Competition is likely forcing Dells hand, Kay intoned. "If you dont do it, your competitors are happy because they have a club to beat you with in the enterprise," he said. "If 88 out of 100 Fortune 100 companies have Opteron servers in their lines, it means that all of them are being supplied by a competitor like IBM or HP. Its not a good thing for Dell to continue to sit on the sidelines while competitors establish beachheads inside good clients.""TBR believes Dell will endorse AMD processors in its PC products within the next two years," Brooks Gray, an analyst at Technology Business Research Inc., wrote in a recent report. "TBR expects Dell will target white-box vendors with Dell-branded AMD-based PCs, and with non-branded platforms via the OEM group. It is likely that Dell would substitute AMD-based systems for its current Celeron desktop platforms. The consumer and value-oriented Dimension 2400 and 3000 desktop series are good examples of where AMD processors could fit into the Dell portfolio." For its part, Santiagos report suggests that AMD could soak up a fair amount of Dell machines. The analysts research shows AMD could achieve a run rate of 10 percent of Dells servers, 5 percent of its desktops and 3 percent of its notebooks during the latter half of 2006. It could jump to 20 percent of Dells servers, 10 percent of its desktops and 6 percent of its portables during 2007, he wrote. AMD would gain financially as well. Sales to Dell could bump up the chip makers second-half 2006 revenue by $144 million, Santiagos report said. An AMD spokesperson declined to comment on the reports. A Dell spokesperson said the companys plans are unchanged. Overall, Gordon Haff, an analyst with Illuminata Inc., in Nashua, N.H., said there are strong arguments for Dell to adopt AMD chips, particularly given its earnings results of the past couple of quarters. Click here to read more about how Dell handled two quarters of missed financial expectations. "Dell hasnt been doing so great recently, and one of the reasons is that Opteron has somewhat of an advantage over Intel products," Haff said. But "anybody who does not have special knowledge of Intels or Dells or AMDs executive suites is purely speculating." On the other hand, it might have been more advantageous for Dell to have adopted AMD chips six to nine months ago, when AMD enjoyed a much greater advantage over Intel, Haff said. "Even if Intel hasnt really caught up with AMD in the server space, theyve recognized their deficiencies and are clearly making the investments, clearly making the effort ... to get on the battlefield with AMD," he said. "Six to nine months ago, things were darker [for Intel]. Why [make the move to AMD] now when the battle is engaged?" Editors Note: Jeffrey Burt contributed to this story. Check out eWEEK.coms for the latest news, views and analysis on servers, switches and networking protocols for the enterprise and small businesses.
Dell might also use AMD chips to offer low-price desktops for businesses as well as resellers, in addition to consumers, another analyst said.