Recently news broke that Calxeda, a pioneer in ARM-based server chips, is shutting down. Calxeda ran out of money and failed to receive additional financing, so the Board voted to shut down operations to preserve capital, said Karl Freund, Vice President of Marketing. Calxeda is currently undergoing restructuring, and unfortunately, most of its employees will be laid off, except for the few that deal with creditors and those who will figure out how to proceed with the company’s intellectual property.

About Calxeda

Calxeda was started in 2008 by former employees of Intel, AMD and Marvell. Calxeda received more than $100 million in funding from ARM Holdings, Texas Instruments and others. Calxeda was one of the ARM licensees apart from Marvell to build to make ARM-based processors for servers.

Calxeda was one of the early pioneers, working around ARM-based SOCs based on ARMv7 architecture and 32 bit instruction set. They were the first to come out with “EnergyCore” Server-on-a-Chip, which consumes as little as 1.5 watts. Instead of focusing on a product roadmap similar to Intel, AMD and others, Calxeda focused on designing SoC which offers the same performance at the system level (with more chips per system) as an equivalent x64-based machine resulting in an ARM server at half the cost, using one-tenth the energy, and occupying one-tenth of the space.

Calxeda had their big win when they announced a partnership with HP in 2011 and joined its Redstone Server Development Platform, where HP intended to build low power servers based on SOCs from multiple vendors, including Calxeda. Later it partnered with Foxconn, GigaByte and others to introduce its power saving chips and planned to launch its next generation SoC based on ARMv8 architecture that supports both 32-bit and 64-bit instruction sets.

What went wrong?

“Even though Calxeda had strong product development team with lot of emphasis on R&D, they were unable to make their business financially viable.

 Calxeda spent lot of money and energy the on 32-bit ARM v7 architecture that would make their SOC’s efficient, but market was slow to embrace since customers were more interested in a 64-bit architecture. Recently Calxeda had started working on an ARM v8 based 32-bit and 64-bit architecture and was expecting to launch SOC’s in 2014, however they ran out of funds.

Perhaps the support that Calxeda expected from the mainstream server manufacturers never really materialized.

Is the market still strong?

It is unfortunate to see start-ups like Calxeda closing due to internal operational challenges. However, the microserver market still has a great deal of opportunities which can now be capitalized on by other vendors.

2012 and 2013 witnessed huge traction for low power servers with an increased focus on gaining efficiencies in power consumption, space utilization and energy conservation. Apart from Calxeda, chip vendors including AMD (SeaMicro), AppliedMicro, Marvell and Server vendors HP, IBM, Dell are more intensely focusing on this space and providing options for customers, filling in the gap created by Calxeda.

According to iSuppli, the shipment of microservers is forecasted to reach 1.23 million by 2016 – around 10% share of total server shipments. High growth in microservers shipments is fueled by its’ energy efficiency, expandability, and low cost which meets the needs of rising demand of data centers providing cloud and mobile computing.  impact

There is huge opportunities on the horizon for low power servers, especially ARM-based servers. We expect that one of the chip vendors or major server vendors such as HP or Dell, may acquire important intellectual property assets from Calxeda. We also anticipate that multiple ODMs from Taiwan and China, including Quanta, Wistron, Hyve, Inventec, will play key roles in redefining the server market landscape.

“Over the last few years, Calxeda has been a driving force in the industry for low power server processors and fabric-based computing.  The concept of a fabric of ARM-based servers challenging the industry giants was not on anyone’s radar screen when we started this journey.  Now it is a foregone conclusion that the industry will be transformed forever.” – Calxeda in its shutdown announcement

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