Dell CEO: Direct Model Is Religion

We cant get through an interview with Dell without touching upon the issue of AMD. Has your stance on that changed?

No, it hasnt changed, but truth be known, weve always had AMD products that weve developed and been working on, just to make sure we understand where were going to be. And our promise to our customers is that well always have the best technology available for them when they need it. As we evaluate those, that will be our promise.

What are the key reasons for not adopting an AMD line [of servers and desktops]? Weve heard that customers arent demanding it and that its inefficient to support two separate server lines.

Those are all reasons. It means you have another product line, so if youre in there selling, and youre selling enterprise, what do you sell? Do you sell AMD, or do you sell Intel? Youre a sales person. You have to think about this. If you only have one [product line], you dont have to think about that. But if you have both, which one do you sell? So you have a little confusion.

The customer really wants to buy AMD, but you want to sell Intel—youre paid more to sell Intel, or AMD, and youre paid more to sell AMD. You end up somewhat with the complexity youre seeing with the Unix- [and] Intel-based systems. Youre not really seeing anyone [do a good job with that].

It poses a little bit of friction and confusion within your sales teams in terms of what youre going to sell. We say well always sell the best, but whats the best? Well, theyre different in different situations. Well, then how do you decide which ones sold where? So its confusing. Is it insurmountable? No, you can certainly get around it and you do it, but it poses a little bit of a challenge.

And then you have the development side, which also is another challenge because youre developing different platforms.

Is there any concern that by not adopting AMD technology, that youre leaving a significant amount of business on the table?

We certainly worry about that, and we track that very, very carefully. But if you look at where the inroads have been made, theyve been made in those fairly small unit volumes, theyve been in the four-way servers. Thats where AMD has made its success. To some extent two-ways, but its the four-ways where theyve been taking the bulk of the market share. Again, are they doing well there? Yes. Are the four-ways as a percent of the overall x86 market very big? No. So youre losing some units by share in a fairly important category, but is it strategically a killer? No. Financially its not. But its something we worry about, so were tracking that very, very closely as to what we would do.

Intels got a better roadmap coming up, in terms of performance and in terms of thermals in the coming year, so thats been very encouraging for us.

A better roadmap than theyve had, or a better roadmap than AMD?

A better roadmap than what theyve had, but again, it gets us much closer to parity with what AMD has been doing.

How much influence is Dell having on Intel regarding such issues as heat generation [in their chips]?

A tremendous impact, but part of this is not just that they dont want to do it. No, they want to do it. They want to have better thermal performance. Thats kind of the engineering and the roadmap and the technology. They hear about it. We dont want a product line thats at a disadvantage on any aspect, so if we are, Intel will hear about it.

Our expectation is that well get the best technology from our suppliers so that we can provide it to our customers, and any place theyre deficient, we want to know why.

Its the same thing our customers ask us of. So weve had lots of discussions with Intel about performance, about thermals, about various other feature sets that they need to make sure that theyre addressing.

And theyve done a pretty good job of responding, we believe, with a product line thats going to be rolling out this spring and this fall.

So far the performance is getting much better. Again, remember, youre talking about certain pieces of the marketplace. They still dominate many, many areas—all the client stuff, fundamentally, in the bulk and the high-volume server market.

Thats true, but theyre behind in an area thats becoming extremely important to users, in power consumption and heat generation.

Yes, but its very important to big users. Its important to everybody, but again, the most affected by it are the largest data centers, and thats a fairly small sliver of the market. Its an important influencer segment, so Im not discounting it at all. Again, how that impacts the financials, its a smaller unit segment.

Is there any level of customer demand, or any other sort of metric, that has to be reached before Dell begins offering AMD products?

I dont think its so much a level. I think the issue is, when will Intel catch up and have products that are at parity or better? If you have parity or better, why would you switch to AMD from Intel?

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