AMD wants chips consumed higher up the food chain

AMD is hoping to duplicate its successful penetration of the consumer PC market with a drive into the low-end server and workstation sectors.

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By  Rob Corder Published  November 29, 2000

AMD is hoping to duplicate its successful penetration of the consumer PC market with a drive into the low-end server and workstation sectors.

AMD will take the same evolutionary-minded approach to the server market that it has to the desktop space, using agreed-upon standards to minimize costs while driving ahead with its own technology initiatives.

"All of this adds up to higher levels of performance than anything else we're competing against," said Bob Mitton, divisional marketing manager for server products at AMD.

But AMD's expertise in designing consumer PC microprocessors will only get them so far, analysts said. Potential server OEM customers said they're less interested in the strident one-upmanship that characterises the PC market, and will ask AMD tough questions about the stability, reliability, and cost of the AMD platform.

"This is clearly a much more conservative audience than even on the business desktop," said Rich Partridge, an analyst at D. H. Brown and Associates in an interview with TechWeb News. "Consumers want to brag about the fastest, meanest chip on the block, and business desktops want to maintain consistency to minimise support costs.”

AMD executives have said they plan to offer dual-processor systems for entry-level servers in the first half of 2001. Top-tier OEMs will likely eye the new AMD offerings from a distance.

Executives responsible for designing and marketing servers at top-tier OEMs generally declined to comment on the record, as the companies involved have not committed to or away from AMD's microprocessors. But opinions on the company's prospects varied widely.

Each of the three OEM executives interviewed were concerned with reliability: First, AMD's ability to manufacture and deliver products; second, a planned, stable roadmap to faster clock speeds and improved technologies, and third, an adequate supply of validated chipsets.

For one thing, customers may have to ask for AMD by name. Like their own IT customers, server OEMs will need a compelling reason to design in AMD chips, and second-and third-tier vendors will probably be first to take any risks.

"The question isn't so much from a component standpoint, it's that they have to deliver compelling arguments from a price/performance standpoint," said one source at a top-tier OEM who is responsible for strategic design decisions.

"For a long time, IT groups shied away from AMD because of reliability, and there's going to be that IT perspective in the server space. But also consider: how many people do IT staffers support? Take a company like Boeing, which may run exclusively on Intel. If you suddenly expand the knowledge base of that IT department, it gets very, very costly."

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