Mr Chippy

After a number of problems, AMD is back on the rise. Newly appointed president Dirk Meyer tells Alicia Buller how he intends to take on, and beat, his arch rival Intel.

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By  Alicia Buller Published  April 30, 2006

|~|AMD-hq-200.jpg|~|SURGE: AMD saw revenues hit US$1.33 billion in the first quarter of this year.|~|After a number of problems, AMD is back on the rise. Newly appointed president Dirk Meyer tells Alicia Buller how he intends to take on, and beat, his arch rival Intel. While posing for pictures, Dirk Meyer is asked if he can do something for the cameras that shows him in action at work. “You want me to yell at someone?” he jokes. Meyer doesn’t look like a man that gets excited by microprocessors. Which is a compliment, of course. The newly appointed president and chief operating officer at Texan computer giant AMD even admits that he dreamt of being a professional baseball player for most of his early life − eventually conceding that it might not have been “all that realistic.” Still, landing up as number-two-in-chief at the world’s second largest microprocessor company can’t be such a bad booby prize. AMD (short for Advanced Micro Devices) saw revenue surge 70 percent during the first quarter of 2006 as it continued to chomp at market share from its rival chipmakers. Cheering news for AMD − a company that has been left on its knees more than once in the face of innovational constraints, ongoing legal spats and antitrust issues with its nemesis and arch rival, Intel. “If I had to say I love or hate Intel, then I’d say I hate them,” says Meyer somewhat unequivocally. But right now, it looks like he can afford to congratulate himself on a good square-up. AMD revenues for the first quarter 2006 were US$1.33 billion, up from US$780 million in the same quarter in 2005. And while this has a lot to do with the fact that AMD lost US$17 million in Q1 2005 based on poor performance by Spansion (a former ‘flash memory’ venture that was spun off from the company late last year) − it’s still a monumental upturn. And without the distraction of Spansion things are set to climb, and climb. The performance of AMD so far this year is currently surprising even the most prescient of analysts. As Meyer says himself rather smugly “22% of customers now choose AMD over Intel.” But there is a flipside. Because the fortunes of AMD have taken such a colossal turn for the better, much of the world will now be watching. Waiting. Anticipating. Perhaps this is why, two months ago, the company appointed Meyer to become president and COO of the microprocessor solutions sector, a new group that will oversee all of AMD’s development in this field, “microprocessors are the brains and the foundation of every computer,” explains Meyer. The promotional move effectively makes him head of their flagship product division and all its attendant strategy, product innovation and people management. So it’s just as well that Meyer claims to love the human side of business. “I love seeing people excel. A business is nothing without the right people, and I like seeing them blossom,” he says. “It’s a big role and it’s about people, strategy and execution. My new job as president is ultimately about business execution. And while I will concentrate on the inside of the company, Hector Ruiz [CEO, AMD] will look outside more − towards the stakeholders.” It’s not the first time Meyer has been tasked with leading the company through a particularly crucial moment. The new president, along with Ruiz, is considered one of the key architects behind AMD’s turnaround. In the past, AMD produced chips that were largely based on the same designs Intel used but cost about 25 percent less. This made it difficult to gain market share or turn a profit. Barred by a legal agreement from using the same bus as Intel on its K7 chips (the code name for the Athlon architecture), AMD created the Athlon, which sported a bus from digital enhancements. Released in 1999, many versions of the chip outperformed equivalent chips at Intel and allowed AMD to return, at least for some quarters, back to profitability. Most importantly, the chip also helped AMD land design wins with most of the major PC manufacturers − which stand to this day. The world’s technology hacks subsequently crowned Meyer the “Father of Athlon”. How does it feel to be bestowed with such a title? Tellingly, the AMD president snorts and says “yeah, and I’m still looking for the mother.” Meyer, it seems, is a man that prefers the future to the past. But he still beams unmistakably when telling the story of how he led the ailing company back to success. “It started when we acquired NexGen, a smaller chip producer. This formed the basis for a new product as we acquired some good people,” he explains. “I didn’t realise see it as an engineering challenge. I saw it more as a people challenge. The team that fathered the Athlon chip was actually around 100.” But did he design the chip himself? “No,” he says, “I led the team that did.” It comes as no surprise that Meyer has big ambitions for his new role as president of AMD. After all, he is now one of the powerful and influential men in the world of technology. But it’s not this power that drives him, “I don’t think about it, it is not important to me,” he says. No, what really bothers Meyer is, you guessed it, Intel. It doesn’t take long for a cheeky, unmistakably all-American, grin to spread across his face, “if I’m honest, I enjoy giving Intel a hard time.” Indeed the shenanigans between AMD and its arch rival have kept the world’s technology rags in business of late. But what really, really bothers Meyer is monopolies. “Meyer says it is his ambition to cut Intel’s stranglehold on the microprocessor market. “I have a clear vision. I want to break Intel’s monopoly. I believe that is what our customers want. Currently Intel’s stranglehold is 85% of the market. I want to bring this down to 65%, which is no longer officially a monopoly.” The president plans to call on his team to help him achieve this goal. “I don’t believe in a top-down management style, even in my new role I will never make any decisions solely by myself. I don’t believe in absolutely declaring that we are going to do this or that. It always has to come from the team.” Meyer says that to achieve this, AMD will have to focus on the nature of its branding. “We need to concentrate on strengthening the brand. We already have a strong corporate brand in the minds of our B2B customers: channels, retailers and value-added retailers and we will focus on building on this,” says Meyer. “However it would be foolish to think that we can outdo Intel’s mindshare from the consumer because we are a much smaller company. We want to focus on the preference share on the retailer side.” Not to miss out on a chance to diss his rival, Meyer explains a little further: “I find it amazing that the Intel brand has so much awareness when it is not a complete product, it’s just an ingredient. No other ‘ingredient’ gets that kind of awareness. AMD also provides ingredients − but we prefer to give the limelight to our partners who actually deliver the product.” And just in case you’re not quite sure of where the president stands, he adds “AMD is a brand for our customers. Intel is not.” With this kind of single-mindedness, it’s difficult to believe that Meyer won’t get what he wants. “I want to double AMD’s market share within the next three years,” he says. “And, yes, I am man that is used to getting what he wants. Every time I set a goal for myself I happen to achieve it. I have been very lucky with the choices I have made, things have always gone my way and the choices I have made have generally been beneficial ones. Stubbornness has also helped,” he jokes. “But luck never comes along just by chance, you find that people always have prepared themselves for it,” he adds. Meyer is honest. About AMD. About Intel. About himself. And you get the feeling that it is this very directness that propels him through in life, and his career. There’s a lot to be said for simply getting on with things. “Can I use the analogy of driving on ice? Is that okay for Dubai?” he asks. “I am ambitious. When you’re driving on ice, wouldn’t you like to be the driver, not the passenger?” Actually, some people enjoy taking a backseat − particularly when they’re driving on ice. But not Meyer. It is this will to win that might just make the difference between Intel being a monopoly, and not. “If you expect good things, they come to you,” he philsophises. And, judging by last quarter’s results, it looks like Meyer may well be onto something.||**||

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