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View Full Version : Why the huge price premium between the Athlon X2s and the dual core Opterons?


jporter313
08-02-2005, 09:41 PM
Why does AMD use this pricing structure? Are the differences between the X2s and the Opterons really big enough to warrant more than twice the pricetag?

JDex
08-02-2005, 09:45 PM
Different markets...

X2 is consumer level (read gamers)... Opterons are for companies that need super fast servers and workstations to make money. It's easier to charge premiums to people making money with your product than to charge people using the product for entertainment.

jporter313
08-02-2005, 10:09 PM
Different markets...

X2 is consumer level (read gamers)... Opterons are for companies that need super fast servers and workstations to make money. It's easier to charge premiums to people making money with your product than to charge people using the product for entertainment.


Thanks for the reply

yes, yes I've heard all that marketing rhetoric before, what i'm asking is what are the actual differences (aside from being made for MP) between the 2, and does it warrant the huge price difference they've put on it?

Are we paying for better processors or are we paying for AMD to flip a switch somewhere that says it can be used in MP boards?

lots
08-02-2005, 10:10 PM
Also Opterons feature an ECC memory controller, meaning they are more stable in the long run. While that isnt enough to warrant the price difference to your average joe user, when the chip is in a mission critical server, that needs as much uptime as possible, it will play into that. When downtime hurts your business, this is really important.

My guess would also be that Opterons are under tighter quality control.

jporter313
08-02-2005, 10:23 PM
Also Opterons feature an ECC memory controller, meaning they are more stable in the long run. While that isnt enough to warrant the price difference to your average joe user, when the chip is in a mission critical server, that needs as much uptime as possible, it will play into that. When downtime hurts your business, this is really important.

My guess would also be that Opterons are under tighter quality control.

Yeah, but really none of that warrants a roughly 100% price increase. I would like to build an opteron based system with 4 cores, but AMD is making it really hard to justify over a single X2 system.

lots
08-02-2005, 10:53 PM
Tell that to a company that will lose thousands of dollars, maybe even 100s of thousands, if its server goes down for any period of time.

Basically, they're expencive because they can be used in 2-way and up CPU setups. X2s cannot. Most people in that market have much more money, and will expect a more refined product.

Like I said, the price difference doesnt justify this fact to the common "joe user"

Edit:
Imagine a rackmount server with a 4 way system in it using 2 dual core opterons. Not only is the powersavings worth it, but you end up taking up less space as well and requiring less cooling equipment in the server room. Thus lowering the overall cost of the entire setup. In the grand scheme of things, the price difference in the X2 and DC Opterons is minor. In the Server market the value of such chips as the DC Opteron make it VERY economical, even though its price tag is much higher than that of the X2. The DC Opterons are more economical in computing power per cubic foot than most other CPU out there. (EDIT: Promise last one :P) And they are still one of the cheapest solutions available.

I dont expect this is valuble to your average user, but if you maintain servers this is very useful..

JDex
08-02-2005, 11:04 PM
It's not rhetoric... it's common sense economics.

If you make a product that has a high cost of R&D and manufacturing, and you have 2 separate markets... one that is only going to use your product for fun and another that is going to use your product for profit, logic would dictate that you:

A. Make a less expensive product that you can generate in large quantities and sell a lot of

B. Make a more expensive product featuring features specific to the profit market and make less of them

The differences are very clear between the two, even with just a little research. The question about whether the difference is warranted can only be answered by you.

jporter313
08-03-2005, 12:43 AM
It's not rhetoric... it's common sense economics.

If you make a product that has a high cost of R&D and manufacturing, and you have 2 separate markets... one that is only going to use your product for fun and another that is going to use your product for profit, logic would dictate that you:

A. Make a less expensive product that you can generate in large quantities and sell a lot of

B. Make a more expensive product featuring features specific to the profit market and make less of them

The differences are very clear between the two, even with just a little research. The question about whether the difference is warranted can only be answered by you.

Yes I see the logic in what you're saying, but what I'm trying to figure out is if it is worth the price difference for me and users like me.

You say the Opteron has "features specific to the profit market", What I'm interested in is what those features are. I'll do a little searching for it.

I meant no offense by the marketing rhetoric statement, I just get tired of hearing generalizations like that (this is for sevrers, this is for gamers), sorry if I came off a little harsh.

jporter313
08-03-2005, 12:54 AM
lol, this isn't very convincing.

From the tech report dual core AMD review:

"Opteron.
Server & workstation processors are sold for 2-way or 4-way set-ups for example where the clock speed is the same but the processor is tested to run in these various set-ups. They are the same processor but have undergone more validation and testing which puts the price up."

"Testing" doesn't exactly warrant the price increase for me.

I really think this is more a way for AMD to make up their R&D costs by fleecing companies who don't have time to put in the research about what the actual differences are (or need dual processors bad enough to pay the premium). My guess would be that those Athlon 64 X2s would run fine in dual processor configurations if they weren't hard-locked out of it by AMD. But hey, that's their perogative right?

lots
08-03-2005, 05:20 AM
Did you not read what I said? :)

X2s have several things preventing them from operating on server boards. One is the pin difference. Another is the lack for ECC memory capabilities. A third is the lack of at least 1 coherent link outside the CPU for CPU to CPU communication (for at least a dual setup, more coherent links are needed in larger CPU systems). I suspect a 4th reason would be electrical differences between the two CPUs, but I havnt looked at the white papers that discuss the electrical layout of each chip.

But this is beside the point. Dual core Opterons, in the server market, are cheaper and more powerful than competing Xeons, in terms of raw power, heat creation, and space required. Companies do not care much about the costs of such systems. Why do you think such monsterous CPUs, such as the Itanium, exist? That CPU is worth several thousand dollars, and it is used in large systems boasting 100s of the CPUs.

Like I said, to your average user, the advantages that this CPU brings, do not validate the cost to enter into this market. Average users do not have the same requirements as the server market, thus in your eyes, these advantages are worthless. But in a big corporation, stability (read more constricting validation process and the use of error correcting RAM), and parallelism win out. Cost is not something that the corporations worry about, at least on this scale. It's far too small a matter.

You have to realize that AMD makes more money in volume sales than anywhere else, and what better place than in systems that sport 100s, maybe 1000s of CPUs?

jporter313
08-03-2005, 07:03 PM
Did you not read what I said? :)

X2s have several things preventing them from operating on server boards. One is the pin difference. Another is the lack for ECC memory capabilities. A third is the lack of at least 1 coherent link outside the CPU for CPU to CPU communication (for at least a dual setup, more coherent links are needed in larger CPU systems). I suspect a 4th reason would be electrical differences between the two CPUs, but I havnt looked at the white papers that discuss the electrical layout of each chip.

But this is beside the point. Dual core Opterons, in the server market, are cheaper and more powerful than competing Xeons, in terms of raw power, heat creation, and space required. Companies do not care much about the costs of such systems. Why do you think such monsterous CPUs, such as the Itanium, exist? That CPU is worth several thousand dollars, and it is used in large systems boasting 100s of the CPUs.

Like I said, to your average user, the advantages that this CPU brings, do not validate the cost to enter into this market. Average users do not have the same requirements as the server market, thus in your eyes, these advantages are worthless. But in a big corporation, stability (read more constricting validation process and the use of error correcting RAM), and parallelism win out. Cost is not something that the corporations worry about, at least on this scale. It's far too small a matter.

You have to realize that AMD makes more money in volume sales than anywhere else, and what better place than in systems that sport 100s, maybe 1000s of CPUs?

I understand all this, I guess what's frustrating me is that I see the dual core as a natural progression of the processor market (a way for them to get around stagnating speeds) and the Opterons were priced in such a way that they were accessible to people in my position before, now they aren't. But I guess that'll change as these become more commonplace.

I think I still have a little bit of leftover suspicion about AMDs workstation processor pricing strategy dating back to the Athlon MPs (they were Athlon XPs that had been "certified" for multiprocessor configurations, but you could easily run the XPs in those configs since they were identical).

Cheers, and thanks to all for the input.

Vertizor
08-03-2005, 07:10 PM
Once upon a time, Intel Xeons were priced out of reach of consumers. Just a random factoid.

Intel's Itanium is also priced out of reach of consumers. AMD's Opteron is getting into the super computer territory... that's where Itanium plays... put 2 and 2 together, connect the dots, whatever other euphenism you want to use.

novadude
08-03-2005, 07:12 PM
Once they have the production capacity for numerous different dual-core models, and they get enough software support for dual core parts, they'll bring out less expensive models. Currently, every dual-core part they make sells. Companies buy them for increased rack density and lower power consumption (which gives them twice the computing power in half the space and with less than half of the cooling and power requirements of even normal opterons, not to mention how they compare to xeons). Affordable opterons took a while to come out as well, but don't expect dual core parts to come down too far in price until single core parts stop selling.

jporter313
08-03-2005, 07:28 PM
Affordable opterons took a while to come out as well, but don't expect dual core parts to come down too far in price until single core parts stop selling.

man, that's not what I want to hear. Maybe I should just do an X2 this time around and save the dual dual-core for my next workstation in a couple of years.

Vertizor
08-03-2005, 08:00 PM
Why not just go with 1 dual core Opteron now, and add the other DC CPU later on? Or start scratching those game tickets.

prixatw
08-04-2005, 04:42 PM
Don't forget that AMD decided there was still a market for at least one more single core Athlon (the FX-57), they wouldn't want to effect the sales of that just yet.

lots
08-04-2005, 06:06 PM
How does a single core Athlon FX effect DC Opteron sales?

prixat
08-04-2005, 08:30 PM
Hi Lots,

How does a single core Athlon FX effect DC Opteron sales?
Indirectly perhaps?
To sell single cores, X2s are artificially high so opterons have to be even higher. Just another conspiracy theory ;-)

Though it might be moot, this is from PCPro magazine:
"AMD swings axe as chip prices tumble"
http://www.pcpro.co.uk/news/75775/amd-swings-axe-as-chip-prices-tumble.html

Sephiros9883
08-04-2005, 09:46 PM
The Value of money. That's what explains most of it.

Like said before, Opterons are enterprise oriented and go through an extremely tight QA process.

For entreprise the cost of an opteron is vs Athlon is very relative. it's exactly when you're a little kid, your grand ma gives you 10$ for candies....it's a HUGE amount of money for you little kid. The it becomes less "valuable". the more you make money, the less each $ has importance. do you see what i mean?

for a company making 300M$ revenue a year, spending a 1000$ on a CPU that went through a very tight QA worth it. Sure the benefits for AMD is higher than for each Athlon selling....but that's the law of business.

THat's why all licenses of software are like 3 times what it costs for individuals

Now an Athlon X2 offers more that a dual Opteron 2.2ghz. before that you wouldn't have thought to buy a QUAD opteron would you?

Well consider it this way... :)

lots
08-04-2005, 10:21 PM
Truth is, corporations have the budget to purchase such systems. And X2s are pretty useless to a big server farm, which desires rack density.

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