
The Huge Premium Intel Is Charging for Skylake Xeons - Katydid
https://www.nextplatform.com/2017/09/01/huge-premium-intel-charging-skylake-xeons/
======
std_throwaway
Q: Why is Intel charging so much?

A: Because enough people pay.

Q: Why do people pay so much? Why do they pay a high premium for top
performance?

A: Because, considering all factors, it's worth that much for them. For many
it's too much but for many others it's ok.

Q: But it's the same silicon!

A: Manufacturing cost plays little role when the price is not dictated by a
race to the bottom between different manufactures. Instead, marketing, market
segmentation and customer value are the cost determining factors.

~~~
ajross
That's really not what the article is about at all. It's talking about the
history of the tech industry and associating this kind of price motion with
"peak" revenue for given hardware products.

Your same answer would apply to IBM's mainframes in 1990 and Sun's servers in
2001 too, and the point of the article is to associate Intel's current
position with those products, which clearly reached peaks at those moments.

Personally I don't really buy it completely either, but quipping "because the
market!" as an answer is missing the point. The article is about what that
market desire _means_ for future revenue.

~~~
bsder
One thing missing from the comparison to IBM and Sun is that precisely because
those companies made things so expensive people _started_ looking for
alternatives.

The ES/9000's were really good machines for the time. Had IBM not raped people
on those, companies might have stuck with them for a little longer. The AS/400
was priced more reasonably and people _loved_ those. You couldn't get someone
with an AS/400 to move to a Unix workstation if you used a nuclear bomb.

As for Sun in 2001, the problem was that they were so absurdly overpriced and
underpowered that commodity x86 simply blew it away. If I didn't have direct
knowledge of the dysfunction that was Sun at the time, you would have thought
they were taking kickbacks from Oracle, Cadence, Synopsys, etc. to limit
performance. (Explanation: Oracle, Cadence, Synopsys, etc. all had very
expensive software packages that were licensed per processor core per year and
effectively only ran on Sparc. So, the lower the performance of the processor,
the more cores you needed and the more expensive your license to Oracle, et
al.)

~~~
jdub
"raped" is not an appropriate word to use in the context of this discussion.
Please try to be more considerate.

~~~
gm3dmo
"I bought an IBM/Sun server and the salesman ripped my face off". Should
adequately describe server pricing strategies.

------
gigatexal
In an interesting (to me at least) move intel instead of competing on price
when AMD put out a competitive offering they decided to keep prices the same
more or less or increase them by adding value. Faster AVX units, more cores,
more SKUs (not sure about that last one). And while intel has margins to
maintain AMD has put features into their chips for years. For example AES has
been shipping in most every desktop and server CPU while only some intel ones
get it. Most AMD chips can do VT-D etc while the same feature is relegated to
higher end chips generally on intel.

~~~
simias
I could be wrong but I assume that there's enough inertia in the high-end
business-to-business side of things (the part that matters for high-end server
processors) that they probably can keep milking that cow for a few years more.

People who have only been buying Intel CPU in the last decade won't jump ship
immediately. Nobody gets fired for buying Intel CPUs, at least until very
recently. You know you won't have compatibility issues etc...

Of course within the next few years Intel will have to react somehow, either
by outperforming AMD significantly to justify the premium or by slashing
prices.

~~~
jsolson
I suspect anyone ordering top-bin CPU skus by the pallet-load has an ongoing
program for evaluating performance-normalized TCO of at least a few candidate
platforms based around a few candidate processors.

~~~
gsnedders
Heck, why has Google been investing heavily in OpenPOWER? I bet it's as much
as keeping the option there and making it as attractive as possible: gives
them a far stronger negotiating position with Intel.

------
throw2016
Most markets feel comfortable and safe with Intel.

AMD will have to go through the tough adoption curve of early adopters to
mature markets and while this happens Intel has relatively free reign with
their pricing and value.

Markets with long established leaders have the additional burden of too many
vested interests, misinformation and dirty tricks. However if AMD continues to
deliver the naysayers will eventually lose credibility.

~~~
BoorishBears
AMD fans like to separate RTG from AMD, but anecdotally, I just got a Vega 64
GPU and it's horrible. Loud, constant crashes, my desktop freezes when a video
starts playing, etc.

Stuff like that makes me unwilling to go with AMD when I have a choice. I view
them as offering competitive performance on paper but completely falling short
when it comes to reliability.

~~~
quickben
On another hand, in the cpu space, I went to top of the line Intel CPU
overheating and throttling, to 8 core Ryzen, doing 45 celsius at 100 percent
load and almost 4ghz across 8 cores.

Stuff like Intel unable to perform below 80 degrees on 4 cores, makes people
switch _with ease_.

~~~
BoorishBears
The top of the line Intel CPU comparable to an 8 core Ryzen CPU is probably
the 7700k, which has a higher absolute power draw "ceiling", but also has
better performance and higher clocks to match.

I think Intel's value based on performance isn't good compared to Ryzen, but
the product isn't inherently flawed, and that combined with AMD's shaky
history is enough to keep myself, and lots of people I know from switching.
(Right now stories of RMAs for the Risen GCC crash bug taking ages are popping
up)

~~~
sliken
7700k seems kinda overpriced. Why not pay $40 more for the i7-7800X and get
50% more cores and double the memory bandwidth/channels?

~~~
BoorishBears
Plenty of reasons:

Higher base clock on the 7700k, biggest reason for entertainment alongside:

Higher OC potential (back in the 4790k days 5Ghz on air was something else,
for the 7700k not getting 5Ghz is considered "losing the silicon lottery")

Cheapest 7800X motherboard is 100$ more than cheapest 7700k motherboards
(which are still quite good) because X299 is a HEDT platform

Most entertainment machines won't benefit from quad channel over dual channel
in a meaningful way.

The 7700k is generally regarded as the fastest gaming CPU available, that's
why so many benchmarks use it. I'm pretty sure AMD used it to showcase Vega
because even if it becomes a bottleneck, no other CPU on the market can be
"less of a bottneck"

And I'll add, this is all with my entertainment/gaming hat on.

For a dev machine where I'd expect to work with compiled languages or
compiling OSes I'd definitely go with more cores.

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csdreamer7
With the concentration of server buying by AWS I am surprised Intel believes
it can get away with this. AWS has the expertise and the incentive to push for
supporting a competitor that offers a superior value.

~~~
stu2010
I'd bet that the cloud-scale customers like AWS negotiate pricing that has
very little to do with the published list price of these CPUs.

~~~
ethbro
And I think this is possibly one reason for the pricing. When a >50%
(guessing, any better numbers?) of new chip sales volume comes from a few
hyperscale buyers with individually negotiated contracts, you're far more
flexible with what you do for the remainder.

Heck, Intel might even not really have the production volume on all SKUs to
sell to non-hyperscale! And if that's true, then why would they do anything
other than milk the few customers it deigns to sell to?

~~~
tachyonbeam
That could be one reason why it's priced so high: because they wouldn't be
able to make enough to meet demand otherwise. They can price it extremely high
to keep demand under control, and negotiate special pricing with a few
selected customers that they really care about pleasing.

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imtringued
Server CPUs are way too cheap compared to the remaining parts of the server.
Paying 10% more in exchange for software compatibility is a steal.

~~~
Retric
What software compatibility issue?

~~~
coredog64
Not the OP, but maybe he's talking about the kernel panic that some users are
getting during heavy-duty compilation workloads.

[https://www.phoronix.com/forums/forum/hardware/processors-
me...](https://www.phoronix.com/forums/forum/hardware/processors-
memory/955368-some-ryzen-linux-users-are-facing-issues-with-heavy-compilation-
loads/page7)

~~~
tylerjd
Newer steppings of Ryzen have a fix applied, and AMD is allowing people to RMA
those processors affected. Threadripper is unaffected by the bug.

Source: [https://www.phoronix.com/scan.php?page=article&item=new-
ryze...](https://www.phoronix.com/scan.php?page=article&item=new-ryzen-
fixed&num=1)

~~~
paulmd
AMD has never stated that there is a fix for this. If you look at the link you
posted, this is Larabel making this claim on the basis that he hasn't seen any
_forum posts_ noting this problem on samples manufactured after week 25.
Quote:

> AMD has not provided an official public explanation of the fundamental
> problem, but from those in our forums and elsewhere, it appears to affect
> Ryzen CPUs manufactured prior to week 25.

This problem only affects a minority of chips in the first place (likely a
litho flaw in the cache section), it's probable that Larabel's second CPU just
didn't happen to be one of the ones with problems. And Week 25 ends June 25,
i.e. stock for these date ranges has hardly even made it through
packaging/distribution to end users let alone been extensively tested yet.

Larabel is jumping the gun on insufficient evidence and people are racing to
make the claim that AMD has fixed this, when that's far from the case. AMD
certainly hasn't made any statements to this effect.

AMD is RMA'ing afflicted units, which is really all that can be done until
they get a new stepping out. But I've seen no evidence that this is actually
_fixed_.

~~~
powercf
> This problem only affects a minority of chips in the first place (likely a
> litho flaw in the cache section)

What are you basing this on? I've seen no good reporting on this* but the AMD
Community segfault thread
([https://community.amd.com/message/2796982](https://community.amd.com/message/2796982))
seems to suggest that almost all Ryzen CPUs manufactured before the end of
June (which I assume is most of the current stock) are affected. Very few
people load their Ryzens sufficiently to hit this bug, but a large number of
those who attempt it seem to get the segfault.

* I would like to know the percentage of processors with the bug, percentage of review units with the bug (I would be very interested in this), and maybe some long-term testing of "bug free" processors etc.

~~~
selectodude
It may be ridiculous, but I'm not spending a million dollars on CPUs with
information gleamed from a forum post.

~~~
powercf
It's not ridiculous, but there's pratically no more information about it. No
major tech sites have covered it, beyond Phoronix. AMD haven't acknowledged
it, beyond stating that "a performance marginality problem exclusive to
certain workloads on Linux" exists, which is factually incorrect as it also
seems to occur on other operating systems.

I'm not spending hundreds of euro on a processor without knowing something
more concrete about this issue. If you budget is really ~million dollars, do
you have additional information about this that you can share?

~~~
selectodude
My ~$400 CPU budget went toward a Skylake i7 a couple of years ago, I'm
afraid.

------
yuhong
I have been thinking about whether GitLab should buy the M versions that can
do 1.5TB of RAM per socket with 128GB 3DS LR-DIMMs. They will probably not use
them immediately though. Of course, I think the price gap between 64GB LR-
DIMMs and 32GB RDIMMs are falling.

~~~
Svenstaro
I thought Gitlab went back on the idea of using their own hardware anyway?

~~~
CSDude
They can't even manage the managed servers, it has issues too many times

~~~
Svenstaro
I'm painfully aware of that. :(

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throwaway613834
Basically off-topic, but this might be one of the few places someone might
know: does anyone know which of the quad-core 8th generation Intel CPUs that
are about to come out in laptops support TSX-NI? I can't find this information
on their site.

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TheDongIsYou
This is a very good overview of bad anti-consumer practices Intel has done
throughout the last 30 years:
[https://youtu.be/osSMJRyxG0k](https://youtu.be/osSMJRyxG0k)

------
ythn
Simple, buy AMD

~~~
jandrese
Not so simple when you want to buy server quality motherboards.

~~~
kinghajj
Do these not count?

[https://www.supermicro.com/products/nfo/AMD_SP3.cfm](https://www.supermicro.com/products/nfo/AMD_SP3.cfm)

~~~
snuxoll
The other issue is buying the chips themselves, they're only available to OEM
partners right now AFAICT (not listed on Newegg or anywhere else I'd expect to
be able to buy retail boxed server CPUs).

