AMD lines up troops against Intel

AMD has outlined its grand vision on the back of the success of Opteron with internal targets of 30 percent of the business market by 2009.

Traditionally known as either a second-tier processor company or a gamer-oriented niche player, AMD now calls on CTOs at big Wall Street and Silicon Valley companies. The hugely popular Opteron has opened the boardroom door, and now the company wants to do the same for its desktop and laptop chips, said Ben Williams, vice president of AMD’s new Commercial Business unit.

Three years ago, AMD had very few server customers. But Opteron with its integrated memory controller and 64-bit extensions to the x86 instruction set, has captured the attention of Sun, HP and IBM, among others.

“IT managers are telling us, ‘We’re buying your products in the data centre, now we’re interested in understanding what you’re offering in the client space.’ That discussion hadn’t taken place before Opteron,” Williams said.

Hence AMD’s 2009 target. Right now, the company has under five percent of all desktop and notebook processor shipments to business customers, and 11.2 percent in server processor shipments.

AMD thinks it can attract corporate PC customers by pointing to the company’s improvements in managing power consumption as evidenced by Turion, its first mobile processor considered on a par with Intel’s Pentium M notebook processor. The company also believes its dual-core processors have a more elegant design than Intel’s, which will translate into improved performance in successive generations.

The ascent begins with pitching desktop and laptop chips to specific markets, such as transportation and financial services, Williams said. This approach worked well for Opteron, which was initially marketed to high-performance computing customers and research organizations, he said.

But the company will have a tough road ahead of it trying to erode Intel’s advantage in corporate IT departments, said Roger Kay, president of Endpoint Technologies Associates. “There’s not a whole lot of energy coming from the end user market or the [PC vendors] to increase the percentage of AMD dramatically,” Kay said. “But on the other hand, they aren’t against it either.”

Adding AMD-based products means additional costs for both PC vendors and IT departments to support and qualify the new systems. Software images built for Intel PCs wouldn’t necessarily work on AMD PCs, and Intel-only PC vendors like Dell would have to set up additional testing teams since AMD-based PCs use different chipsets and motherboards from Intel PCs, Kay said.

If AMD can demonstrate enough of a performance or manageability advantage to IT departments, they will consider switching, Kay said. However, there is still the somewhat larger matter of Intel’s monster marketing machine

AMD filed an anti-trust lawsuit against Intel in June, claiming it was using its marketing budget to selectively distribute rebates to PC vendors that agree to keep their usage of AMD chips at a certain level. AMD believes this practice of exclusionary rebates is keeping it from gaining market share, despite favorable reviews from chip experts and benchmarks showing better performance than Intel’s chips. Intel doesn’t deny the existence of such programs, but vehemently denies that the practice represents unfair competition.

The case is not expected to come to trial until the end of next year. However, it will be hard for AMD to grow at the rate needed to reach its target without a little help, Kay said. “Somebody has to clear away some of the institutional inertia for them to get beyond where they are now,” Kay said.

News source: Techworld


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