Software Capacity Planning with License Usage Data

Barbara VervenneManager, EDA Software, CAD Systems Engineering

October 2004

October 19, 2004 SoftSummit 2004 2

AMD Overview

A leading global supplier of innovative semiconductor solutions for the personal and enterprise computing, communications and consumer electronic markets

Founded: 1969

Headquarters: Sunnyvale, Calif.

Employees: 15,189 worldwide (Aug. 2004)

Sales Mix: 80% international

Q3 04 Sales

Microprocessors $673M

Flash Memory $538M

Other $28M

Total $1.239 Billion

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Software Capacity PlanningCentralized EDA Software Business Operations

My team handles the license business…..keeping EDA tools available on demand for every AMD design engineer 24/7

• Software Purchase Contract negotiations

– Team with AMD Procurement & AMD Legal

– Not limited to “end of term”

• Contract Management – Keys: check and install

– Invoices: check and authorize payments

• Usage Tracking, Management Reports & Charge backs

• Capacity Planning & Budgeting

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Software Capacity PlanningLicense Operations

Sunnyvale, California

Longmont, CO

Austin, Texas

Dresden, Germany

Aizu-Wakamatsu/Tokyo, Japan

Suzhou, China

Boston, Massachusetts

Bangkok, Thailand

Banglore, IndiaSingapore

Frimley, UK

Penang/Kuala Lumpur, Malaysia

Tokyo, Japan

• FlexLM License server configurationsFlexLM License server configurations – 32-bit/64-bit --- production license redundant triplets32-bit/64-bit --- production license redundant triplets– 32-bit --- evaluation license triplet32-bit --- evaluation license triplet

• Software licenses are served from Austin, TX to Software licenses are served from Austin, TX to AMD’s Engineering Design Centers in all three of AMD’s Engineering Design Centers in all three of AMD business units at AMD locations worldwideAMD business units at AMD locations worldwide

– 50+ EDA Suppliers 50+ EDA Suppliers – 80+ license daemons80+ license daemons

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Software Capacity Planning

Capacity Planning is an ongoing process

• Annual Budget Cycles• Quarterly Suppliers Contract reviews• Quarterly “Customer” usage and financial reviews• Monthly expense allocations and direct charge backs • Monthly internal capacity • “Ad hoc” license utilization checks• Trouble tickets

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Software Capacity PlanningThe License Usage Reports

•Weekly data is created from SAM “raw report” – Peak usage– Usage over time– Job Profiles– Available for ‘ad hoc’ analysis

•Monthly updates to the License Pool Usage Database which comprehends

– SAM reports filtered by location and business unit – “Price list” of all tools (products & features) – Demand forecast per business unit

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Software Capacity Planning The Process

License Pool USAGE DATABASE

LicenseServers

Usage Reports

CUSTOMER MEETING

• License Usage - history is the best teacher

• Project Schedules• CAD Methodology • Staffing

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Software Capacity Planning Pulling it all together

Having reliable license usage data keeps us in the driver’s seat with our vendors……and gives us credibility with our customers and our management.

• Usage data in hand makes it easier to evaluate license policy and pricing changes when proposed or announced by our vendors.

• Actual data can help reduce financial risk and budgetary exposure on new purchases.

• Well-understood historical usage data provides a baseline for more accurate forecasting. – Staffing changes– Project starts– Budget cuts

• Historical usage data helps us predict how improvements in compute technology will affect our capacity requirements.

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Software Capacity Planning

Before we close - let’s take a quick look at some software licensing trends that could have an effect on software capacity planning in the future.

Some of these trends are being driven by innovative processor technology being developed by AMD.

Software Licensing and Dual-Core Technology

Margaret LewisCommercial Software Strategist

October 2004

October 19, 2004 SoftSummit 2004 11

Software Licensing Trends

? Multi-core processors - How do you count cores? Virtualization - Separate licenses for every virtual

machine? Computing on demand and hosted computing - How

to calculate time and resource use

Customers are demanding software licensing to reflect the amount of work done and not

the characteristics of the processor.

The industry is facing a major shift in pricing models The industry is facing a major shift in pricing models with several technology trends pushing against with several technology trends pushing against

traditional software licensing methods. traditional software licensing methods.

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Software Licensing TrendsMulti-core Processors

L2 Cache

L1Instr

Cache

L1Data

Cache

AMD 64-bitProcessor

Core

DDR Memory Controller

HyperTransport™

Cache Size and Hierarchies?

Processor Performance

(IPC)?

Execution cores (physical or

logical)?

Memory bandwidth?

I/O bandwidth?

The size, energy consumption, & performance needs of today's computers require new innovations in semiconductor design

Multi-core processor technology allows AMD to continue to offer a competitive performance roadmap while meeting the system

architecture demands of our customers.

Pipeline Length?

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Software Licensing TrendsDual-Core Recommendations

• Only applies to soft licensing methods that rely on processor count - there are many software licensing models that do not count processors today

• Helps ensures software compatibility with existing x86 and AMD64 operating systems and applications seamlessly whether they are single-threaded or multi-threaded applications.

• Meets the requirements of our customers

For the initial AMD64 dual-core product release planned for mid-2005, AMD is taking a leadership position in

recommending that ISVs license by processor instead of by processor core.

Core 010

Core 011

Core 000

Core 001

Processor

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Software Licensing Trends

•Microsoft server software that is currently licensed by the number of processors on the server will continue to be licensed in that model for server hardware that contains dual-core and multi-core processors.

•This policy helps ensure that customers will not incur additional software licensing requirements or fees when they choose to adopt multi-core processor technology.

AMD applauds Microsoft’s decision which will make this new enterprise computing technology affordable to customers, including mid-size and

small businesses.

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Software Licensing Trends

Other AMD64 dual-core milestones

• Demonstration of AMD Opteron™ dual-core processor-based systems on August 31, 2004 – World’s first demonstration of x86-

class dual-core processor– 4 processor/8 core systems running

Windows® and Linux

• Software-related dual-core press release on Sept 7, 2004 – Included support quotes from Novell,

Red Hat and Sun– Included recommendation from

Gartner

• More details of dual-core technology highlighted at Microprocessor Forum on Oct. 5, 2004

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Cautionary Statement

This presentation contains forward-looking statements, which are made pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally preceded by words such as “plans,” “expects,” “believes,” “anticipates” or “intends.” Investors are cautioned that all forward-looking statements in this presentation involve risks and uncertainties that could cause actual results to differ materially from current expectations. Risks include the possibility that the company’s future multi-core processors will not be introduced on their current introduction schedules, will not perform pursuant to their design specifications, will not achieve customer and/or market acceptance, will not be produced in the volume and performance grades demanded by customers, and will not be supported by solution provider infrastructure, including operating systems, applications and licensing models. We urge investors to review in detail the risks and uncertainties in the company's Securities and Exchange Commission filings, including but not limited to the Annual Report on Form 10-K for the year ended December 28, 2003, and the Quarterly Report on Form 10-Q for the quarter ended June 27, 2004.

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Trademark Attribution

AMD, the AMD Arrow Logo, AMD Athlon, AMD Opteron, and combinations thereof are trademarks of Advanced Micro Devices, Inc. Windows is a registered trademark of Microsoft Corp. in the U.S. and other jurisdictions. Other names are for identification purposes only and may be trademarks of their respective companies.