Commercial Ventures

By eweek  |  Posted 2006-01-06 Print this article Print

How well positioned are you right now for this move into the [commercial] client space? Are these design wins in the pipeline, or are you still in negotiations with systems makers? Im confident enough that we have enough that will be showing up [in 2006] so well be reasonably able to substantiate a move in our share, but keep in mind, our share is very low, so consider the total commercial client opportunity thats served through top-tier OEMs—we barely participate in that business at all.
Weve had some individual products in the past, and do today with [Hewlett-Packard Co.] and Fujitsu-Siemens, for examples. But were tremendously underpenetrated, so were sitting here in almost the same position we were two years ago with Opteron.
Click here to read about AMD pushing for more enterprise share. Im not here telling you well have 50 percent share in the market because thats not the goal [in 2006]. The goal is to start making substantial headway, and well have the platform to do that. Will that strategy mirror what you did with Opteron? Were recognizing that its a little bit different on the client side. Given what server technology is, its a little bit easier in the server space to really differentiate in the area of product technology, just because performance is so key. Whereas in the commercial client space, particularly for desktops, performance is a little bit less of a dimension that [you can use to] differentiate. So how do you differentiate? In the near term, we still have in Athlon [64] and Athlon [64] X2, a platform thats going to have a fair amount of longevity from a software stack perspective. Its 64-bits today. Thats a selling point thats starting to resonate with people. The other benefit is just the idea that competition is good, and the commercial client space is an area where, generally speaking, there hasnt been. As we talk to big channel players, theyre all wondering, Gee, how do I differentiate my offering vs. Dell [Inc.]? If youre selling the same Intel-based stuff, and Dell is out there gobbling up share, [you start to think] Maybe I can start selling AMD, which Dell doesnt have. Thats a message you can differentiate on. Is the Windows Vista launch [from Microsoft Corp.] a good opportunity for AMD as enterprises start looking to transition to that? It is. In fact, I was reading [an article in Barrons magazine that argued that] given that Vistas really Microsofts first mainstream 64-bit client platform, and given that AMD is the only company that has 64-bits now across the product line, theres an obvious benefit, both for end users and IT shops, [to buy] 64-bit-ready hardware starting now. As you know, Vista will get released [this] year by big enterprises that arent going to start releasing it across their enterprise client infrastructure until 07 sometime. There is sort of an inertia within many enterprises that have used Intel technology in the past to continue using it rather than trying something new. How do you plan to break that? The interesting point is that markets are big, and our next step is not to get to 100 percent, but to get to two and three and five and 10 and 15. So you focus it on the people and the organizations that are a bit more willing to be different. It factors into some of the messaging youll be seeing from us that will be focused on the folks that think to the next level of specificity. The whole discussion around the enterprise and clients has begun to start to transition in the ecosystem, among end users and OEMs, from one of, Hey, why should I be using AMD? where now its really more one of, Why not? Youve proved youve got good technology. I believe your manufacturing capacity is going to increase over time, I believe your financials are sound and youre a solid, healthy company, and I believe I havent enjoyed healthy competition in this broad sector of the marketplace, so why the heck not? Youre right, theres a pocket in the ecosystem at large which is, Im going to play it safe. But were not trying to get 100 percent. Were trying to go from three to five to ten to 15 to 20. What vertical markets are most important to you? As we look at the big wins weve been getting, it tends to be among all classes, whether its manufacturing or financials. We tend to win based on underlying economics, the price-performance of the platform, platform longevity from a software perspective. How well positioned is AMD in the mobile space? Mobile is a huge growth opportunity for us from a product category perspective for two reasons. One, its the fastest growing of the three product categories: server, desktop and mobile. Two, its the area where we have the smallest share. Im not apologetic about the fact that we have the smallest share in that category. If you look at our history, we were and still are way smaller than our competition, so we focused on a smaller number of categories—desktop, desktop, desktop. We then focused incrementally on server. Next will be mobile, and the Turion stuff we have the market today is the first example of products that were, to any meaningful degree, built with mobile in mind, although even there theyre highly leveraged from a desktop product. Despite that, were enjoying success that actually surpasses my expectations on Turion, and I think the example again is simply that the performance is really good for the class of users that care about that, and the channel through which our customers sell really want competition. AMD has said that it will not offer an entire package, similar to Intels Centrino. That said, youve begun to work closely with a select group of partners to create recommended wireless packages. Can you talk about that? First off, contrast it to what Intel is doing, which is one of—with varying specificity—youve got to buy Centrino. Thats not what were doing. If you take wireless LAN, for example, we dont want to tell the customer exactly which wireless LAN they should use. However, having said that, we recognize that what our customers do want is to buy a solution with a lot of the engineering done upfront. Intel, AMD believe in the power of four. Click here to read more. So were trying to act a lot more actively as the point for a platform solution that we can offer an OEM hand-in-hand with partners, which is different that just saying, Hey, were going to walk up to the OEM with a prepaid platform with all the components. So, while you want to give your customers options, you also want to give them guidance as well. Yes, choice, but not infinite choice. It used to be a lot of our partnerships that were focused a little bit more on just sheer technology enablement, with less focus on business development. Were trying to get a little bit more specific with our partnerships. Next Page: Exploring international opportunities.


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