Forces in Action

Remember when Itanium was first announced? Articles about the future Intel processor and its architecture - IA-64, also known as EPIC, mushroomed overnight. Most of these explained that the desktop wasn't going to see IA-64 any time soon, that it was reserved for the far future and that we'd be using IA-32 for a long time. Yet, IA-64 and Itanium were clearly destined for the PC sooner or later. If things had gone according to plan, there would be no 64-bit desktops right now and Itanium would be a successful server processor. Years down the road, the completely proprietary technology would eventually move down to the PC, shutting AMD out. Currently AMD has a license agreement with Intel stretching back to the late 70s which permits AMD to make x86 processors. With EPIC, Intel would be free of the competition.

That's not to say that if AMD was in Intel's position, it wouldn't have tried to do something similar. No, the above example illustrates one of the two major forces driving both companies right now.

The incredibly fierce competition between the two has seen AMD claw its way up into the high-end segment and the low-end server market, areas formerly owned completely by Intel. Athlon FX processors are just as expensive as Intel's Pentium 4 Extreme Editions. Opterons compete head-to-head with Xeons. Though Intel dominates market share and sales, it no longer has the exclusive ability to rely on its high-end hardware to beef up its margins and give it a marketing edge.

AMD is now approaching the point where it can directly challenge Intel and wrest the future of x86 development from the bigger company. Arguably, it has already forced Intel onto the 64-bit x86 path.

This illustrates the second force acting on both companies.

You see, the first force is divergence. Both companies want completely proprietary platforms that they can control and own in full. This, they hope, will permit a virtual monopoly on the desktop similar to what Intel enjoyed in the late 80s and early 90s. Remember the days when a top-of-the-line Intel desktop chip cost $1000 simply because it was top-of-the-line? It didn't have special hardware like an Athlon FX or P4EE, it wasn't limited in availability, it simply cost $1000 because Intel said it cost that much.

The cut-throat competition between AMD and Intel is leading both to try to grab for that kind of market security.

On the other hand, neither company can afford to be left behind on the features front. Intel has SSE3? AMD must have it. AMD has 64-bit extensions? Intel must have it. This converging force is, at the moment, stronger than divergence. Neither company is in position to drive the market in a completely different, proprietary direction. Perhaps both are working on such a solution, perhaps not. For all we know, each has something ready and is just waiting for the right time.

What I can guarantee is that sooner or later, one of the two (or even a third platform), will win.