Shipments of ARM processor chips are likely to grow from 68% of all processor shipments in 2012 to 85% in 2016, and 96% in 2022, portending a major sea change in core IT technology and the end of the Intel era at least in end-user devices, writes Wikibon CTO David Floyer in his latest Wikibon report: “Intel Post-PC Blues and Client Support in Software-led Infrastructure” and its conclusion, “Hyperscale and Software-led Infrastructure”.
Intel’s Q4 revenues were down 3% to 13.5 billion and profits down 27% overall, while PC revenues fell 6% year-on-year, he notes. Meanwhile, 780 million mostly ARM-powered post-PC devices shipped, the result of a consumer market shift from desktop and laptop computers to ARM-powered smartphones and tablets. The question, he said, is whether this is a short-term decrease in PC chip revenues caused by the recession and stretched PC refresh cycles, or the start of something more profound. Floyer comes down on the more profound side and asks:
- What are the strategic ramifications if or when traditional PCs are no longer the default client technology to be supported by data center infrastructure?
- If ARM processors and technology become dominant in the smart client device and PC market, will history repeat itself with the emergence of these chips in data center servers?
As major steps in this shift, Floyer predicts that:
- Licensees of ARM technologies will successfully introduce 64-bit Cortex A53 & A57 in early 2014;
- Apple will migrate its Mac architecture from Intel to ARM by early 2015;
- Microsoft will move Windows for the desktop from Intel to ARM by early 2017.
- Microsoft will eventually disaggregate its divisions, abandoning PC and tablet development and treating the client OS as a cash cow, allowing Office and other software to run on any platform and refocusing the company on its more successful data center software business.
While Microsoft will continue to grow in the new hardware environment, Intel is seriously threatened by this trend, which ironically duplicates Intel’s own strategy for dominating the computer chip business in the 1990s. Today ARM client device shipments are 2.2X those of Intel X86 devices, and this is likely to grow as these devices invade the corporate marketplace under BYOD. If that strategy, backed by VDI and Software-as-a-Service that delivers business functionality over the network to these devices, wins over Microsoft’s belated Windows 8 challenge, that gap will increase.
Intel will hold the high end of the market due to the greater functionality of 64-bit x86 chips over 32-bit ARM chips. But as ARM volumes grow, and as a 64-bit version that is less expensive and uses less power than the x86 appears, they will inevitably start eating the end-user market from the bottom. Intel will be forced to retreat to focus on low-end servers to try to block ARM from the data center. This is exactly what happened when Intel took over end-user computing and used the high volume it achieved to undercut RISC in the data center. The result is that today the only other high-end chip maker left is IBM with PowerPC.
So what should CIOs do to prepare for and manage this major shift in hardware technology? Floyer suggests that they should:
- Manage BYOD to reduce costs and improve user productivity;
- Focus on improving authentication and security services;
- Implement strategies where all user data is reflected continuously back into data center cloud servers;
- Accelerate use of VDI services for large groups of desktop deployments and for providing access to legacy x86 client applications.
As with all Wikibon research, this report is available in its entirety on the public Wikibon Web site. IT professionals are invited to register for membership in the Wikibon community. This allows them to comment on research and publish their own Professional Alerts, tips, questions, and relevant white papers. It also subscribes them to invitations to the periodic Peer Incite meetings, at which their peers discuss the solutions they have found to real-world problems, and to the Peer Incite Newsletter, in which Wikibon and outside experts analyze aspects of the subjects discussed in these meetings.
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