It's early days for ARM chips in servers, and it doesn't seem like Qualcomm is in danger of being left behind. A few big companies have been kicking the tires with ARM servers, including PayPal and Baidu, but the market is still broadly in the testing phase, said Patrick Moorhead, lead analyst at Moor Insights & Strategy.
One of the biggest challenges is that the software stack needs to mature, he said.
Nathan Brookwood, principal analyst at Insight64, differentiates between two classes of hyperscale customers. Giants like Facebook and Google design their own servers and write their own software. For those companies, moving to a new architecture is more feasible if they see sufficient benefits, he said.
But service providers like Amazon and Microsoft, with AWS and Azure, are running workloads for customers who developed their software for x86 servers. Those will be harder to move over.
In addition, Intel has responded to ARM with low-power versions of its Xeon chip, and with other server processors based on its Atom core, which was originally designed for mobile devices.
"You can’t look at Intel’s product roadmap and say they’re missing something," Moorhead said.
Still, ARM's model of licensing its architecture to multiple vendors makes it easier for a challenger to x86 to emerge, Brookwood said.
"ARM is really the only alternative for companies that want to do something unique. You have everyone competing within this common ecosystem, and that's a game-changer," he said.
Big service providers are often reluctant to talk about what they do in their data centers, but some companies have been kicking the tires with ARM servers. AppliedMicro said this year that PayPal has deployed its ARM chips in servers, and Marvell has said Baidu is using its ARM products.
French hosting company Online, a subsidiary of telecom giant Iliad, has also reportedly build a bare-metal cloud based on thousands of ARM servers.
Driving these companies is a desire to cut energy costs and make better use of power in their data centers.
"The limiting factor is how much power you can get in the building," Gavrielov of Xilinx said. "If you can come up with a low-power solution, that will be very attractive to them."
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