The truth about the direction of Tech Companies

I routinely give @dinscurge alot of crap for hating on NVIDIA but in truth I realize his frustration and well its due to all of you. The customers not the company. Lets talk about it from the beginning of our computer age.

There are typos, Its st patricks day. Im full of guinness and meed

Starting early

Before the dawn of the personal computer, another machine was used to address businesses computing needs for a long while the minicomputer was used by large businesses and organizations for scientific engineering and would eventually become an office tasks machine. This might seem strange calling computers of those days mini but the computers that could be full mainframes were kind of gigantic in comparison to the point of companies needing whole rooms just to house them. Companies that made minicomputers like DEC were incredibly successful in the mid-sixties and seventies and all the way up to the mid-eighties making billions of dollars in profits. These were regarded by investors and by the computer press and were examples of great management that is the until the late 1980s with the PC met the performance needs of the same market who previously bought minicomputers. The PC market then took over the minicomputer market was created by a different set of companies than those that created the minicomputers including apple and Commodore. Most of the players in this business did not make it to being a player in the desktop PC market. This defined the desktop PC market as a disruptive technology.

Why did the companies that made minicomputer fail to transition?

what type of management with so many resources let’s a smaller company like apple or commodore steal the market away?

Well that’s what good management does that’s right! See the problem with the vast majority of CEOs and other management at technology companies is that they play the game by the rules they do good management rather than what is called disruptive management.

You probably ask now; what exactly is the role of the CEO and who really controls the future of technology companies and their RnD?

Well let me ask you a question? (Answer before continuing)
Which of these choices do you think determined which products AMD or any other company should research develop and release; (Using AMD example)

  • Lisa Su

  • the CEO

  • the board of directors

  • investors

  • middle management

  • Engineers

0 voters

Now that you’ve answered let’s examine this. Depending on who you are and what you do in your life for a living you might have said that Lisa Su is the one responsible for the products developed and researched. I guess I should note that there is definitely a part of society who loves to make idolize CEOs especially if they are charismatic, i.e Elon Musk or Tim Cook. I guess there is nothing wrong with having a successful CEO as a role model but there is a danger and that is you’re more likely to become emotionally attached to the company they run and by that products even when they are poorly engineered. There is a more cynical bunch that see the investors as the ones that truly decide what products a company should release. Also depending on your corporate political inclination, you might think that the engineers at the bottom are the true determiners and influencers of this a company’s innovation. Sort of sound logic since after all they’re the ones getting their hands dirty in coming up with new technologies. Well guess what, none of these people decide what products will be releasing. Its actually the people and the existing customers who truly decide what products a company releases where their resources are allocated. AMD as an example, their largest customers are Sony Microsoft and us. the desktop and laptop market. Believe it or not I when it comes to innovation the only groups that send a message for the future are these three. Companies really invest enormous amounts of resources into projects that represent a risk for the business if those result in products that their existing customers need. The company’s repeatedly failed to investing simple a disruptive projects that might not even require as many resources show no interesting them at all. A good example of this is how it intel completely failed to enter the mobile processing market when smartphones were emerging intel’s customers at the time had no interest in low-power processors so Intel’s leadership did what any good management would do! they listened carefully to their customers and they tracked what the competition was doing and they kept on making sustaining improvements to the line of products.

Guess what?

As a result of this “good management” intel completely lost mobile market to ARM which they dominate it nowadays. should they have employed disruptive management they could easily have developed low power smart phones for mobile phones seeing as they have way more resources than ARM at the time. However this is today’s day and age and they didn’t and no matter how hard they tried in following years intel hasn’t been able to make a dent in ARMs dominance in the smartphone industry.

Lets take a look at NVIDIA

Nvidia is a company that is currently being held hostage by that customers. Dont believe me? Aks the question: why did Jensen invest so heavily into the expensive on RTX gpus when the market is moving towards commodity that AMD has done decent at exploiting? New Hardware for new/existing customers! The answer is simple I know this is hard to believe but Jenson and the rest of the management at Nvidia have very little power of whether the company invests their RnD into. The customers decide what products Nvidia will launch. In this case their customers are mainly the gaming sector and data centers if you look at nvidia’s Revenue per segment you can see that gaming is the main stream of income with the Datacenter seeing Healthy Growth as well. Well guess what? Resources for research and development are being allocated to satisfy the customer’s in these two segments. Within the sector of gaming gamers who already have a half decent graphics card… see no reason to upgrade seeing as the most popular titles out that all playable on modest hardware with the customers who will buy a new GPUs are the ones looking for the very best gaming experience at 4K in high refresh rate so you can see how NVIDIA is being held hostage by that customers. The ones that do want new GPUs want them significantly faster and with new features even if they arent good features. So when NVIDIA has to invest in enormous amounts in large dies to satisfy them resulting in you getting the expensive on gfx cards because that is what YOU asked for.

The other segement

By far the segment that saw the largest growth in revenue was the Datacenter at 51% last year so it’s sales of gaming gpus are declining and the high margin datacenter business is growing NVIDIA will naturally gravitate towards that business and going forward and unfortunately for us that means less resources will be allocated to finding truly disruptive technology. Here is the proof. Recently NVIDIA bought mellanox with 6.9 billion dollars. This is the largest acquisition in their history. The company makes high performance networking for clusters. Well in the data center this is important because it doesnt matter how powerful your hardware is if you limit it by the network connection. They have worked together before on SUMMIT.

Interestingly enough NVIDIA is following pray to good management which means in time they are self destructing. They will move higher into the data center and slowly away from the PC market. This move is dangerous because its happened before. Youve probably never heard of DEC. They were once a market leader and were the nvidia of the time. They were second only to IBM. Does DEC make computers? No. Compaq bought them. As a result… Compaq also got bought by HP because they couldnt sustain the high margin profits. This is similar to how nvidia is choosing to move to the data center. The same thing will occur again. Also HP buying compaq was another reason why HP also in time fell apart. Look at every decision a company makes. They move towards high margins with good management. They move towards low margin disruptive markets with disruptive management. A good board of directors will shift CEOs to balance these two operational motifs in the corporate world. IBM did something smart at one point by targeting the PC market with a completely separate division they started in florida. They fell pray to good management again and pooled all of them together which resulted in IBM nearly going bankrupt and them following out of the PC division altogether.

So what?

ARM is well positioned to take advantage of the market at the current point. You wonder why. It all has to do with you. Now that new super fast expensive hardware is not as important. The companies that benefit the most are the disruptors. The companies that provide innovative disruptive hardware at a cheap price point. AMD is sort of doing this but not really… so you label them as not an evil company for example when they are just the same as other companies. They are following a disruptive management model to exploit the customer base. You think it benefits you because its cheap. No its just good for business. AMD faces a huge challenge today though in the stock market. The low value definitely stops AMD from being able to be innovative due to investors. You might think OMG Ryzen was so good. It disrupted everything and so on. No it really didnt. Yes its better, yes it kind of caught intel off guard but guess whos catching up? Intel. Yes they brought 8-16 cores to the mainstream. It shook up the market but this isnt what disruptive means. Disruptive means that you create a new market with new customers. AMD did not do this. Intel is quickly catching up. NVIDIA didnt do this and faces the challenges of stagnation due to good management. These are all sustatining innovations and not disruptive ones. Lisa Su has been a wonderful manager of a AMDs resources. She hasnt been disruptive. Her role has been to increase the share prices which affect the company’s ability to access capital on favorable terms. This also affects stock options which are used to reward engineers who could create disruptive technology. Guess what happens when they are low, its bad two fold as you can see and vice versa. When the stocks fell notice that Rajah Kaduri left for intel. This is no uncommon deal. Notice that also jim keller left. Engineers are smart, They will absolutely go where they get the most gratitude for their intelligence. All those factors are closely tied to innovation in a company. Healthy growth rates because of a good customer base are more likely to lead to a company creative disruptive technology. When your customer base allows you to stagnate and only focus on sustaining innovation or good management techniques [insert nvidia or amd here].

Now AMD COULD create a disruptive technology if done correctly. APUs if the ryzen 3400G and so on could replace mid range to higher mainstream GPUs. AMD could create a new market of cheap gaming and VR boxes. This is something NVIDIA had all the potential to also do with the NVIDIA shield but both companies have failed to do so due to “Good Management” and their customer base. Yes you are to blame. If you think NAVI is going to do anything research this trend I just spoke about. Following it will show you that navi will not be spectacular. It will sell just as well or worse than previous AMD GPUs in the last decade. Sorry fanboys on each side but both companies suck. NVIDIA will always have alternatives with it. This is why disruptive management is needed. AMD could create a new market where NVIDIA would have no competing option or vice versa but neither do. This leads to alot of frustration but its the truth of what good management is. This is the effect of the customer base. You want to change it? Change the way you shop. Seek newer disruptive technologies over the current high margin ones. Start up a company and make one. Grab a bunch of insane engineers. You have the potential to do so. Another point is that you (the customer base) label companies that are evil based on which side you are on. What you dont realize is that YOU are the evil one not the companies. In the end you push the company to do what it does. Not the other way around at all. So think about these things before getting frustrated with a company. Think about the processes going on inside.

Comment below. Tell me other patterns youve seen. Let’s talk about it. This is a very interesting topic.

Decent books on the topic:
The Innovator’s Dilemma
The Innovator’s Solution
The Innovator’s DNA

Easily found illegally too if you dont have money. Go read


In true Viking form.

EDIT: True drink to read this right now. Will respond tomorrow.


Same but I like it. Will respond tomorrow… Its luck o the Irish day

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Everybody says “Vote with your wallet” but rarely actually do that.



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Not to be negative here but you sound bitter over AMD’s recent successes. All this recent hype, CEO discussions and changes in company valuations are not for gamers or even computer folks, they are for the business guys, investors and (as Wendell says) the Normies. Media outlets are just trying to make money off the controversy and dividing readers is an easy way to do it.

As a person who grew up in the age where most of the minicomputer competitors died out, I say the real reason that we are left with the hardware and software that is most popular today is because those companies were (and are still) full of competitive assholes who would sell out their own children to win. The CEOs at the time all represented this and Nvidia’s CEO came straight out of that mold.

Embrace, Extend and Extinguish

Nvidia is not being held hostage by customers… Nvidia had a personal hand in wrecking SDI’s early gpu game, pushing Mellanox out of the consumer market, killing 3dfx and forcing ATI to sell. They still utilize closed technologies, then partner with gaming companies and their developers to put those to work in their games. In the past they paid gamers and reviewers to post on forums, paid hardware vendors to test their stuff and have a ton of NDAs to cover the discussion of both. Hell, every time someone talks about their Tensor cores, Cuda Cores, RTX and G-sync they are winning. Those technologies are things that their competitors can’t use and any any games and benchmarkes that are optimized for them are an automatic win for them. There are some wonderful technologies out there like DX12, Open CL, Open GL and Vulcan and you will see other company’s video cards doing much better against Nvidia cards in benchmarks that utilize these. This is the reason you often hear people say that AMD is at parity for “compute”, since most virtual and commercial resources do not use proprietary Nvidia technologies for their workflow.

The current market reality is that Intel (70 billion in Revenue in 2018) and Nvidia (near 10 billion in Revenue in 2018) are leaders in their markets. AMD (6.48 billion in 2018) is their smaller and scruffier competition and is competing both of them. AMD is the only thing keeping them from becoming lazy and thank god that they bring actual competition during some release cycles so that we aren’t forced to pay exorbitant prices for 4 core cpus and 2gb video cards. If AMD is winning anything it is because one of the leaders got lazy or messed up

Intel and Nvidia hold all the cards, don’t be fooled by their crying or games. Their short term difficulties will get ironed out and they will figure out a new way to dominate. That fact that AMD exists and is enough to keep them on their toes, they don’t have to be better then them. Hopefully the Intel video offerings will catch up quickly so that they aren’t alone in challenging Nvidia. You make a great point mentioning ARM. Arm is getting me really excited and I’m hoping they become find wider market share.

I don’t want a world where Intel and Nvidia have no competition because that will be an slower, less innovative and more expensive place. Gamers need to stop fanboying so hard and embrace competition.


@JoshHowl @PhaseLockedLoop
Very interesting and to me thought provoking. Thank you both for your posts!

I think you have a misunderstanding I’d like AMD to be far more disruptive than it is now. They have the potential to do so. Look at the potential that the PS5 chip reveals that’s been rumored and spotted in the wild

This is true and while Lisa su has been better it doesn’t make her very much different. Yes she got the company on track and deserves praise for that but its time for her to be disruptive and it seems she will not be taking that path but rather sustaining what she has with the ryzen 3000 series… And navi… Which probably won’t sell at all what the hype is stating it will and hey if I’m wrong I’ll be glad to be wrong in this case. I don’t have ill intentions towards success. However, is it really much more different than a flip flop of the GPU markets vs CPU…

Intel did sustainable innovation for ever with CPUs until AMD caught up . it will be the same in the GPU market. Its why Jenson has captivated the public so well.

I really feel this pushes my point that they rely heavily on these tactics and it will screw them up eventually but in order for that to happen AMD cannot continue to push sustainable innovation they need to truly disrupt in every nvidia has not. Create market nvidia would have to pay so much money to catch up in that they couldn’t catch up. Forcing nvidia to go the path of DEC

Do you understand my point at this point or should I clarify more where the confusion occurs?

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You didn’t include that as an option in the poll, cheater


Or an all of the above option. Because all of the options is the right answer to a certain extent.

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@Goalkeeper the point was that it was a trick question

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It is quite an oversimplification, and I’m sure there are market analysts and business deals that have a large impact on a company’s business decisions, rather than just consumer interest.

Many companies also have ventures outside of consumer markets, NVIDIAs automotive stuff for example. Things like that by nature cannot be impacted directly by the desires of the end user.


But all these deals are ultimately down to satisfying their customer base. Company self interest is always for its customer base in someway… Whether its to squeeze better profit margins from there or to provide a disruptive good quality product…

I don’t really see how NVidia is held hostage by their consumers. I mean they kind of forced GPU prices to go up considerably so naturally less people were going to buy the RTX Turing GPUs than they did for Pascal, not even counting the fact that the upgrade in performance wasn’t that big (it was there alright but not that big).

Going to the whole point, this is partially correct, consumers can vote with their wallets and really should because it’s their money and does make a tangible impact, but if a few companies are going to try to own everything and become some monopoly of sorts where they cover all grounds of business and only compete with another company that does the same (think Google vs Microsoft), you may as well go to the woods at that point. I think they have gotten too big and powerful for society’s own good and we are seeing the damage slowly leaking out of it as of late.

Besides, you can’t expect large corporations to be honest about how they conduct their business anyways. They don’t always play by the rules nor do they want to.

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Do you understand my point at this point or should I clarify more where the confusion occurs?

Thank you for clarifying. We have more in common in opinion then I realized.

I really feel this pushes my point that they rely heavily on these tactics and it will screw them up eventually but in order for that to happen AMD cannot continue to push sustainable innovation they need to truly disrupt in every nvidia has not.

I agree completed but I don’t think AMD is going to rush it. They lack the Nvidia only features and there isn’t really a platform that will let their GPUs excel yet. AMD’s work with Vulkan, their commitment to open standards and working with Linux are investments that haven’t quiet paid off yet.

I also don’t think Nvidia will lose sight of AMD like Intel did. They released the RTX line, days before the Radeon VII announcement and completely stole AMD’s thunder. The release of the 1660ti and the 1660 show that they care about the less expensive market segment and don’t want AMD to keep it. Those cards are tailored to the minimum dollar to power ratio needed to steal market share from all the Radeon 590/580 cards. Nvidia will fight to keep their market share.

That being said, Nvidia’s is showing some signs of losing their stranglehold. The Recent release of RTX cards was luke warm and felt rushed. Ray tracing is being seen as a gimmick. They have been forced to support Vulkan and Free Sync. I think AMD has planted the seeds to weaken their foundation and I hope they have a hammer and chisel being developed down the line.

I’m super happy the vii came out, it fits my needs but maybe it wasn’t the best financial decision for AMD.
Maybe we as the customer are wrong on a lot of things, you’re likely right.

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They have always been good at doing this. Jenson is a marketing genius. He knows what he is doing with this sadly AMD isn’t. See they also have huge potential to market against nvidia but they don’t they just gonna it for stats and I think that’s so wrong. I think they could truly exploit the hate most have for team green and capitalize on it with well targeted marketing… But they don’t… They just argue the cheaper just as good solution and that’s not going to win them anything. They need to exploit specifics we hate. Target nvidias practices and show how they will free the gamers from it. Cultivate a god damn culture… Like nvidia did

Kind of my point in the post that they suck at doing this

Thanks for this, this is an excellent intro into something I hadn’t considered before.

Also makes nvidia’s acquisition of mellanox make even more sense.

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Yeah, that is a good point. Hurry up AMD!

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