January 3, 2008 4:00 AM PST

Dirk Meyer, the man to watch at AMD

Imagine you're a director for a company that just endured a year that started off with a distribution snafu and then unraveled in a series of engineering glitches, forcing the delay of your most important product in years. Worst of all, your company's stock price dropped 63 percent.

It might be time to start thinking about going in a different direction, right? Not at Advanced Micro Devices. CEO Hector Ruiz said last month that he plans to stay on the job through 2008, and it doesn't appear that AMD's board of directors is inclined to send him packing.

Perhaps that's because they are still auditioning his replacement. AMD confirmed last month what had been evident for more than a year: President and Chief Operating Officer Dirk Meyer is the heir apparent to Ruiz. That strategy became clear years ago through a series of promotions, and Meyer is credited by some as playing a key role in the company's day-to-day operations for about a year.

Meyer is considered an engineer's engineer and was heavily involved in the design of two of the most noteworthy server processors to emerge during the last 20 years: Digital Equipment's Alpha in the 1990s, and AMD's Opteron, released in 2003. But some current and former colleagues of Meyer's say they aren't sure he's the right fit for the top spot.

Dirk Meyer Dirk Meyer, COO
and president,
AMD

While Meyer has considerable technical credibility, he is said to lack the softer sales-and-marketing touch that's crucial in the corner office. And given the debacle that was the Barcelona processor launch, some wonder whether Meyer--who ran the company on a day-to-day basis while AMD struggled to ship the quad-core chip--may not have the engineering clout he once did.

This year will tell whether he's also the tough competitor and ace salesman the chip outfit will need.

"This company is difficult to manage. It requires a CEO with a lot of energy to go up against (Intel). The CEO needs to be a dragon slayer, given the way we compete," said one source familiar with Meyer's management style. AMD declined to make Meyer or Ruiz available for an interview.

The next six months are a crucial period for AMD, Ruiz, and Meyer. Ruiz promised in December that the company will be profitable in the second half of 2008. That won't be easy. AMD lost more than $1.5 billion during the first three quarters of 2007, and analysts surveyed by Thomson One expect the company to lose 35 cents a share in the fourth quarter. At least that's headed in the right direction, compared with 2006 fourth-quarter loss of $1.05 per share.

AMD is accustomed to boom and bust cycles, and it has some work to do getting itself out of this latest mess. But choosing the right successor to Ruiz, 62, might actually be the company's most important task in 2008.

The man in waiting
Meyer, 46, has worked for AMD since 1995. He has risen steadily through the ranks of AMD's processor group, taking over the division in 2001 and becoming the de facto second in command at AMD in 2005, when the company decided to spin off its flash memory business, making the processor group its only business line. AMD formalized Meyer's status in January 2006, promoting him to president and chief operating officer and naming him to the board of directors in November 2007.

Placing Meyer on the board not only signals to customers and Wall Street that he is an anointed successor, but also changes the way he's viewed by fellow directors, said Jon Holman, who heads up executive recruiting firm The Holman Group. It's very different sitting among your fellow directors as a peer and laying out your strategy, as opposed to making the big presentation as an executive, he said.

Current and former colleagues, who did not wish to be identified, almost universally praise Meyer as a man with "integrity and honesty" who commands respect because of the accomplishments during his career. He's not prone to surrounding himself with yes-men and isn't afraid of being challenged.

But they also acknowledge that much of AMD's troubles during the past year can be placed at Meyer's feet. One source familiar with AMD's internal operations said that during the past 12 months, Meyer has taken on much more of the day-to-day management of AMD, while Ruiz has focused on key customer relationships and globe-trotting to promote AMD's interests, such as its 50x15 project to promote technology adoption in developing countries and its antitrust campaign against Intel. Unfortunately, that also means Meyer has been at the wheel during the Barcelona ordeal.

CONTINUED: Bad news from Barcelona…
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8 comments

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softer sales-and-marketing touch?
The world unfortunately revolves around sales and marketing types, they are usually promoted to the highest level of incompetence.
Posted by ColdMast (186 comments )
Reply Link Flag
Peter Principle
<a class="jive-link-external" href="http://en.wikipedia.org/wiki/The_Peter_Principle" target="_newWindow">http://en.wikipedia.org/wiki/The_Peter_Principle</a>
Posted by ColdMast (186 comments )
Link Flag
A different perspective
Well as far sales and marketing folks being CEOs I think that it's a matter of old school business. Were you have the original standard business types that have been around for hundreds to thousands of years and it's simply a case of that is how it has been. Although perhaps technology has been around with them in one form or another those folks were looked upon as skilled labor not business types. It is the second have of the twentieth century that you have that slowly begin to change.

You have an arrogance among the old school types and thus their common mis perception that soft/people skills can't be taught but hard or technical skills can and it is these soft skills that matter. Quite the reverse is typically true. You can always put the people skilled folks in positions were they matter other then CEO. However you either have an aptitude for math and other High Tech skills or you don't. Which brings to mind the story about throwing manure against the side of a barn and making it stick it's not a hard skill to learn.

The bottom line is that AMD was growing hand over fist while Intel was tripping over it's own feet from 1999 to about 2006. AMD had gained enormous market share. For what ever reason the powers that be at AMD decided to emulate Intel and sit on their hands. Technology upgrades slowed to a snails pace over the years and once Intel stopped floundering with gimmicks and bullying they got serious and reintroduced technology to their products and turned it around. AMD continued to sit on their hands until the loss of market share finally woke somebody up who took notice. Unfortunately it was one of the old school types and instead of getting off their backside and going full speed ahead with technology they simply pulled a play from the old school book and purchased ATI which began a very serious downward spiral and has nearly cast them into financial ruin.

Sales and marketing folks can certainly sell a lousy product they can even sell a nonexistent product as well. That doesn't make them good CEOs nor better suited for that position then the folks who dream up real products and the processes that are needed to make them. Perhaps it's time for the old guard to step aside and let somebody with a brain take charge for a change.
Posted by processeon (2 comments )
Reply Link Flag
Bad Strategy
Ruiz is doing a fine job as a CEO, in my opinion. It's a mistake to replace Ruiz with Meyer. Meyer used to work for Intel, so he thinks like Intel. This is the last think AMD needs, someone who can't see beyond Intel's playground. AMD needs to find a tech visionary who is willing to stop playing Intel's game and forge a new market. Now that the industry is beginning to take its first painful steps away from sequential computing toward massive parallelism, AMD has the chance of a lifetime to redefine the multicore CPU market and leave Intel holding an empty bag. AMD must re-evaluate the current state of the art in parallel computing and determine what is wrong with it. And there is a lot that is wrong with it (see link below). As soon as they can identify the real nature of the problem, they can formulate a solution that will corner the market. I'm sure Meyer is an excellent engineer but I doubt very much that he has the sort of vision that will catapult AMD into a leadership position in this cut-throat market.

The Age of Crappy Concurrency: Erlang, Tilera, AMD, IBM, Freescale, etc...
<a class="jive-link-external" href="http://rebelscience.blogspot.com/2007/09/age-of-crappy-concurrency-erlang-tilera.html" target="_newWindow">http://rebelscience.blogspot.com/2007/09/age-of-crappy-concurrency-erlang-tilera.html</a>
Posted by eightwings (32 comments )
Reply Link Flag
Hmmmmm
The problem is that they "are" playing Intel's old game of sitting on technology. Intel had a near total monopoly when it did that and it eventually lead to AMD getting with in a stones throw of being on an equal footing with Intel's share of the CPU market.

AMD "was" past tense an innovator of current technology and with the Athlon the new. They stayed the course with DDR and quickly introduced new and improved technology into their products such as ATA well before Intel and often going beyond Intel. That is what got them the to point of having Intel well with in their sights. Then along can Hector Ruiz and he introduced the old Intel sit on your hands and wait routine. Don't know much about Dirk Meyers but they definitely need someone who can both straighten out their current mess and start introducing a steady stream of new innovative technology again. More to the point with out making another acquisition nor selling FABs. Which of course the latter is the old school mentality.

The old school boys sit on a product until the market for it dies and then simply buys and sells companies, assists and stocks. They don't have the brain God gave a gnat when it comes to growing a business into an icon.
Posted by processeon (2 comments )
Link Flag
Time to buy AMD? AMD a bargain stock?
Dirk Meyer was *the man* personally responsible for the Athlon coming out and saving AMD ass in 2003. He's known to be a difficult guy to work with, but so is Steve Jobs. What I do know about him, is that he's a great engineer and surely the right person to make the AMD/ATI merger work in the *long term*. If your willing to go long, bet on Captain Dirk.

Considering that AMD is at a 5 year low, it seems that it is a good time to buy AMD. Here's a detailed analysis that I've read, by someone who has been buying AMD during this downturn.

<a class="jive-link-external" href="http://amdinvestor.com/2007/12/27/what-do-you-think-amd-is-worth-an-amd-stock-analysis/" target="_newWindow">http://amdinvestor.com/2007/12/27/what-do-you-think-amd-is-worth-an-amd-stock-analysis/</a>

Yes it's true that AMD has had a bad year, and will have another bad year to come, but for those willing to hold, it could be profitable?
Posted by hicamproject (1 comment )
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