Dell on AMD through the years

Like the popular cheerleader who finally talks to the geek when he strikes it rich, Dell is paying more than a little attention to Advanced Micro Devices these days.

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.

Postlaunch flirtation
"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.

[Russell Heistuman]

Times Change: Apple is now Intel's only 100% Customer

I wonder if Intel's decision to court Apple might have had as much
effect on Dell's decision to entertain AMD as any technological
advantages AMD might have had. Dell is no longer the prettiest
courtier in the court and Apple has entranced Intel like no other PC
manufacturer has. I'm sure there is some priviledged access to Intel
engineering that Apple leveraged in the decision to abandon the
PowerPC that Dell is jealous over. In response, they're taking their
affections elsewhere.

[Lindy01]

Dell

does not care what apple does for the most part. Apple is NOT a threat to anyone but themselves. What do they have 3-7% of the market?

Dell is worried about HP and IBM....plain and simple.

All this hype about Dell using AMD is just so much hype. Does Dell sell a AMD system right now? One server...desktop....or laptop? Not that I know of but you can buy "Core" based desktops and server right now....and they out perform AMD offerings in every aspect.

Personally I think its to late. Anyone asking my advice about buying a system would get nothing but "Buy Intel Core". The only way I would not suggest using a AMD is if it was signifigantly cheaper than an equvilant "core" platform.

AMD has peeked for a while and Intel has got of its lazy behind and is back in the game....very much so.

[cameronjpu]

What about Toshiba?

Doesn't it count? Huge notebook maker.

[NoNoBadDog!]

Apple not the only 100% Intel

You seem to have missed the fact that Toshiba and Sony are also exclusively Intel. That is why their sales are dropping.

[Jerry Dawson]

All I know is this..

I build and sell computers as a sideline. The K6 was, in terms of cost and performance, a complete winner. The K7 had heat problems - not entirely due to AMD but to the whole design of the MB/CPU/ Heat sink. At the moment, with Intel, you get a good chip but a very noisy and poorly designed fan/heat sink assembly. Usually, you get to buy the whole shebang as one item. I have already ripped out the whole cooling system on one computer and replaced it with a Cooler Master liquid system - and a second is due because of the noise.
On the other hand, AMD, who have never linked their chip sales to a cooling system, look ever more attractive.
That's my 2 cents.

[teeter3000]

AMD and Apple's Core

Just two cents... I've chided Dell's past few years performance as much as anyone, but I still have a tremendous respect for the company...even if their latest iteration doesn't fully represent what's great about the company. That being said, I've also big a big fan and have supported AMD's products for years now...to the point where I've avoided Dell's products for personal use and went with custom-built machines.

For the money, AMD makes and supports fantastic hardware, incredible performance, and if nothing else, represents that all-important 'competetive-edge' that Intel so desperately needed...for years Intel's coasted on their name, overpriced technology (Celeron, anyone?) with inferior processing power for the buck.

This may be just one person's opinion, but in my experience AMD's chipsets versus Intel's offerings (coupled with comparative hardware) offer better performance at a much better price value for the average consumer. I've found this to be true with multimedia, graphics processing, games (yeah, baby!), memory management, and overheating. I'd take either if the prices were adjusted, but I'd prefer AMD at this point.

p.s. interesting note...for year's I've been hearing of Mike Dell's love for Apple...now that Intel provides Apple's core (bad pun), virtually making them indistinguishable from the typical PC-box...when will Apple put the pieces together and provide a PC- version of their OS? Isn't it time? I'd gladly run the newest Apple OS on my PC...just a thought.

[zaznet]

Mac OS Everywhere...

It would make sense to release Mac OS X for the PC since it would be possible to install it on most current PC systems in use. It would also offer Apple a chance to grab a substantial year over year gain in market saturation which would bring more software developers over to the Mac.

The downside is they lose control over the quality of the experience by introducing many vendors for hardware that Apple has not worked with closely in the past. These include network cards, video cards, hard drives, sound cards and any other internal devices you could think of as well as the main boards and CPUs such as those made by AMD that currently are not used by Apple.

I hope they do it, they would have a lot to gain, but it is still a long ways off.

[Lindy01]

I just dont

understand this love affair with AMD. I have been in the IT buisness for about 19 years...with most of my time spent first on Novell and then Windows server platforms.

I have always built my own PC since my first 8mhz 286.

AMD was notorious for quality problems for a long....long time. Their CPU's back in the 386/486 knock off days would just flat out die from heat problems and other issues quite often.

AMD did make their own chipsets for a very short period of time then they stopped for some unknown reason. After that they had to rely on VIA, SIS and NFORCE.....all of which cant hold a candle to Intel chipsets even to this day. NFORCE is the best for AMD and its got all kinds of problems...dont every load their IDE drivers or turn on that built in NIC firewall unless you want major corruption.

AMD got it righ with the AMD64 right when Intel got it wrong with extending the P4 past the NorthWood core. Prior to that Intel had the lead. Sadly it took Intel two years to see the light and go with the Pentium M made by the Israel Intel team.....and now we see the "Core" which has regained the lead.

In that 2 years Intel has lost some market share...but they are still the clear leader. With the release of the conroe, mermon, and the woodcrest combined with the fact that AMD just cant keep up with Dell's demands....Dell will still sell 90+% Intel for at least the next two years.

[ilover2]

Dell is just reacting to their Business model failure

It does not matter what DELL puts in their systems. Many missteps have led to their downfall:
- Their ugly and unreliable design of notebooks and desktops
- No specificied identity anymore: are they a consumer device company or a pc company? They went in many businesses which did not pay off.. Anybody remember the lexmark deal? At least Apple deffrentiated itself as the company with the cool desgin who is focused on bringing awsome products to the market.
- Customer service anyone.. THe horror continues!

The way I see it, AMD will not rescue Dell. As a matter of fact, it will cost them more to add to their products . They have to have a separate R&D dept. If AMD does not deliver to Dell, it will lose credibility that it worked so hard to build over the last 3 years and in the process will add to the Dell's spiral. The other threat that Dell and other OEMs is in Denial about is Apple. Watch what they are doing and you will know that Apple is planning a coupe! They had market share of 2-3% last year and now they are 4-6%.. They are introducing workstations and cool notebooks..

For the next couple of years at least: Dell will continue losing market share to HP and IBM. Apple will resurge with Intel chips because Intel will make sure of that!

Apple is planning a coupe?

Next they'll have to design a sports sedan, an suv, etc. I think you mean coup d'tat? or maybe Apple is diverging into the iCar market - cars that look like refrigerators, and can only be fueled at the iGas station! Then Dell will start selling hybrids....

[mabradford]

Dell vs. AMD

I've worked straight up and also owned Intel and AMD CPU's and motherboards since the dawn of time when the AMD K5 came out and whipped up on Intel's DX2/66. I've been running LAMP servers since 2000 and I started with Intel - but, as soon as they burned out from work load in late 2002 - I switched to AMD (Barton) Athlon XP's and I have 3 of 3 running and it's August of 2006 (flawlessly) with only having to replace hard drives. They are in the basement as we speak - running SuSE 10.1, effortlessly breezing away. I left my former company with a 4 year old Athlon XP running NT4 as a SQL server - it's still running...just reboot MS SQL every 2 weeks. When I was still employeed there - I literally replaced all 9 Dell Intellie Servers and all 55 Dell Intellies at least once during 4.5 years...most within the 1st or 3rd year. Want job security at keeping Dell Intellies on the floor - then buy Dell Intel. AMD is by far more stable and runs longer (as long as you keep them cool). So - want longevity and stability as well as performance - buy AMD.

mb

[mabradford]

Throw away Cell Phones or Throw away Intel

Since 1982 I've thrown more Intel CPU's and motherboards away than any other system. Now that MacIntosh has gone Intell - it too will become a throw away - unlike before when you had to beat a Mac with a hammer to break it. My daughter just threw her Performa 6300 that I bought her back in 1996 - because it was slow, tired of looking at it and after her children beat it up - it was still running kids programs - but, in the way. So - a perfectly great computer got buried alive - in the dumpster. That's the difference between Intel and Mac. To make more money - you have got to get people to break things and throw them away. That's why Mac is going Intel. It is no longer Mac's fault if your computer fries...that fault now lies on Intel's shoulders. Smart move Jobs...maybe now you can build throw away computers like Dell...and make a bundle of money doing it. :)
mb