David Versus Goliath Or ARM Versus Intel
I have just read this article in the Motley Fool about David or ARM Holdings taking on Goliath or Intel.
The article has been given the title The Reason ARM Holdings Is Dominating Intel, but interestingly the web page is called Why ARM Holdings Destined Destroy Intel. This name is chosen by the blogging software, from the first title used for the article taking out the short connecting words, like is and to. Look at the title and web address of this post.
But I suppose someone in management at The Motley Fool felt it was a bit provocative.
I don’t, as I think Intel is doomed.
As we need to process and store more and more data, one of the biggest limitations will be the amount of power needed.
As an example look at the average smart phone. It may have lots of features and processing power, but this often comes at the price of a short period of operation before the phone needs recharging. Now virtually all smart phones are built around ARM chips, as the Intel chips use too much power. This power consumption of ARM chips is one of the main reasons they are dominant in portable devices like smart phones and tablets.
The vast server farms have a similar problem and I’ve read that about ten percent of the world’s electricity consumption could be used to power them in the future. So a low-power route would be to everybody’s advantage. And ARM is the low power processor, although Intel are starting to design processors that are more efficient. Intel might be able to put up a strong fight, but I believe there’s one big reason, why it won’t.
Intel is a conservative company, that sticks to a philosophy that has worked for years. And getting companies with a vast investment in a proven philosophy to change, when the writing appears on the wall is not easy! Especially, when you are selling product to equally conservative companies, who don’t want to change their philosophies.
Let’s say you are a server manufacturer like Hewlett-Packard. You know you have to go with lower powered processors to maintain your market share.
You have two choices; wait for Intel’s product to arrive or design your own low-power processors around the ARM technology and get them manufactured by any one of a number of companies.
The second approach is probably the one with the lowest risk, so you at least have to try it. If it fails, you can still go with Intel’s new low power chips.
If you don’t succeed, then it is absolutely certain that someone else will develop a low power server using ARM technology. So your traditional market will go bang anyway!
It also has the great advantage, that if you do it successfully, Intel will start to worry, that you’ll go down the same route with all the other chips you buy from them. so you may get better prices for the other chips.
If you don’t succeed, then it is absolutely certain that someone else will develop a low power server using ARM technology. So your traditional market will go bang anyway!
The main loser in either scenario is Intel.
You have to remember how dominant IBM was in the 1960s. They had a philosophy that worked well, but where are they now! They’re just a shadow of their former selves where hardware is concerned. Smaller and more innovative companies chipped away at their market.
I would also throw in a view on how hardware designers and programmers think. Basically, ninety percent are anarchists, who believe in destroy and rebuild much better, so they will always decry the architecture of companies like Intel and go for something that appeals to their dark side.
ARM was that forbidden fruit that only a few companies used. But now it is so mainstream, you can satisfy your own preferences and those of management as well.
In five or ten years time, they’ll be writing articles about how the new processor on the block is going to destroy ARM.
The Onward March of ARM
I’ve always kept a watching brief for ARM Holdings. Partly because it was local to where I lived, but mainly because one of the founders was Robin Saxby, who was in my year at Liverpool University.
I have just read this report in Forbes. There are some facts in that report, that will shape the world. Consider this abstract.
East (The ARM CEO) notes that by some estimates IT equipment now suck down 10% of the world electric power already; he also notes that there are estimates that in the next few years that the amount of data creates could increase 100x, or maybe 1000x. Even at 10x, he notes, we’re going to run out of power at the current consumption rates. “They are going to switch to ARM because it is all about the power,” he says. “The digital world is not going to become a reality unless servers and network infrastructure is designed in a different way….ARM is a tool in the toolbox for making this stuff more sustainable.”
Generation of electricity is one of the causes of global warming, as so much is generated by fossil fuels. So a small company in Cambridge will become a major player in the fight, just because its chip designs are so much more efficient.
Reading the Forbes article, says to me, that ARM can only get an awful lot bigger. But it is all about brain power and not about manufacturing in the traditional sense. On the other hand, ARM has been and will continue to be a company, whose technology enables other companies to start up in innumerable fields.
Disruptive Innovation
I’ve not heard the term before, but read this article. It starts with this question and answer.
Question: what do these companies have in common?
Skype, Spotify, Marks and Spencer, Whipcar, Zopa, Zilok, Kiva, Patagonia, Kickstarter, Café Direct, Taskrabbit, Buzzcar and InterfaceFLOR.
Two of my favourite innovators; Zopa and Kiva are mentioned in the same breath as quite a few companies like, Skype, Spotify and M&S.
If the article has a fault, it’s that it misses out a couple of well known names, who the writer would call disruptive innovators.
I would have thought ARM Holdings and Dyson should be on the list. And I would think that a certain company called Metier Management Systems was one of the first! So we were only a shark in a small pond, but we completely rebuilt the pond.
Intel’s Simple Smart Phone
That’s what they say it is. But I doubt it will beat a Nokia 6310i. Read about it here.
But Intel have never eaten ARM yet on electricity usage for a given power.
The ARM Phillosophy
Tudor Brown has stepped down as president of ARM Holdings, the chip designer. This article on the BBC,explains the company and its philosophy.
It is a business model that should be copied. It’s certainly worked!
There is a Black Market for the New iPad
I’ve never got this thing about Apple products. So when I see there’s now a black market for iPads in last night’s Evening Standard, I’m reminded of the phrase about there’s one born every minute.
The full article is here.
What happens if the computer you buy, is the rare one that fails?
I sometimes think that the only good thing about Apple is that every product sold means a royalty for a company called ARM in Cambridge. And that can’t hurt the British economy!
Has ARM Cracked the Internet of Things?
Probably not yet, but reports like this one are circulating on the Web, that they’ve made a good start on the problem of solving the Internet of Things.
To crack the problem, you need a very small chip, which uses virtually no power. Both of these are ARM‘s specialities.
The Anonymous Widower 