October 28, 2020
Welcome to Protocol Cloud, your comprehensive roundup of everything you need to know about the week in cloud and enterprise software. This week: AMD's big bet on the future of enterprise chip demand, there's more to Facebook gaming than FarmVille, and you won't believe where this European company decided to build a new data center.
AMD has a colorful history as a chipmaker and perennial thorn in Intel's side — albeit one that hasn't done much to dent Intel's domination of the PC and server processor industries in the 21st century. Still, the upstart has outmaneuvered the giant on several occasions in the past, only to lose momentum amid a shift in the market, a series of unforced errors, or both.
AMD's $35 billion acquisition of Xilinx — easily the largest in its 51-year history — is a bet that demand for flexible purpose-built chips is about to transform the way enterprise data centers are designed and built. Its vision is similar to Nvidia's plans for Arm, should that other blockbuster chip deal be approved, and its timing finds Intel at one of its weakest points in a long time.
Tuesday's deal comes amid AMD's latest resurgence, which has increased its market value from around $2.5 billion when CEO Lisa Su took over in 2015 to over $100 billion earlier this year.
Xilinx is not exactly a household name, even within tech circles. But its field programmable gate array (FPGA) chips are used in cars, airplanes, wireless base stations and all manner of embedded industrial equipment that powers services most of us come into contact with on a regular basis.
Still, $35 billion is a lot of money, especially for a company that is expected to record around $9 billion in revenue this year, not including Xilinx.
Yet it does seem clear that the competitive pressures that drove the first era of cloud computing are shifting as the market matures.
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Hot or not? Somebody is going to figure out cloud gaming; why not Facebook? The company has world-class technical infrastructure, an enormous community engaged with its services and, as this interview with Protocol's Seth Schiesel shows, it occupies an interesting space in this market without either a phone or console business to defend.
Pretty SaaSy: There aren't a lot of enterprise software companies that would presume to tell their customers how to vote in next week's presidential election. Expensify is the exception, and CEO David Barrett told Protocol's Biz Carson why he made the decision to send an email endorsing Joe Biden that turned heads in Silicon Valley.
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Correction: In last week's newsletter, I incorrectly identified which Atlassian products were being phased out and the timing of that move. The company is discontinuing the server versions of several products by 2024 but maintaining some data center versions.
Thanks for reading — see you next week,