> Out of the smaller cloud providers, IBM and Oracle wouldn't have needed to buy a CPU company, they'd both been designing top tier CPUs for decades.
CPUs that need an insane amount of power and have barely any applications in mainstream computing. Not exactly a good fit to provide to customers.
> The price differential on AWS isn't coming from any kind of intrinsic advantage, but from Amazon subsidizing their ARM-based compute for strategic reasons.
By running their own CPUs, AWS doesn't have to rely on Intel's ability and willingness to ship stuff and they don't have to pay Intel's margin either.
> CPUs that need an insane amount of power and have barely any applications in mainstream computing. Not exactly a good fit to provide to customers.
Obviously there's no real market for Sparc or POWER in the public cloud, and there probably never was a time window for creating a viable market either.
But if they'd wanted to get into the server ARM market, they would have had the expertise in-house, there was no need to buy out some startup for the team. That their expertise was on CPUs with different microarchitectures, but that shouldn't matter all that much (didn't matter when Apple bought PA Semi to work on ARM instead of PowerPC).
> By running their own CPUs, AWS doesn't have to rely on Intel's ability and willingness to ship stuff and they don't have to pay Intel's margin either.
Right, being in control of your own destiny rather than being tied to a single supplier is a big deal, and that's one example of what I meant by the strategic reasons. Having more leverage over Intel and AMD on pricing is another. Making it harder for some customers to move their workloads away (because they're bought into ARM and other companies don't have compelling ARM offerings) is a potential third.
Not having to pay Intel's margins is a potential advantage, but requires reaching sufficient scale to offset the costs of running your own CPU team.
But for any of this to make sense, they need to successfully move a large proportion of their customers over to ARM. Just having the servers available and nobody using them does nothing. That's exactly the kind of situation where you'd want to subsidize the prices for the ARM servers and build up the customer base. That's the case even if ARM has some intrinsic perf/$ advantage; you'd still want to subsidize it to the point where you're able to saturate your ability to manufacture and install ARM servers.
CPUs that need an insane amount of power and have barely any applications in mainstream computing. Not exactly a good fit to provide to customers.
> The price differential on AWS isn't coming from any kind of intrinsic advantage, but from Amazon subsidizing their ARM-based compute for strategic reasons.
By running their own CPUs, AWS doesn't have to rely on Intel's ability and willingness to ship stuff and they don't have to pay Intel's margin either.