Yesterday, Verizon announced that it’s building its own cloud computing platform to compete with the likes of Amazon, Microsoft, and Google. Rather than designing its own hardware, or using readymade big iron setups from someone like IBM, Verizon instead opted for high-density SeaMicro servers. AMD, which acquired SeaMicro last year, has been touting this as a huge victory over Intel and its dominance in the server market. We can exclusively reveal, however, that more than three quarters of the SeaMicro servers purchased by Verizon are actually powered by the Intel Xeon E3, not AMD’s own Opteron chip. AMD has, rather ironically, become an Intel OEM.

According to an industry source with first-hand knowledge of Verizon’s cloud compute implementation, who spoke to ExtremeTech on condition of anonymity, “The vast majority of the CPUs (more than three quarters) AMD is using for this implementation with Verizon are Intel Xeon E3s using the SeaMicro fabric they acquired. So in essence AMD is now becoming a microserver OEM for Intel and is still largely selling Intel parts in microservers for their customers.”

This information is rather at odds with what AMD has been saying about the Verizon/SeaMicro deal. Speaking to VentureBeat, manager of AMD’s server group and founder of SeaMicro, Andrew Feldman, said, “They’re using our server infrastructure from soup to nuts.” AMD’s infrastructure (the Freedom Fabric ASIC), yes, but Intel’s CPUs it would seem. Speaking to ZDNet, Feldman even went as far as saying that the Verizon deal was “a dream come true.” We can only assume that, despite AMD’s grandiose claims, these blogs didn’t think to ask Feldman whether these servers were actually AMD-powered or not, even though every SeaMicro server built before the AMD acquisition was Intel-powered.

Basically, it seems like AMD is trying to make it look like Verizon opted for an Opteron-powered SM15000 SeaMicro server, but in actual fact the vast majority of the servers purchased by Verizon are the Intel Xeon E3-powered SM10000. It’s not that AMD is flat out lying, of course — Verizon did buy some Opteron-based microservers — but, understandably, it’s trying to keep the conversation entirely about the SM15000, rather than the Xeon-powered SM10000.

The bigger story, of course, is about whether AMD can reclaim some of the server market from Intel. Just a few short years ago, with a slew of workstation and supercomputer design wins, it looked like AMD was on course to snap up a significant portion of the lucrative server market with its Opteron chips. Today, following a few generations of CPU cores (Nehalem, Sandy Bridge, Ivy Bridge) that have utterly crushed AMD’s efforts, Intel’s share of the server market is back up to around 95%. (Read: Microsoft now has one million servers – less than Google, but more than Amazon.)

SeaMicro, which is an industry leader in the rapidly growing high-density/low-power microserver market, was a savvy acquisition for AMD — but unless the company can produce some CPU cores that can actually compete with Haswell on the high end, or Bay Trail on the low end, it’s not entirely clear how AMD intends to win back a meaningful portion of the server market from Chipzilla. Maybe we’re looking at it from the wrong angle, though: Maybe AMD doesn’t overly care if it ends up being an Intel OEM. By selling SeaMicro servers, AMD gets to deal direct with the big boys, rather than merely providing chips that then go into HP, Dell, and IBM servers — and while Intel will certainly make a lot of money from the CPUs, AMD will reap its own hefty profit margins from the sale of each SeaMicro server.

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