Intel/AMD deal could help solve virtualization compatibility problems

The $1.25 billion Intel/AMD settlement announced Thursday could improve competition in the server hardware market and solve some lingering problems related to server virtualization, analysts say.

50 greatest arguments in networking: AMD vs. Intel

Today, a virtualization technology known as live migration lets customers move workloads from one physical server to another, but only if both servers contain processors from the same chip maker, according to Forrester analyst James Staten.

"If you look at the virtualization instruction sets that have been implemented by AMD and Intel, they are incompatible with each other," Staten says. "If you build a virtualization pool and do live migration from one system to another, it has to be all Intel, or it has to be all AMD."

Click to see: AMD, Intel agreement

The Intel/AMD settlement, which ends various antitrust and patent cross-license disputes, doesn't explicitly talk about virtualization, Staten notes. But a new five-year cross-license agreement between the companies raises the possibility that Intel and AMD will share information on their instruction sets and enable live migration across servers with different processors, he says.

Gartner analyst Martin Reynolds agrees the Intel/AMD settlement could be good news for virtualization customers. "If they were to integrate virtualization more deeply into the processors as a single standard that companies use, it's possible virtualization could become less expensive," Reynolds says.

The virtualization incompatibility has mainly harmed AMD, because the issue forces customers to standardize on one type of server and Intel has a dominant market share, according to Staten.

In the wake of the settlement, there are several other potential areas for new levels of compatibility between Intel and AMD processors, Staten says, including memory and power management, and security.

Broad collaborations between the rivals should not be expected, though. "These are two fighters who just took a lot of bruises over the last two years," Staten says. "They're not about to run to the center of the ring and shake hands."

In lawsuits filed against Intel, AMD claimed that Intel illegally forces customers into exclusive deals with cash payments, discriminatory pricing, marketing subsidies and other practices.

The settlement prohibits Intel from "offering inducements to customers in exchange for their agreement to buy all of their microprocessor needs from Intel," and other anticompetitive practices such as inducing customers to limit or delay sales of AMD products.

"Intel agreed to a set of rules of the road for how they will conduct business going forward," says AMD spokesman Drew Prairie. "It should help create a fair and open competitive environment where products compete on their merits, and where innovation is rewarded by the marketplace. I think that's beneficial for all."

AMD benefits from the settlement more than Intel does, because it eliminates many concerns customers have about purchasing AMD-based servers, according to Staten. Even if customers like AMD technology, they might have chosen Intel-based servers instead because of concerns about AMD's viability.