A big question was posed almost a year ago: Is hardware going the way of COBOL?

TheCUBE industry analyst Dave Vellante posed that question in an April 2022 edition of his Breaking Analysis series. It has been an important consideration given the rise of cloud and software as a service. Demand for cloud architects, DevOps pros and developers with expertise in microservices, Vellante wrote, was superseding those whose skills had historically been in high demand: those who knew how to troubleshoot hardware, configure ports, tune storage arrays and more.

“The labor and skills needed to deploy, troubleshoot and manage hardware infrastructure is shifting quite dramatically,” Vellante said at the time.

To answer the question of what came next, SiliconANGLE Media’s livestreaming studio theCUBE assembled a panel of analysts and experts to weigh in. Bob O’Donnell, president and chief analyst at TECHnalysis Research, noted at the time that the amount being spent on hardware remained very high.

The other important thing happening in hardware was in the diversification of the types of chip architectures being seen and how and where they’re deployed, O’Donnell added.

“We’ve moved from a world of x86 CPUs, from Intel and AMD, to things like GPUs, DPUs,” he said. “We’ve got computer vision processing; we’ve got dedicated accelerators. We’ve got all kinds of network acceleration tools and AI-powered tools. There’s an incredible diversification of these chip architectures, and that’s been happening for a while. But now we’re seeing them more widely deployed, and it’s being done that way because workloads are evolving.”

Also making an impact is a growing diversity in chip architectures, O’Donnell added, and he said more innovations would be on the way throughout this decade. Examples include new network interface cards (NICs) from firms such as Broadcom and other surrounding components such as RAID controllers. 

Almost a year later, where have developments taken place and how could the year ahead bring further change?

When the chips are down

Things moved so quickly when it came to cloud computing last year, it was easy to miss the big shifts in the hardware space. ⁠Gartner Inc. estimated that worldwide spending on software, including cloud applications, would reach $790.38 billion by the end of 2022.

Upgrades to graphic cards is one area that has seen significant movement over the past year. In September 2022, Nvidia Corp. announced a pair of extremely powerful graphics cards, which the company said would utilize artificial intelligence-powered graphics to provide big steps for performance and energy efficiency.

Intel, meanwhile, shared new details that same month about its Arc A-Series lineup of graphic processing units for desktops, which was intended to function as part of Intel’s broader effort to establish a presence in new parts of the chip market. Efforts to expand Intel’s footprint in the chip market was a big emphasis over the past year, as it was for Advanced Micro Devices Inc.

This past January, the company introduced an array of new data center and consumer chips at the CES 2023 consumer electronics event in Las Vegas. It added the Instinct MI300, a so-called adaptive processing unit featuring 146 billion transistors.

“The MI300 can train much larger AI models faster at lower costs and with less power,” said AMD Chief Executive Officer Lisa Su during a CES keynote. “MI300 can reduce the time to train these models from months to weeks with dramatically lower energy costs. And, more importantly, it can also support much, much larger models that can be used for even more advanced and more powerful AI services in the future.”

AMD also unveiled the new data center chip called the Alveo V70, which can be tasked with running AI applications in production after being trained. Intel has also spent much of last year debuting new chips for the consumer market, including when it did so at CES 2022.

In recent months, Intel has been debuting new performance-optimized workstation processors, including the Xeon W-2400 series and the more advanced Xeon W-3400 series. Hewlett Packard Enterprise Co. has also combined forces with Intel, introducing an expansion of its HPE ProLiant Gen11 next-generation portfolio, powered by the Xeon chip platform.

“It’s about one thing: engineering compute for a customer’s hybrid world,” said Krista Satterthwaite, senior vice president and general manager of mainstream compute at HPE. 

“It doesn’t matter where the bottleneck is, whether its CPU, memory or IO, we have advancements across the board that are going to make a difference in what customers get out of their workloads.”

The ongoing shifts

The past year in hardware also posed some challenges for legacy tech giants. Dell Technologies Inc. had to adjust its plans after spinning off VMWare Inc., leaning more into its other hardware.

“Despite the fact that Dell doesn’t have a huge software revenue component since spinning out VMware, and it doesn’t own a cloud, it plays in virtually every part of the hardware market,” Vellante said as part of his opening analysis of the Dell Technologies Summit event. “And, it can provide infrastructure for pretty much any application in any use case, in pretty much any industry, and in any geography around the world.”

Dell, along with companies such as HPE and Oracle Corp., are all part of a broader trend taking place in the industry right now: Every retail hardware provider is pushing out upgrades based on the latest chips from Intel and AMD. For instance, in announcing a revamped lineup of PowerEdge servers, Dell revealed it would be powered by AMD’s 4th Gen EPYC Genoa central processing units.

“Customers demand uncompromising compute performance delivered in the most sustainable manner possible,” said Rajesh Pohani, vice president of portfolio and product management for PowerEdge, HPC and Core Compute at Dell Technologies. “Our latest PowerEdge servers are purpose built-to meet the needs of today’s demanding workloads with efficiency and resiliency.”

Such widespread adoption has likely led to success in the market for AMD, beating its expectations on sales and profit thanks to strength in its data center division. The company reported earnings before certain costs, such as stock compensation of 69 cents per share, beating estimates of 67 cents.

“AMD’s diversification strategy is paying off better than that of its rivals,” said Holger Mueller of Constellation Research Inc., in responding to the results. “Its strategy is aided by an attractive chip portfolio in all segments, but its resilience is likely to be tested in the next full year.”

Intel, meanwhile, says it has high hopes for the year ahead. But some are waiting to see results.

“Intel had high hopes that Sapphire Rapids would enable them to take the fight to AMD,” Lucas Keh, semiconductors analyst at Third Bridge, told Reuters. “However, our experts say that it has been a disappointment so far because of Intel’s continuous inconsistency in delivery.”

The road ahead

Nearly a year ago, when theCUBE asked whether hardware still mattered, analyst and consultant Marc Staimer had a simple answer: “It absolutely does … you can’t run software on the air.”

He furthered: “Hardware costs are fixed. Software costs tend to be very low. It’s kind of a weird thing what we do in the market. And what’s changing is we’re now starting to treat hardware like software from an opex versus capex perspective. So yes, hardware matters.”

Even companies like AMD are likely to be tested in the year to come, as Mueller of Constellation Research noted. But certain trends have also emerged that will be fascinating to track over the coming months, including some help coming from high places.

Last August, U.S. President Joe Biden signed a bill to invest billions into domestic semiconductor manufacturing and science research, with an eye on competing with China.

“It’s a recognition of just how important semiconductors are to both economic prosperity as well as national security in the United States,” said Su of AMD, as quoted by CNBC.

Cloud and software as a service have certainly exploded over the past year. But as the past year has shown us, innovations in hardware continue to drive massive interest across industry, a trend that is sure to continue throughout 2023.

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