Page Two

By eweek  |  Posted 2002-12-02 Print this article Print

: Ruiz Interview"> eWEEK: The reason I ask is because there are a number of OEMs out there that wont consider AMD. Ruiz: You [bring] up an entirely important point. We have these people in the middle that are responsible for delivering to the enterprise the boxes. And these people in the middle frankly are, and Ill just be totally blunt with you, theyre scared to death to respond to the enterprise positively of AMD for fear of retaliation by Intel. Its just as simple as that. I could give you numerous examples of enterprise people who say they would love to see boxes with AMD products in them. But they expect the PC maker to provide that option to them, and they dont. Although, its changing, HP [Hewlett-Packard Co.] is now providing commercial units in this space. … Its changing. But theres no doubt that these PC makers are frankly being held hostage by the tremendous market power of our competitor.
eWEEK: So what can you do proactively to try to change that?
Ruiz: At some point in time, I think it is getting very close to that, the compelling price/performance difference is so huge. … Were not talking about a 5 percent difference, were talking about a gigantic difference that just fiduciary responsibility to shareholders demands that some of these PC makers have to pay some attention to it. eWEEK: Im hearing from PC makers that customers are just not asking for AMD. So where does the education process begin, with customers or PC makers? Ruiz: There is a big difference between saying, "Our customers are not asking for it," vs. "Our customers are not willing to accept it." I think people are playing [tricks with words] with this issue. There is not an enterprise customer Ive talked to, and Ive talked to many, who wouldnt say, "Things are now pretty even, well be willing to consider AMD as a solution, but we need the PC maker to offer us that solution." eWEEK: Its a chicken and egg situation. Ruiz: Absolutely. But I feel weve made a lot of progress on that side. We now have to figure out how to work with the PC makers, and say, "Look were going to give you …" I mean, Ill give you an example. If I could just say some numbers off the top of my head. If Intel makes 100 million units, which is about roughly right, and the average price is about $200, were talking about $20 billion in revenue. If everybody that bought Intel parts would switch over to AMD, just that alone would save the industry $10 billion. I think theres a lot that PC makers could do with an additional $10 billion. Maybe make the boxes better, more attractive … The reason that wasnt an issue before was because the total cost of ownership of the enterprise, the CPU part used to be almost negligible. And so the cost of ownership was a lot bigger. I saw some data from McKinsey several years ago where the CPU portion of total cost of ownership was less than 5 percent. But that has changed. Now, with the IT industry and the CIOs becoming much more savvy about whats going on, thats becoming an important part. And I think theyre asking the right questions. So, were in the throes of this thing changing. eWEEK: What would you say to an end user or an OEM that said AMD is a risky proposition? Ruiz: Well, when we hear that what we do we is present all the data. We hired an individual a couple of years ago. His total focus was, Lets get these enterprise people familiar with AMD and start to show them … they really would not object to an AMD solution. Were now collecting enough data. Were holding CIO summits regularly to do this. Now when a customer expresses some of that concern, by the time they do that at a high level, weve already worked with lower-level people. … eWEEK: How often do you have the CIO summits? Ruiz: Every six months. Between Austin and Sunnyvale.


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