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Dell Might do AMD
mboverload writes "In a move that will surely make waves in the industry, Dell's CEO, Kevin Rollins, has said they may provide machines decked out with AMD CPU's if their customers really want them. "We are still looking at AMD; they have fairly good technology," said Rollins. "
Haven't they already said that several times? Someone at dell might just really hate AMD enough to play games with them.
Why haven't they done this before? I mean, a large part of their business is selling to corporations. AMD chips are very stable compared to what they used to be, they're cheaper, and they're plenty fast enough for standard business desktops. Being cheaper, you'd think most companies would go with the AMD, so that when it came time to upgrade a few desktops, it wouldn't break the budget.
Personally, being the IT guy at my company, I always buy AMD systems. About the same bang for way less bucks. And let's face it, the suits up top love it when you can add a bit more to the bottom line.
We have seen these articles before. However, with Intel having to switch to dual core to increase performance due to nearing a brickwall in the area of performance increase via CPU clock increasing, perhaps Dell sees AMD as a better partner. AMD is no longer the butt of egg frying on CPU jokes thanks to their new power saving chips that actually put out less heat than Intel's Pentium 4 offerings. If I were him, I would start with AMD64 servers, because without a 64-bit AMD server offering, I think Dell is losing alot of orders to other companies like MBX.
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Hm. Here in Ireland, Dell has their linux clustering group. I've got a feeling they'd love to offer opteron clusters to the european market, anyway. Dell's servers aren't quite as nice as IBM's, but sure are cheaper, and still have many features that home users and even ordinary linux geeks don't understand or need that add to the cost of professional machines for large clusters (remote management related, mainly, but also hot-swapping and such). I know they've probably lost several EU tenders for hundreds-to-thousands-processor clusters to Opteron vendors (note that IBM already offers cluster-oriented opteron servers...).
Dell's talked about this before and it's always seemed to me that they play the AMD card in order to force Intel to give 'em a sweeter deal. Sort of like when AOL threatens to use Netscape instead of IE as their default web browser. Just exerting leverage - they won't really ever do it (though I'd love to be proven wrong).
James
"We are still looking at AMD; they have fairly good technology," said Rollins.
AMD's technology is on par with Intel. It's their marketing that falls short.
I mean, nVidia just did this new P4 chipset to let you pull their dual-GPU trick on Intel, and since all the hardcore gamers use Athlon-64 about the only market for this chipset is Dell. If Dell starts shipping AMD there goes the market...
It might be worth it to Intel for people to continue to see the P4 symbol on Dell computers regardless of how much their losing on it. Dell does have a large market share.
Well the large market share is a problem, isn't it? It might be worth doing a deal with a very prominent but low market share "regardless of how much they're losing on it" but losing money on every unit to someone with a high market share is just losing a lot of money. What do you do, raise your prices to every other company to make up for your losses to Dell, making Dell even more competitive relative to them so you sell even more loss making units to Dell? It doesn't work.
Dells fear with AMD has nothing to do with pricing, and everything to do with execution. The Athlon launch party was PLAGUED by delay and pipeline stalls in getting parts from AMD. Dell sells SO many computers that they don't want to be forced to turn customers away to competitors if AMD started rationing processors.
Now that the Opteron has turned out to be everything it's cracked up to be, and in mass quantities in the channel, Dell is rightfully readdressing the AMD issue.
No, everyone's missing it. It's not pressure on Intel, it's pressure on AMD. Dell is saying to AMD, you must, ABSOLUTELY FUCKING MUST, meet our part quota every quarter, no shortchanging us, no sending our parts to IBM, Acer, Toshiba, because we're gonna ship 250,000 units this year, and we're not going to lose our hardwon customers to someone else. So get your shit in gear, and once you prove you can keep the pipeline FLOODED, we'll talk.
AMD doesn't have the manufacturing capacity to supply the entire world + Dell. If Dell loses their massive Intel CPU discounts, they lose the bulk of their competitive edge. If they don't offer Opteron servers (especially now that the dual-cores are coming out), they're going to take a nasty hit to their server sales. Until AMD has the capacity to mostly replace Intel, Dell just has to smile and say "Do you want HypeThreading with that?" and hope people keep buying. It helps that most people are too clueless to know what they're missing, plus even a Celeron is enough to "surf the Information Superhighway, d00dz!"
Next year, when AMD's new 65nm fab is up and running and Charter (and IBM?) start fabbing AMD CPUs too, THEN things will get interesting.
>>>> With intel, I can buy a motherboard with a intel or serverworks chipsets, which is not exactly the same than a VIA/Nvidia shitty chipset that people uses with AMDs.
>>You're obviously not a gamer.
I think what DELL needs to do is start a second in-house "brand" just to build and market AMD based solutions. - When selling to business, it can be blown off as "our gamer line" and they can keep on pimping Intel... When sold to everyone else they can call it "our cost effective" line.
It would work.
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I'll second that, given that I own a MythTV setup with two Hauppage cards. Runs just fine on my ancient PIII-700 with a 440BX chipset, won't run acceptably at all on my VIA-equipped machine with a CPU clocked at more than twice that. Heaven forbid VIA might consider DMA performance to be important.
It's a real shame too - those Hauppage cards bring CPU utilization down to almost nothing, so you can still get some reasonably use out of your machine while you're recording two channels and playing back a pre-recorded show to another client.
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Problem is, Intel manufacturing is so expensive, they can't afford to give Dell any more of a discount
Intel can manufacture cheaper than AMD. If you look at the 2004 financial numbers, Intel has much better gross margins than AMD.
Intel Revenue: $34.2B
Intel Cost of Sales: $14.5B
Intel Gross Margin: 58%
AMD Revenue: $5B
AMD Cost of Sales: $3B
AMD Gross Margin: 40%
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