Hector Ruiz, chief executive of chip-maker AMD, freely admits that his company was not the first name to come to mind in discussions about enterprise computing.
"If you roll back five years we were a consumer desktop company, particularly in the low end," he recalls.
That has changed. This week, IBM announced a new line up of five enterprise-class servers, which will all be powered by AMD's Opteron chips. AMD already supplies microchips to Sun Microsystems for its x86 servers, to HP and has even persuaded Intel die-hard Dell to develop Opteron-powered servers.
This week's announcement with IBM may well turn out to be as significant as IBM's original decision to develop an Opteron-based server in 2003. Despite the early promise of that partnership, IBM initially only produced a single Opteron based machine, focusing instead on Intel processors. The deal's symbolic importance outweighed the number of IBM products on the market.
"It was critical for us to have a customer the calibre of IBM to adopt our technology that is aimed at the enterprise and servers," says Ruiz.
Since then, the computing landscape has changed, seemingly in AMD's favour. The Opteron offers IBM some useful options. Sun Microsystems, for example, has made much of the low power usage of its Opteron-based servers. With its latest AMD machines, IBM looks set to do likewise.
"One reason we are putting so much emphasis on performance per watt is that as [computer] applications become more demanding, so to do the thermal requirements," says Bill Zeitler, senior vice president of IBM's systems and technology group.
"AMD's 68 watt processors on blades are really strong from a performance per Watt point of view."
This is not necessarily something that AMD's engineers would have focused on when the company was focused mostly on desktop PCs: home computer users are not especially concerned about power issues.
"The [blade] configuration is much more demanding from a power efficiency point of view," says Ruiz. "Our approach is that we have to design for the most demanding environments, so we have to be as efficient as we can in terms of power per watt." IBM was also attracted to Opteron, though, because of its backwards compatibility with 32-bit, x86 applications.
AMD's relationship with IBM, however, is about more than supplying microprocessors. In fact, AMD started to work with IBM on chip development before IBM started to by AMD chips.
Five years ago, AMD shut down its R&D operations and moved its engineers to IBM's Fishkills R&D and manufacturing site, in New York State.
"We were looking for ways, as a small company, to leverage our R&D in basic technology," says Ruiz. The relationship has clearly worked: AMD is building its new 300 nanometre chip plant in Albany, not far from IBM's operation.
"In manufacturing, there is a two-way transfer of technology," says Ruiz. "All of our [chip] packaging technology is derived from IBM and there has been a significant amount of manufacturing transfer from AMD to IBM."
IBM's decision to launch Opteron-based machines will also help AMD to gain the scale that is all important to a microprocessor maker. The new servers will be based around the Opteron Ref F, but higher production volumes will also make it easier for AMD to accommodate industry demand for more specialist chips.
"The industry now seems to be looking for the best solutions for different segments," says Ruiz.
"At the entry level, people want basic computing for the small office or the home. That can be a $500 computer."
"But a gaming person will want a different platform. This industry tends to go for commoditisation, fragmentation, de-commoditisation and then commoditisation again. Gaming was a niche, but it is now a market that is growing rapidly."
This is a market that IBM is addressing with its Cell processor, developed together with Sony; IBM is also considering Cell blades that could work alongside its PowerPC, Intel and AMD products.
But for Ruiz, continuing to build on AMD's 26 to 27 per cent of the server market means being taken seriously by enterprise IT buyers. That means working with industry standards, although Ruiz is by no means opposed to driving those standards forward, as AMD has done with multi-core chips.
"Everything we do is driven by standards," he says. "Even as we move towards architectures that are multi-core and heterogenous, the technology still has to follow some standard rules.
