I just listened to the quarterly earnings report, and AMD reported reasonable numbers. The new CEO Rory Read spoke about execution and recovering from issues on delivering product. In fact, his most important point came back to executing and delivering on promises.
Sounds great. Companies which execute their business well, naturally tend to do well over the long term for a lot of good reasons. My thoughts on the layoffs, announced just one week after the earnings report, made we wonder "is this the 'new CEO' effect?" and are these layoffs a quick fix by a CEO to make the markets happy?
I'm not answering that question just yet. There needs to be some evidence on how & where the layoffs are done. My inclination, however, is to say this is a market-pleasing maneuver. The CEO just visited all of his major customers worldwide and promised that AMD was going to execute & deliver on promises. First,with this announcement, we can be certain that if all of the layoffs have not already been decided (and often they are already done before the announcement), then 100% of the company will be worried about becoming part of the 10% to be laid-off. A huge distraction like this will not be help AMD execute and deliver on the company's promises. Second, AMD did not strike me as being a company with a lot of fat. The last five years have seen a lot of changes at AMD and the team in Europe has already been "optimized" - several times in fact.
On the bright side, AMD just released the new FirePro V4900 professional graphics card which will give those of us using professional CAD tools a boost in graphics performance without taking a big bite out of our wallets. I'm looking forward to seeing more of this new product and will share that with you soon.
Having financially healthy technology partners is a benefit for all of us. You'll see more here as this restructuring unfolds over the next 3 months.
The NVIDIA Professional Solutions Business grew in revenu by 4.2 % last quarter thanks to an increase in enterprise spending.
Sales for professional graphics were up in the second quarter because more of you were spending again. Enterprise spending grew modestly, and the increase improved the financial results for the graphics specialist, NVIDIA.
Total revenue for the quarter just exceeded the 1 billion dollar mark and more than 1/5 of that came from sales of professional solutions. Although NVIDIA does not disclose the margin contribution from the Quadro products, the professional market provides margins much higher than the corporate average, and the corporate gross margins were 51% last quarter. This is good news for CAD professionals. The high margins are important to NVIDIA which drives the company to defend its dominant market share. To defend its market share, NVIDIA invests strategically in R&D to develop solutions to really hard problems that CAD and other graphics professionals face.
The fortunes of NVIDIA stock prices tend to rise and fall based on the expectations of its mobile processor business outlook, but its bread and butter profits continue to be driven by its professional Quadro and Tesla GPU business. That is good news for CAD professionals.
In summary, total revenues in the second quarter were $1.017 billion, gross margins were 51.7%, and GAAP earnings per share were $0.25. Professional solutions at NVIDIA contributed $210.3 million to the earnings, an increase quarter on quarter of 4.2%.
The value in a professional graphics workstation is higher than you might realize.
When most of us look for the “right” workstation for our CAD and design needs, we shop for excellent performance, the right level of storage capacity, stability and reliability, and software certifications and support. Being smart shoppers, we judge the value of each system and the value of the key technology inside.
I suspect that one place many of us economize to our own detriment is by selecting a less expensive consumer graphics solution over a comparable professional solution. Being realistic, there are times when you can do that, but besides the issue of reliability, testing, and support for your applications – and the disastrous impact to your projects, profits, and productivity when something goes wrong with a workstation – many professionals will be bypassing significant performance gains as well.
In todays professional applications, the computing environment is moving to a heterogenous computing system. Application developers are creating products that use both GPUs and CPUs for computing. This is a recognition that a GPU is a super-computer-on-a-chip inside a professional workstation. A couple of examples in the CAD and design domain include CATIA V6 from Dassault Systèmes and THEIA RT from optical simulation specialists, Optis.
In the first case, CATIA Shape has integrated iRay from Mental Images – the benefit for industrial designers around the world is simple – interactive ray-traced images of your design. Critical for design productivity, the designer makes a change and interactively visualizes the design with ray-traced quality. How this is possible is due simply to the intelligence of the Mental Images developers. Ray-tracing, although a graphics-specific algorithm for rendering physically accurate images, is a highly intensive computational problem. It has nothing at all to do with the more common, albeit amazing, images generated in real-time using the hardware-implemented graphics pipeline of the GPU. Ray-tracing needs a computing processor, not a GPU, and until recently, ray-tracing was anything but interactive.
So inside CATIA Shape, the Mental Images developers leverage the extreme computing horse-power of the Quadro GPU (or GPUs) in the workstation – a massively parallel-processing GPU – to do the heavy-lifting for the ray-tracing algorithm.
A French specialist in optical simulation, Optis, has been going far beyond the realism of ray-tracing for more than 20 years. Optis is not specialized in creating amazingly realistic looking images, they are specialized in creating amazingly accurate images. The difference is that Optis solutions are optical simulations of the light and its interaction with the entire environment – materials, lighting, natural lighting, reflections, etc. In brief, Optis software is highly regarded by its customers, for example in the automotive, aerospace, and luxury goods industries, where the simulation of light and lighting is critical to the product.
Like so many hard problems in simulation, real-time and interactive were adjectives rarely found – even in the most simple scenarios. When Optis partnered with the GPU experts at AMD, the collaboration resulted in a product Optis calls THEIA RT, permitting exactly that which had not been possible before – interactive visual simulation of complex industrial designs. As in the previous solution, Optis developers leveraged the massively parallel-processing capabilities of the GPU. In this case, by teaming with AMD and using the OpenCL environment to access the GPU's power.
And AMD themselves are uniquely positioned and, I suspect, highly motivated to push this platform to new capabilities. Just a short time ago, I spoke with AMD about the development of their Fusion heterogenous computing environment. As CAD professionals, we don't need to care about this, but the people developing our applications do care a great deal about this platform. We all know that so many problems today take huge computational resources – FEA, CFD, almost any area of engineering, design, or architectural simulation – and when the developers of your applications have an easy way to access the super-computer hidden inside your workstation, they are going to make it possible for you to do thing tomorrow which you don't even consider today. All of which will help you and your company to be more productive, more creative, and more competitive.
So remember, when you are looking at your new workstation requirements, do some checking to see if you can unlock a graphics super-computer. Because in the examples above, and more and more new examples, the results are stunning. And if you are not looking, then the fact that your workstation leverages professional GPU-computing is invisible to you.