Summary Bullets:
- Qualcomm announced a plan to move into the server space at its 2014 Financial Analyst Meeting
- While ARM expertise will play in Qualcomm’s favor, it may take a while for that to matter to buyers
Last week, Qualcomm used its 2014 Financial Analyst Meeting to signal an entry into the server market. You can be completely forgiven for not paying attention: it doesn’t seem like the media picked up on this much, and the notion of Qualcomm – a vendor known best for supplying silicon into mobile and connected deices – moving into a crowded server chipset space might seem like a typo or misunderstanding as much as it does a business reality.
Alas, it’s true. It’s also not that surprising.
At a very basic level, the logic is super-simple. Cloud business and architecture evolutions – including the move towards NFV in the telecom space – promise to drive server sales through the medium-term. ARM architectures have long been touted as critical for supporting scalable, energy-efficient server designs and data center growth. Qualcomm, thanks to its position with mobile and connected devices, is one of the market’s dominant ARM-based silicon providers. Where there’s expertise and a market that expertise plays into, it only makes sense to connect the dots, right?
Maybe.
Qualcomm’s position in the ARM ecosystem cannot be denied. Near-term market interest in ARM-based servers is another topic. Yes, ARM’s focus on energy efficiency is a major selling point. Yet, whenever I ask telecom vendors how much energy they’re putting towards ARM in their NFV efforts, the answer is essentially, “none.” The rationale? Operators just aren’t asking for ARM-based solutions yet. Admittedly, this is a relatively narrow anecdote. It’s telling, nonetheless. In their NFV efforts, after all, carriers are responding to the efficiencies obtained by web-scale and data center players. If neither party looks to be too excited about ARM in the near-term, what does that mean for Qualcomm?
While that was a rhetorical question, I can provide something of an answer: nothing. Connected device sales and technology development will keep the company busy for some time. Time enough, in theory, to build up its server credibility and allow for ARM demand to grow.