What are Your Server Customers Looking For? It Depends on Who They Are

While hyperscalers and enterprises both buy servers powered by the latest CPUs, their purchase decisions are based on very different criteria. Knowing who you’re selling to, and what they’re looking for, can make all the difference.

  • March 16, 2023 | Author: Peter Krass
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Think all buyers of servers powered by the latest-generation CPUs are all looking for the same thing? Think again.
It pays to think of these customers as falling into one of two major groups. On the one hand are the so-called hyperscalers, those large providers of public cloud services. On the other are CIOs and other IT executives at large enterprises who are looking to improve their on-premises data centers. 
Customers in both groups are serious buyers of the latest, greatest servers. But their buying criteria? Two very different things.
Hyperscalers: TCO, x86, VM
When it comes to cutting-edge servers, hyperscalers including Amazon Web Services (AWS), Microsoft Azure and Google Cloud are attracted to the cost advantage.
As Mark Papermaster, chief technology officer at AMD, explained in a recent technology conference sponsored by Morgan Stanley, “For the hyperscalers, new server processors are an easy transition. Because they’re massive buyers, hyperscalers see the TCO [total cost of ownership] advantage.”
Hyperscalers also like the fact that most if not all new server CPUs still adhere to the x86 family of instruction-set architectures. “For their workloads,” Papermaster said, “it lifts and shifts.”
Big hyperscalers are also big implementers of containers and virtual machines. That’s an efficient workload application for today’s high-density CPUs. The higher the CPU density, the more VMs can be supported on a single server. 
For example, AMD’s 4th gen EPYC processors (formerly code-named Genoa) pack in 96 cores, or 50% more than the previous generation. That kind of density suits hyperscalers well, because they have such extensive inventories of VMs.
Enterprise CIOs: different priorities
For CIOs and other enterprise IT executives, server priorities and buying criteria are quite different. These buyers are looking mainly for ease of migration, broad ecosystem support, robust security and energy efficiency (which can also be a component of TCO). 
CIOs also need to keep their CFOs and boards happy, so they’re also looking for a clear and easily explainable return on investment (ROI). They may also need to tie this calculation to their organization’s strategic goals. For example, if a company were looking to increase its market share, the CIO might want to explain how purchasing new servers could help achieve that goal. 
One relatively new and increasingly important priority is energy efficiency. Enterprises increasingly need to demonstrate their support for “green” initiatives. One way a company can do that is by showing how their computer technology gets more done with less electric power.
Also, many data centers are already receiving as much electric power as they’re configured for. In other words, they can’t add power to get more work done. But they can add energy-efficient servers able to get more work done with the same or even less power than the systems they replace.
A third group, too
During his recent Morgan Stanley presentation, Papermaster of AMD also discussed a third group of server buyers: Organizations with hybrid IT orchestrations, both cloud and on-premises, that want the ability to move workloads back and forth. Essentially, this means mimicking the cloud in an on-prem environment.
Looking ahead, Papermaster discussed a forthcoming EPYC processor, code-named Bergamo, which he said is “right on track” to ship in this year’s first half. 
The new CPU will be aimed at cloud-native applications that need high levels of both throughput and per-socket performance. As previously announced, Bergamo will have up to 128 “Zen 4c” cores, and will come with the same software and security features as Genoa. 
“We listen to our customers,” Papermaster said, “and we see where workloads are going.” That’s a good practice for channel partners, too.
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