August 18, 2006 2:30 PM PDT
Dell on AMD through the years
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Dell has offered dozens of reasons over the years as to why getting together with AMD would be a bad idea. "There's not enough of a performance advantage;" "We need lots of chips, more than AMD can produce;" "Introducing another chip supplier into our exclusive partnership with Intel would complicate our lean manufacturing line;" And, perhaps most often, it offered this reason: "Our customers simply don't want AMD's products."
However, more than three years after AMD introduced its Opteron and Athlon 64 processors, and after AMD's server market share has vaulted from basically nothing to 26 percent, Dell has finally changed its tune. It plans to use AMD's chips in servers and desktops this year, and sources familiar with its plans say notebooks aren't far behind. Clearly, somebody's customers are demanding AMD products.
But is Dell too late to ride the wave of AMD's success? Its embrace of AMD comes after Dell's rivals have already made friends with the chipmaker. A renewed Hewlett-Packard is stealing all of Dell's thunder, IBM is planning to broaden its use of AMD technology, and Sun's AMD servers have given it hope for the future.
A look back at Dell's public comments on AMD over the past decade reveals a roller-coaster ride through the marketing textbook, while AMD executives have shown a mix of optimism and resignation over the years. Here's a sampling of some of our favorites.
The early years
"I've wasted time every year for the last eight years looking at [alternative processor] vendors." --Michael Dell, founder and chairman at Comdex, November 1997
"I can't sell a K6 to that guy no matter what I do," Jerry Sanders, AMD's founder and former chairman at Comdex, November 1997
Until there's a "significant disparity between price and performance" with AMD and Intel chips, Dell will stick with Intel. "It doesn't mean AMD is a bad company, but it doesn't give us a significant leveraged advantage." --Tom Meredith, Dell senior vice president of business development and strategy, May 2001.
"We're very interested and we're looking and there's not much more to say about it in public." --Michael Dell on AMD, April 2002.
"We still don't see a strong demand from our customers, and nothing has changed about our strategy going forward," said Steve Felice, vice president of Dell America's Corporate Business Group, which manages relationships with the Fortune 2000, on AMD in October 2004.
"We're the most successful PC company on the planet and we don't have AMD. Could I do it? Yeah, but why?" --Kevin Rollins, Dell CEO, October 2004.
"The bigger problem is the complexity that [AMD] throws into the (PC or server) product line. We would have to have a separate R&D group to do those products, and that would have to be sequestered from the Intel team. That adds inefficiency right off the bat." --Rollins, November 2004
"We're not getting an overwhelming customer surge that says, 'Dang it, I won't buy unless you get them.' There are some who say that but, again, it's not very large." -- Rollins, November 2004.
"[AMD has] done some nice things, and they are making some headway. Do I think that that's going to be enough to have us move off (of Intel)? Well, now it's looking like no. For a while, it was looking like yes." --Rollins, February 2005.
Pressure starts to build
"AMD has made a lot of progress. The issue is that Dell is still Intel's only 100 percent-Intel customer. Intel has a lot of market power to keep it attractive to them to stay that way. I think that ultimately, Dell tends to go with leadership technology and very cost-effective solutions, and AMD has got to be able to do that for them to consider it. --Mort Topfer, former Dell executive and current member of AMD board of directors, March 2005.
Interest in AMD's chips is coming from "tire kickers," not serious buyers.--Michael Dell, April 2005.
"We'd love to have Dell as a customer, obviously, and we'll continue to always work hard at it. But you know, frankly, if you take the extreme that if Dell were to publicly say they really no longer have an interest in AMD, and they're not going to do it, they lose all the leverage with the other supplier. So I think by definition, they'll never say that." --Hector Ruiz, AMD's chairman and CEO, April 2005.
"Intel takes a very definitive lead in performance and power management at 65 nanometers...If we thought AMD was going to be supercompetitive in the spring and fall of next year, we'd be introducing AMD products right now," Michael Dell, October 2005.
"Our plans don't take in account Dell's management decisions, but we can handle Dell if we have that opportunity." --Ruiz, November 2005.
The dam breaks
"It's a distinct possibility," --Michael Dell, January 2006.
"Our customers expressed a desire for that technology. We will still be launching this year a broad base of Intel products."--Rollins, May 2006.
"We have been out of the AMD technology market all along the growth of that business. Customers obviously are wanting that technology, so we listen to them now. The [other] issue is the overall cost issue; it benefits us and our customers by having multiple suppliers, so that's what we're doing." --Rollins, August 2006.
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