Software costs a concern for AMD in data center hunt

AMD officials say governments are looking for ways to squeeze more taxes out of software

Advanced Micro Devices is looking at the costs of software licensing and taxes as it aims to reduce the number of data centers worldwide, company officials said this week.

AMD currently has six data centers and wants to reduce the number to three over the next few years as it looks for ways to cut costs and consolidate servers, said Tom Painter, corporate vice president for global infrastructure services at AMD.

The possible locations of the company's data centers could depend on software costs, especially with AMD using many electronic design automation (EDA) software tools, which can be expensive.

Local taxes are also a concern, AMD officials said. "A lot of governments are looking at ways to exercise their taxing authorities," Painter said. "They want to collect tax on licenses."

AMD is putting many EDA tools, which help design microprocessors, in data centers that engineers can access in the cloud. More than 3,000 engineers at AMD access around 115,000 Opteron server CPU cores to run applications. The company maintains a 90 percent CPU utilization rate, and the company executes more than 40 million computing tasks each month.

AMD was surprised with the differences in software licensing and taxation costs between locations, officials said. AMD has data centers in countries including Malaysia and the U.S., and engineering tasks are executed in real time across the virtual grid of servers. The cloud approach is more efficient than earlier efforts of reimaging or repurposing servers, but with so many transactions and engineers, software-related costs are becoming an important factor in the company's budget.

"If you think about the cost of EDA, that's a [major] cost for semiconductor companies," Painter said.

While setting up data centers, the company also had to determine the optimal floor space and design, and whether to lease or acquire a place. AMD is also continuously trying to consolidate and reduce server overhead expenses such as electric bills through high utilization rates of its Opteron CPUs. The company looks at cost per transaction and cost per design, and a council meets often to plan computing demand and capacity.

The company can't afford to keep CPU cycles idle, so consolidation through socket compatibility offers a way to save, AMD officials said. The company's upcoming 16-core Opteron chip, called Interlagos, can plug straight into existing server sockets without the need to buy new hardware, and the new chips would add performance to help execute more complex engineering transactions in its data centers.

Interlagos is based on the company's new Bulldozer architecture and will be up to 40 percent faster than existing chips with up to 12 cores, while consuming the same amount of power.

AMD also has a number of experiments underway to improve transaction efficiencies via the cloud. The company is working on new heat management techniques and also mining computing power from unused PCs in the IT infrastructure.

The company is maintaining clusters built around the company's new PC chips to handle some mundane tasks. There are some back-end tasks such as single-threaded applications or graphics originating from clients that may not be ideal conventional Opteron chips, and the company has implemented its new Fusion chips to execute those tasks. AMD's Fusion chips integrate a graphics processor and CPU on a single chip, and were introduced this year for low-power and mainstream PCs.

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