Despite big wins, AMD still not getting much respect on corporate desktops

Despite big wins, AMD still not getting much respect on corporate desktops

Summary: By all accounts, AMD has done everything right against a seemingly insurmountable competitor.  It's a true David and Goliath story of how the little processor company that could (little, relatively speaking) is taming a lethal and giant predator.

TOPICS: Hardware

By all accounts, AMD has done everything right against a seemingly insurmountable competitor.  It's a true David and Goliath story of how the little processor company that could (little, relatively speaking) is taming a lethal and giant predator.  Starting with the introduction of its hybrid 32/64 bit AMD64 architecture -- a technology that I wrongly predicted would lose in the market to Intel's pure 64-bit Itanium  --  AMD has been on a roll.  

In addition to making the big bet on AMD64, the company's early bet on its HyperTransport memory technology appears to have been a good wager as well.  Now called Direct Connect, AMD's approach to memory is to build the controller that gives its CPUs access to memory right into the CPU.  This differs from Intel's approach, which has been to separate the two.  AMD's design choice is at least partially responsible for the way AMD's new dual core processors are kicking butt [another part of AMD's roll] against those of Intel, even with slower performing memory.  Intel is on record with ZDNet as saying that AMD's memory design choice will run out of gas at some point. 

But, in Dan Farber's interview of AMD's Fred Weber, the chip company's CTO spins the rumor mill saying that Intel will have a Direct Connect-like technology in its chips by either 2006 or 2007.  If that's the case, then it will be yet another Goliath-taming tip of the hat to AMD by its arch nemesis.  In an attempt to confirm or deny the rumor, I checked with Intel spokesperson Bill Kircos, who did neither when he said "I'm not saying Intel will or won't go this route someday. History shows we've gone both ways.  We integrated the memory controller in our CPUs as far back as 1990 (i386SL w/ Page Mode DRAM + SRAM + FLASH MC) and 1992 (i486SL w/ Fast Page mode 3.3v DRAM, x4, x8, x16).  We do it now with our X-scale based products.  And, we had it as part of a desktop PC chip project called Timna that we cancelled in the late 90s." In his e-mail response that, in the name of media transparency, can be found here, Kircos also reiterated some of the points he made to me in a previous correspondence about the risks of integrating memory controllers.  Those points were incorporated into one of my previous blog posts entitled Intel on AMD's early dual core wins: Not so fast.

Argue as it did (that hybrids were a bad idea) and as it may (that integrating chips with memory controllers is a dead end), Intel may have a tough time arguing with the resulting market share numbers.  From AMD's public relations counsel came this barometer of the headway the company is making:

For Q1 2005, Gartner shows AMD continuing to make strong market share gains in several key categories, including:
  • AMD's share of the U.S. x86 4-way server market grew to 22.5%, a 35% increase quarter over quarter, and an impressive 325% increase year over year.
  • AMD's share of the U.S. x86 market grew to 9.0%, a 17% q-o-q and 34% y-o-y gain
  • AMD's share of the worldwide x86 market grew to 5.7%, an increase of 18%
  • q-o-1 and 50% y-o-y
  • AMD's share of the worldwide total of servers shipped grew to 5.2%, a 6% q-o-q gain, and an impressive 49% y-o-y gain.
For Q1 2005, IDC also showed similar strong progress across all key categories, including:
  • AMD's share of the 4-way server market grew to 18.5%,  up 35% q-o-q and a staggering 1441% y-o-y
  • AMD's share of the 2-way server market grew to 6% , up 18% q-o-q and 76% y-o-y
  • AMD's share of the overall server market grew to 5.5%, which represents a 12% q-o-q, and a 72% leap y-o-y
But, while the numbers certainly vindicate AMD's long-held convictions, they still reflect one of AMD's trouble spots: corporate desktops and notebooks.  Lenovo, which has taken over IBM's PC business, has announced that its next round of ThinkCentres will be based on Intel's dual core Pentium D chip.  But in China, the company has announced that its dual core offerings will be based on AMD's dual-core Athlon 64 chips (the desktop chip) rather than the Pentium Ds it is using domestically in the U.S.   I pinged Lenovo for some details on the rationale behind these decisions, but the company so far hasn't gotten back to me. 

HP has slightly upped its commitment to AMD over the last year.  This was brought to my attention by AMD when the company's director of worldwide enterprise and commercial marketing Bruce Shaw responded to my inquiry regarding AMD's lack of traction on the desktop front.  Said Shaw:

We expect our success on the server front --more than 50 percent of the Global 100 --will enable us to make inroads into the client side. It's also important to note that we have already had success with the Fortune 500 from a desktop perspective through our partnership with HP. Customers such as H&R Block and Northeast Utilities have standardized on an AMD platform because it offered them the things they demanded in addition to performance -- lower TCO and image stability.

Although the company wasn't able to get back to me in time with the specifics on which machines were in use by the two companies cited by Shaw, a brief perusal of its Web site shows the Athlon 64 turning up in two (5000 series systems) of the company's 15 total business desktop offerings.  Two of HP's lowest-end business systems also have 32-bit (non-AMD64) Athlons in them, while none of HP's higher-end more corporately focused and manageable 7000 series systems use the AMD technology.  Then there's Dell, which has no AMD offerings.  Also, one note. Intel has obviously recognized image stability as an issue because it has an entire program dedicated to it called the Intel Stable Image Platform Program.  I discovered it while searching Gateway's site for AMD-based systems and I noticed that at least two of that company's business desktop offerings were  a part of the program.

AMD is obviously aware of the challenges it faces. Based on how it has done on the server side (against many odds), you simply can't count the company out.   Though completely coincidental, Shaw's 50 percent number also jives with another of AMD's 50 percent citations.  Recently, the company launched a newsletter called 50x15 Connections to go with the company's 50x15 program.  The program, according to the inaugural issue, is about AMD's effort to provide "50 percent of the world with affordable computing capability and Internet access by the year 2015."  Though the program's goal characterizes its target as a person that might not otherwise be able to afford a computer or Internet access (in other words, not really a business), we can assume that if the company is at all successful in attaining 50x15, that that there will be at least some drag effect that results in better business penetration.  

All this said, the numbers still speak for themselves.  There are few offerings and even fewer businesses demanding AMD64 on the desktop.  Perhaps, as Shaw implies, once those companies are more exposed to AMD64 on the server-side, they'll be able to specify AMD64-based desktops with more confidence.  We'll see.

Topic: Hardware

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  • We started buying AMD desktops three years ago

    I would say a good 70% of our desktops are AMD based now. In one more year it should be 90% as more and more old PII and PIII boxes are finally replaced. We have no complaints.
  • AMD marketshare quotas exceeded

    It's hard to sell AMD desktops into businesses when before you know it, Intel-mandated selling quotas are exceeded. As your own stories in Cnet/Zdnet have shown, Intel has been convicted of using illegal market-limiting trade practices in Japan:

    An analysis of the original report showed that Intel gave out discounts to manufacturers not based on volume, but on marketshare percentage! If you think this practice was just a fluke that happened only in Japan, then you live a wonderfully sheltered life. Most of the Japanese manufacturers also export to America and Europe, so Intel even gave them instructions about what percentage of non-Intel products were allowed to be exported based on region (e.g. maintain 90% Intel in Japan, 80% in America, 70% in Europe for your discounts).

    Intel maintains the tightest control over the American market, because it's its hometurf. Lenovo is afraid to introduce AMD-based machines in America, but it leads with AMD-based machines in its own hometurf of China? Now are we talking about corporations or the mafia here?
  • Intel denies rumours about CSI bus?

    [quote]In an attempt to confirm or deny the rumor, I checked with Intel spokesperson Bill Kircos who did neither when he said "I?m not saying Intel will or won?t go this route someday.[/quote]

    Why is Bill Kircos being so shy about talking about this? Intel themselves have talked about introducing the CSI interconnect (nothing to do with Crime Scene Investigation, though that might be appropriate), during the last Intel Developer's forum.
  • Lap Tops should be replaced by mobile handsets

    It shounds outrageous to make a statement like this. But technology can be developed to change the client server roles so that the clients would no longer be required to process any instructions and servers would no longer be required to send any documents to the clients. This would allow the mobile handsets to surf the Internet.
    • screen not large enough on hand held machines

      Ever write any PDA applications? Not having a keyboard or screen that is large enough makes using a PDA instead of a laptop a problem.

      Tablet PC's would work, PDA's not.
  • Many of us have AMD battle scars

    Not strictly AMD's fault, but many currently in decision-making positions cut their teeth deploying PCs from the mid-90s on. Those of us unfortunate to deal with cheap AMD-based white boxes have plenty of horror stories vis-a-vis cheap(er) no-name components, inexplicable (and uncorrectable) problems with motherboards, BIOS, etc.

    Like boring AT&T office PBX systems, the Intel stuff just works. Corporate budgets are not that tight and Intel has been the more stable half of the Wintel platform for years.

    AMD may have some great products, but their method of entry into the marketplace has attached a stigma that will be hard to shake.
    • AMD headaches

      I've tried most versions of the AMD chips over the year. Everytime, I've gotten bitten by some form of incompatibility. In the Kx series, it was mainly with the video card. With the Duron it was software.

      A customer of mine purchased 4 AMD-based machines couple months ago. I was in their office yesterday, and one of their support person was trying (without much luck) to get them working.

      As relictele basically stated, Intel machines tend to just work and I don't need the complication and headache of trying to get an AMD box to work properly.

      Futhermore, most benchmarks shows that the Intel chips do better than AMD chips in business-oriented benchmarks. I'm not buying computers so employees can play games -- I'm buying them for business applications.
    • Take an aspirin..............

      Blaming the decision to buy boxes built with sub-standard, cheapo components as a reason to not look at future purchases of AMD-based systems is really nonsensical. We've used predominantly AMD-based systems in our shop for more than 8 years, now, and haven't had any "problems" that others allude to.

      We've found that the system builders using Intel usually do a really good job of mucking things up before we can. We build all of our AMD-based systems in house, and choose the other components based on price AND performance.

      Long after we've donated the commercially built boxes (Compaq/HP/Dell, etc.) to the local community center, our AMD home-made boxes continue to crank along.

      To date us a bit, we can remember the days when all the "manufacturers" used such customized components, and had their machines so dialed into these components, that you'd have to know an engineer at Compaq to find out which aftermarket NIC cards would work.

      We don't see it much different today. Systems built from readily available components may require a bit more effort upfront, but we've seen enormous reliability gains. We still have Win98SE boxes that don't get rebooted for months on end.

      For us it's economics. $80.00's less for a processor lets us build more boxes, more often.

      And stigma? Know how many "junk" boxes have been built with low-end Intel stuff? Look in this Sunday's paper for the current "pinto-of- processors" offerings.
      • Nonsensical perhaps - but Intel gets our $

        Please note that I purposefully did not draw a direct correlation between cheap white boxes with components that AMD had no part in. Still, the brand image is hard to shake for many.

        It certainly doesn't help that AMD boosters often want to launch into Windows/Linux, Chevy/Mopar, Fender/Gibson style flame wars. If AMD works for you, so be it.

        We are sticking with Intel.
        • OK - take your ball and go home.

          Narrow views are what fan flame wars. Narrow mindedness is wny Intel gets your $$ and nobody gets raises.

          They were spent on the hardware.

          • Raise?

            I'm self-employed, mate. I get a raise any bloody time I want it. If there's enough money.
          • <<chuckle>>

            'nuff said. I'd put the spare $80.00 in my pocket or use it towards more memory.

            You give yours to Intel. I'm sure they appreciate it .

      • I agree

        I?ve been an IT manager for years, building and maintaining computers for the business I work for. I make sure the equipment I use is reliable and I don?t have any problems with the systems, regardless of the processor. Most of the people I talk to that have problems with AMD bought or built a very cheap computer with bad components and eventually bought or built a new system, spending more, but getting better components and an Intel processor. It?s always assumed the processor is at fault and not the cheap components.
    • RE: Many of us have AMD battle scars

      These problems you speak of have nothing to do with AMD. These were problems with the components that were of substandard quality, or so new that compatibility problems were rampant.

      I had 2 PCs in the 90s and one was an AMD and one was an INTEL, both were built from quality components and outperformed and outlasted most other systems of that time. The first was a AMD 386DX40, which left all other 386s in the dust and put all early 486s to shame. Not just in gaming, but other apps such as windows (3.11, office, lotus, etc) and serious apps like AutoCAD. The second was a Intel 486DX50 (Not a DX2), which left all other 486s fair behind it and had me asking what was so grand about the Pentium systems until they got to about 133mhz. both of these systems were sold when I replaced them and continued to operate until they were eventually too antiquated to be of any use. BTW I never had any problems running any software designed for the other brand of chip, proper engineering is the key to any PC when it comes to preformance and durability.

      There is no situation that I can come up with that a AMD system would be less efficient at that it would require an Intel system to be done properly and efficiently, and I can say the same thing about Intel. AMD has always engineered their systems to do more with less and for this reason I have to wave their flag.

      Today it comes down to a couple of things price/preformance, and maintenance costs. All considerations of a system falls in to one of these categories and if you quantify things this way I believe that AMD comes out on top, especially when you look at their lower power consumption. The reason AMD his not been widely accepted in the business marked is FEAR. Our past experiences messing with the new and unknown has proven to us that more often than not it is painful. Intel has used this fear with the manufactures as well as the user base to try and prevent AMD from taking more market share. This tactic has slowed them down, but AMD has not stopped. as AMD gains more market share more people will start looking for AMD powered products for the same reason I do (better products through more focused engineering able to do more with less).
    • It's simply a matter of sticking with standards

      None of what you described about AMD systems doesn't also happen on Intel systems. The main advantage of buying from a brandname PC manufacturer is that they offer all of their software preinstalled. That is also doable with AMD systems of they were offered by more brandnames. If you buy cheap whiteboxes, it doesn't matter if it was Intel or AMD inside, you're your own tester. Some whitebox makers are almost as thorough at testing as brandnames, if not more so, but of course you pay for that extra service.
    • Still Stuck Huh?

      I've always gone with a winner. PC over ApPlE AMD over INtEl. People get stuck in a rut and are afraid to venture into the real world. I am running a 2 gig AMD Athlon and I sit beside a person running a 3.4 gig INteL in our workplace. He's always screaming at his machine to "Come on Come on" and I am all done. The proof is in the puddin they say somewhere. I like that David and Golith comparasion. The big Guys always wonder what happen when there sales fall. It is very simple, Windows and INteL charge to much money for there products. It is really that simple. They wonder what went wrong I know WinDows does. Simple, to much for your product and it isn't that good.
  • AMD - we have no problems with them

    Our agency uses AMD processors, and we have had no problem ever with them. All software installation works seamlessly.

    With AMD's HyperTransport and their rollout of AMD64, there's no reason for us to even consider Intel.

    Torrey Lauer
    Modern Travel Services
    modern travel DOT net

    Rainbow Sky Travel
    rainbow sky travel DOT com
  • All 32 bit x68 processors are now obsolete..

    Anybody who is now purchasing anything less than 64 bit processors on the desktop or even notebooks is guilty of the IT equivalent of malpractice. When the first 32 bit processors were introduced in the 1980's there were still people purchasing 16 bit systems that soon became next to useless wasting time and money,,,,, the dopes Intel being caught with their pants down having no equivalent product not withstanding; history will repeat the lessons of throwing corporate money away over a mere ?label?. We have used AMD since the old 386 days and have never had a processor glitch or problem of any kind.
    (Still peed over Intel predatory marketing practices of selling purposely crippled cpu's like the SX, cpu's with math flaws, and cpu's with embedded serial numbers!)
  • AMD

    HP has slightly upped its commitment to AMD over the last year. This was brought to my attention by AMD when the company's director of worldwide enterprise and commercial marketing Bruce Shaw responded to my inquiry regarding AMD's lack of traction on the desktop front.

  • Don't speak too soon...

    Our Fortune 500 corporation is moving to 'AMD Inside'.

    We resisted the move to the Pentium 4 as long as we possibly could. We were not impressed with the Intel architectural strategy of higher clock speeds yet less work per clock. It seems that direction is finally catching up with Intel.

    We have been a Dell shop for a number of years, but quality and reliability issues have forced us to re-examine the market. The AMD offerings from HP are ready for the corporate market. The HP dx5150 is providing us with a lot of bang for a lot fewer bucks. We should save over $750K per year just in acquisition costs. Add in the reduced power consumption and heat output, and it's another bonus. Better integrated graphics than the new i945 based systems...a bonus. Add in the future proofing of having full 64-bit systems and not just memory get the idea.

    AMD has historically outperformed Intel on Office related benchmarks. Now we finally get to put that advantage to work for us.

    I'm also eagerly awaiting the arrival of the Turion based notebooks.
    Uber Dweeb