AMD Expands in Enterprise Market

The chip maker's high-performing Opteron chips are opening the door to greater enterprise server and desktop adoption.

Advanced Micro Devices, buoyed by the success of its Opteron server chip and rapidly growing market share, is beginning to win over more enterprise customers.

The chip makers main goal for 2006—as it has been for most of the past decade—is to expand its reach into the enterprise on both the desktop and server platforms.

But the difference now, AMD officials say, is that—after years of the company trying to gain a greater share of the corporate PC market—customers are giving AMD more of a chance, thanks mainly to the performance of its Opteron chips.

"Theres been a little faster comfort level reached with [AMD] than what Ive seen in the industry in the past," said Kristi Browder, director of IT at Silicon Laboratories, in Austin, Texas, and president of the Encompass HP User Group.

And Browder isnt alone in her thinking. Recently, Fujitsu-Siemens Computers and Hewlett-Packard—AMDs biggest proponents in the corporate client space thus far—have signed contracts to deliver tens of thousands of AMD-based clients to the U.S. Air Force as well as the German and Mexican governments.

Together, AMD officials said, the German and Mexican deals inked during the fourth quarter are for 100,000 units.

/zimages/4/28571.gifClick here to read about AMDs fourth-quarter share gains.

With such momentum, AMD officials said, they believe the chip maker will double the number of corporate systems available with its chips in 2006, giving it greater reach in the business space than ever before.

That change, they hope, will cement AMDs position as an alternative chip supplier to notoriously conservative businesses that until now largely have been Intel shops.

"As we look at the largest [corporate] customers in the world, 90 out of the top 100 companies in the world now have adopted … and are using AMD products in their environments, and that includes both servers and clients," said Brent Shaw, director of AMDs newly formed Commercial Go To Market Team, in Austin. "The charge has been led with servers, but we were starting to see, throughout 2005, a trend toward our client products as well."

AMD wants to continue that momentum, using its server chips as a wedge to gain greater access to businesses. To that end, the company has launched efforts such as its business Go to Market Team, which comprises about 100 people who make calls on customers and provide support.

It also has launched programs designed to add greater stability to AMD-based machines—for example, its Commercial Stable Image Platform pledges to lock in certain hardware for 15 months to help avoid costly upgrades and compatibility issues—and to work with the reseller channel.

Silicon Laboratories, which designs semiconductor products, has been using HP ProLiant systems running dual-core Opterons since last year, first for engineering workloads and, more recently, for business applications. The price/performance capabilities of the technology are driving the companys adoption, Browder said.

Having had success with the Opteron servers, Silicon Laboratories is now evaluating an HP laptop running AMDs mobile Turion 64 processor—playing out a scenario AMD officials hope will happen all over the IT world. "We were looking for a second source in laptops, and as part of that second look we are evaluating this," Browder said.

/zimages/4/28571.gifRead details here about AMDs plans to increase chip memory.

As president of Encompass, Browder said she also is seeing interest from a growing number of group members. "It used to be that we could get our [AMD-based] boxes fairly quickly," she said. "Now its taking a certain amount of time, and thats being driven by demand. But theyre working through that. Were starting to send our orders in earlier."

Ultimately, a greater share of the business market would help AMD—historically a distant second to Intel—move toward its goal of grabbing 25 to 30 percent of the overall market by 2008 or 2009.

AMDs overall x86 processor market share jumped to 21.4 percent in the fourth quarter of 2005, up 3.7 points from 17.7 percent in the prior quarter, the company said last week, citing figures from Mercury Research, of Cave Creek, Ariz.

During this period, AMD saw its server chip market share increase by 3.7 points, to 16.4 percent, while its desktop market share improved almost four points, to 24.3 percent, and its notebook share grew by almost three points to 15.1 percent, according to the Mercury Research numbers.

But having finished 2005 as a whole with a business market share of 18.2 percent, up about 2.5 points, AMD still has work to do to meet its ultimate goals.

Part of that could be winning Dell, the only top-tier systems maker not offering AMD chips in its systems. AMD officials have said they dont need Dell to meet near-term goals, but eventually the company could impact the chip makers enterprise future.

For its part, Intel has laid out a product road map designed to close the technology gap with its rival. The chip maker lost "some market segment share last year," a company representative said last week.

However, Intel expects to gain back the ground it lost. Its upcoming lineup, based on a new processor architecture, will include higher-performing and more energy-efficient dual-core processors for desktops, notebooks and servers, company has said. The lineup, analysts say, will make Intels chips more competitive with AMD products.

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