon. They’re on their second generation.

But it’s not just about the processor, It has to be married up with different memory levels and networking, and what X2gd are memory optimized instances and the value proposition is delivering up to 55% better price performance compared to current generation X86X1 instances. So hard comparison to what they’re doing versus Intel. And what does memory intensive mean? Hey, it’s database. It’s my SQL, Postgres, it’s in-memory databases, Redis, Memcached. It’s EDA workloads, real-time analytics, caching servers. It is no longer teeny tiny little streaming applications that were supported on first-generation Graviton.

So this is Graviton growing up and going GA at the same time that EPIC came out, which is pretty awesome. Like I said, competition is good for everybody, lowers costs, increases innovation.

Daniel Newman: Yeah absolutely, and why don’t I let you just keep the momentum going. You’re on a roll.

Patrick Moorhead: Oh yeah baby, let’s go into third-

Daniel Newman: I was going to say, you already kind of teed it up, so…

Patrick Moorhead: Yeah, let’s go into third-

Daniel Newman: I’m sitting back, I’m just going to watch this.

Patrick Moorhead: Yeah, so third-generation EPIC general purpose processor completes directly with Xeon and Graviton. Believe it or not, AMD used to be in the CPU market. When I was actually at AMD, AMD had 26% of the entire server market. They’re at 10% now with EPIC, but they had left the market for six or seven years. The market’s different. AMD started this year with cloud and then they moved to… this was really to me the enterprise data center launch, which brought all the software with it and all of the partners that you would expect. The big change here is moving to a new core architecture with Xen 3, and literally that’s how they were able to drive a 20% performance improvement. Now obviously where they beefed up some other elements versus Intel’s current in-market. You’re looking at 50% adders and also where AMD might have a core count increase.

It’s all about timing here, because AMD compared against what’s in market, not what Intel is going to be announcing in the next couple weeks with Ice Lake, but super impressed with what they were able to do here. The other change that they made was memory architecture differences, which allowed each core to address more memory and what that does is that decreases latency and makes it a much better let’s say database processor.

Lenovo came out and said with EPIC, we have scored 100 benchmarking world records, which I just thought was crazy and ludicrous. Yes, there are more than 100 server benchmarks out there and whether its floating point, database, there’s even one for VMware. There’s one for straight spec, for more continuous with IPC, there’s floating point, java virtual machine, which is what most enterprise applications are based off of. You know Daniel, we’re going to have to see the details here. OEMs are ramping up. Cloud vendors are ramping up with EPIC. I don’t believe TSMC can give AMD as much as they need. There you’ve got new Intel stuff going in there, an Intel who still has 90% market share even with multiple generations of world record performance from EPIC, which when we get into the Intel conversation, we’ll talk about maybe why that is.

Daniel Newman: You can see the disappointment on my face. I’m disappointed because you’re talking about these benchmark records, and by the way, cool stuff if that’s your thing. If you’re one of these geek bench people that want to look at this. I’m sure there’s a few CIOs that care about this. I’m pretty sure that entire business of these benchmarks and records though is for everyone in the industry to pat each other’s back about their own situations and lives. It’s like the every kid gets a ribbon thing now. It’s like, “We’re going to come up with 900 benchmarks.” By the way, some analyst firms do this too. It’s actually kind of embarrassing sometimes. They have an award for everything. It’s like, “Are you really giving an award or are you just trying to give somebody some social recognition?”

Anyway, I digress. I can’t help myself Pat. Look, long and short on the whole AMD EPIC third-gen thing, everybody’s going to need a big lift for them to compete, even with the improved performances, AMD is about to go up against Ice Lake as next generation, which is going to be likely very competitive as opposed to what they’re comparing now. The other thing is, and I’ve done a lot of analysis on this in the past Pat, is getting the workloads in Enterprise moved when these companies have big Intel commits. It’s not an easy thing. It has not been an easy thing. Intel has been heavily invested in making sure, and that by the way has a lot to do why that 90+ percent market share still exists.

However, Lisa is doing a great job. Every generation continues to press, and push, and put more pressure on Intel and I expect the battle will rage on. And by the way, that makes it fun because when we’re talking about chips and SAS kicking a… that is the topic we want to talk about. So it’s healthy debate, bring it.

So last topic Pat, this is something we missed last week, it would have been probably our main dive in a normal week, but I get an email… So the week before, Intel’s just doing their thing now. This has got to be Pat, because for a long time, like I said, there just wasn’t this much energy. One thing Intel hasn’t done over the last couple of years is really push back on its critics the way maybe it would have in its earlier life. I don’t know what that was exactly, but Intel nabbed the Mac to come be its spokesperson. And by the way, Apple has nabbed part of that advertising campaign and flipped it around. They’re doing their thing.

But in what I call a Sprint like moment from Verizon when they got the “can you hear me” guy to go from Verizon to Spring, Intel grabbed Justin Long, who is not only known as the Mac, but also he’s been in lots of different movies, and to come and kind of do a whole punchy, fun, not really contentious, but competitive, but definitely in a form that hasn’t been Intel for a long time, kind of snapping back at the M1.

And Pat, you by the way are the M1 guy, and many other things, but if you’ve read Pat’s Forbes column, he’s written some very in depth pieces about M1 versus X86 and what’s going on in that ecosystem. I think you have like one of the most read pieces on the planet on that topic if I’m not mistaken. Yes, that’s a humble brag, but it doesn’t count if I do it for you.

But in all seriousness, I watch these ads Pat, and I giggled. I giggled. I still like the one where… and I showed these in a different cast I did last week, but where Justin Long has the kid and he’s gaming at his PC, and he’s gaming and he’s gaming and he looks over and there’s a Mac station, and he goes, “Why is no one gaming over on the Mac,” and then the gamer looks at him and he goes, “Nobody games on a Mac,” and then he goes, “Oh, I knew that.” It just kind of made me smile, but if he’s right or wrong, I just thought it was really clever, Pat. My kind of thought was it was clever. It was a clever play. It wasn’t the most cutting edge thing ever, but just an interesting way to say, “We’re back, we’re confident. We’re not going to just take this migration laying down.”

Patrick Moorhead: Yeah, so there are different audiences of people who have differing views of caring on this. You have the people who will only buy a Mac and would never even get near a Windows machine. And then there are people who have Windows machines who would never even think of having a Mac. And then you have the people who are potentially switchers in the middle. This campaign was targeted at the potential switchers and also to give OEMs a little bit more confidence, which I think is good. I love that the Apple crowd kind of came out, and I think their biggest complaint out there was that Apple did some compositing on the videos to make the Macs look better than they actually are. So if that’s the extent of the complaints, I think that’s pretty weak. Kind of fishing for something, looking for something that’s wrong. Listen, it wasn’t perfect, but I would say that most of it was very true.

I have personally found software configurations on the M1 that last just as long as Intel PCs, on particularly the Evo ones. Check. You can get Windows with touch screens. Yes. You can get Windows devices that have much more variations. You can get ones that are leather. You can get ones that are pleather. You can get plastic. I mean, that’s all true. Everything just works. Yes, every peripheral just works, caveat Windows 10. There are devices that I’ve found like printers, SSD cards with fingerprint readers on them that did not work with the M1 Mac. All true. Games. The top AAA games, most of them do not work on a Mac, so all true.

Now, things that were kind of in the middle and if you wanted to scrutinize it. The dongle thing, yes. The Dell XPS 13 I need dongles for because it’s all USBC thunderbolt. Yeah, Macs can play some AAA titles and you can actually rig your display to have more than one external display by installing the display length software. Is it the same card depth frequency? No. Is it supported by Apple? No, but you can rig it up. So, I just have to say that in the spirit of open and honesty and what we call accuracy that I know that our audience needs from us. But overall I think they’re doing… they’re accomplishing what they need to accomplish. I think it gives other people in Intel’s ecosystem, partners, ISVs and when I combine this with what I thought was a freaking hilarious commercial that Microsoft run, it was good.

Final point, successful campaigns like this need to combine humor, snark, and truth and for the most part on this campaign I’m seeing all three. Could they screw it up? Yes, but from what I’ve seen so far I think it’s very impactful to those audiences that it matters to.

Daniel Newman: Yeah absolutely look and nobody doubts for a moment the cleverness of Apple nor the quality. If I do kind of a car analogy, I look at Apple’s kind of like Tesla. You know, you got each flavor. There’s only a couple of options and people still love it and they buy it and they use it and they tout it and they are passionately connected to the brand. If you do like that car analogy, you could look at you know the PCs more like a BMW. You got a lot of variants of the vehicles. You got lots of variance within the vehicles. You can have bigger or smaller. If you want an SUV, there’s eight flavors of it, and then on top of the eight flavors, there’s eight more trims of it. And everyone’s different.

But in the end the whole nabbing the Mac thing was… what I really took away from it is under Pat, we started and we’ll kind of finish this… under CEO Pat Gelsinger, this is a company that is no longer going to be willing to just kind of sit idle when others are poking the bear. They’ve done a lot of good things and I even mentioned this in my most recent [inaudible], Bob Swan did a lot of good things during his time there, but some of them didn’t get noticed because they were pretty humble about it.

In a world where everybody’s out in front all the time beating their chest, touting their worth, it’s a good time for Intel as well to participate and I like this because it wasn’t obtuse, it wasn’t offensive, it wasn’t over the top, and it even played on some history, and I think its going to work out well for the company. But we, just like the IDM2 strategy, are going to have to wait and see.

Patrick Moorhead: Well, there you go. There you have it. Chips and SAS kicking… you say it. Yeah, yeah. He didn’t say it.

Daniel Newman: I don’t want to get canceled or muted.

Patrick Moorhead: This is the Six Eight today. You know what, maybe that’s what were just going to call it going forward.

Daniel Newman: Probably not.

Patrick Moorhead: Listen hey, if the All In guys can go for an hour and 20 minutes, and I get it, their billionaires and we’re not, but we cover some different stuff, but if they can get away with it every week, we can go 50 minutes one week.

Daniel Newman: Just spend a little more time on the bike, the treadmill, the elliptical, whatever you’re doing when you’re listening to us, we do appreciate you. We really do love our audience and we love the growth that we’ve seen. 70 episodes Pat and by the way, keep your eyes peeled, the Six Five Summit 2021 is going to be coming your way. More info on that pretty soon. We’ve got a lineup that you will be excited about. Remember last year we had Michael Dale, Lisa Sue, Doug Merrit from Splunk, incoming CEO Christiano Lamar from Qualcomm. Were going to have another list like that, people that are going to garner your attention, so we hope you will sign up when we are ready and we let you know. But for this episode of the Six Five Podcast, Chips and SAS kicking a… we got to say goodbye. Hit that subscribe button. Check out the show notes. Read all the articles. We’ll be back. We’ll have more for you soon, but for now we’re out.

About the Author

Daniel Newman is the Principal Analyst of Futurum Research and the CEO of Broadsuite Media Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise. Read Full Bio