HP Goes Arm in Arm With ARM

Watch out, Intel (Nasdaq: INTC  ) , because ARM Holdings (Nasdaq: ARMH  ) is stepping out of the mobile arena and into the realm of enterprise servers.

Yesterday, Hewlett-Packard (NYSE: HPQ  ) announced a new line of servers using ARM-based chips -- even though HP is currently the largest vendor of Intel-based servers, with Dell (Nasdaq: DELL  ) as another mainstream provider. There has long been talk of enterprise-grade servers adopting ARM architecture, but nothing has materialized -- until now. Enterprise server customers value three things: speed, price, and power efficiency. ARM-based chips deliver in spades on the latter two.

HP will be utilizing chips from a small chip shop based in Austin, Texas, called Calxeda. The company was founded in 2008 and includes ARM Holdings as one of its initial investors. The quad-core ARM-based chips are dubbed "EnergyCore" processors and consume as little as 1.5 watts of energy, the lowest power consumption seen in servers.

In comparison, Intel's rival Atom processor uses 8.5 watts; jumping up to a powerful Xeon server processor kicks consumption up to 45 watts. EnergyCore processors aren't built with raw horsepower, but they can run the vast majority of cloud tasks that heavyweights like Google (Nasdaq: GOOG  ) and Amazon.com (Nasdaq: AMZN  ) throw at it. The chips also run cooler because of reduced power consumption, allowing manufacturers to pack more of them into each system.

This is one of the few things HP has done lately that is actually strategically sound, unlike other recent events. This project is the first major stab at bringing ARM to the enterprise server market, and the first batch is meant primarily for testing purposes. Most server applications can't run as-is on ARM architecture, so some adjustments would be needed if the testing wows some prospective adopters.

HP is claiming potential energy savings of up to 89% while occupying 94% less space, which could reduce overall costs by upwards of 63%. Those are some tall orders to fill, but even getting in that ballpark would catch the eye of any IT department.

Speed is no longer the determining factor. Few users nowadays actually need the raw power that Intel's chips are renowned for. Rather, what counts is having sufficient speed to accomplish the majority of tasks but being able to do so efficiently and cheaply. This is why ARM has become the de facto standard in mobile devices and why it is also a credible threat to Intel and AMD (NYSE: AMD  ) , even on their home turf.

Add ARM Holdings and Hewlett-Packard to your watchlist to keep tabs on how ARM-based servers work out. Get access to this free report on another revolutionary trend in the mobile sector and how to profit from it.

Fool contributor Evan Niu owns shares of Amazon.com and ARM Holdings, but he holds no other position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Intel and Google. The Fool owns shares of and has bought calls on Intel. Motley Fool newsletter services have recommended buying shares of Intel, Amazon.com, Dell, and Google; and creating a bull call spread position in Intel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (4) | Recommend This Article (4)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 02, 2011, at 4:09 PM, TEBuddy wrote:

    The software side of these things will take years. Maybe they have already started, but these type of systems were abandoned before because of the lack of support and AMD proved the X86 architrecture could dominate in actual efficiency clock for clock. AMD already has some impressive efficiency numbers, better than Intel. So if I have 100 20 watt cores at 3Ghz or 1000 1 watt cores at 1Ghz what did I really gain here in power efficiency or productivity? Its stupid math is what it is, because nothing will take full advantage of all the cores to make it more productive over the lesser faster cores and save you no power.

    And AMD already has many core processors and does CPU GPU sharing. So they can match the 1000 cores handily.

  • Report this Comment On November 02, 2011, at 5:10 PM, jhf678 wrote:

    @TEBuddy: I agreed with what you said. It is only a prediction that HP will goes with ARM. There is a sure thing on paper yet. Later it is going to arm in arm with AMD because AMD is specialize in server. It is like the Kindle Fire prediction. They all said it is going to be Tegra from Nvidia, but turn out to be TI.

  • Report this Comment On November 02, 2011, at 7:12 PM, TMFRhino wrote:

    jh,

    I don't think anyone said Amazon was going with Tegra with the 7" Fire- it was always the possible 10" version that was NVIDIA bait.

    -Eric

  • Report this Comment On November 02, 2011, at 8:27 PM, JamesRCoulter wrote:

    "This is one of the few things HP has done lately that is actually strategically sound"

    That cracked me up

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