Advanced Micro Devices (AMD) may have scored a coup when Dell Computer finally decided to join the ranks of server makers which have adopted its processor. But the chipmaker still has some way to go before it can win over more conservative businesses in the Asia-Pacific region and rattle Intel's dominance, says IDC.
Dell last week ended a long-standing exclusive relationship with Intel, and inked a deal with AMD to use Opteron chips in its four-way servers.
This is the latest icing on AMD's cake as it has increasingly made gains against the market incumbent, whilst fighting an antitrust lawsuit it filed against Intel last year.
When contacted, Tan See Ghee, AMD South Asia's microprocessor solutions sector technology manager, said: "The benefits are clear, with the addition of Dell, we offer customers more choices to consider when they buy server hardware."
Dell representatives in Singapore declined to comment for this story.
According to Mercury Research, Opteron accounted for 22.1 percent of all x86 server processors shipped during the first quarter this year. This represents a 26 percent growth compared with AMD's fourth-quarter results, and more than 250 percent growth over its numbers in the first quarter of 2005.
AMD sees some success in PCs
AMD's server market share is currently under 5 percent, but the chipmaker is establishing better results in the PC market.
According to Bryan Ma, IDC's Asia-Pacific associate director of personal systems research, AMD's share of the PC chip market last year was 14 percent, compared to Intel's 85 percent.
Most of the adoption is happening in China, where AMD has 18 percent share of the market, said Ma.
Not quite there yet
But AMD's stellar performance has yet to be replicated the same way in this part of the world. The chipmaker's share of the x86 processor market in the Asia-Pacific region, outside of Japan, was only 4.3 percent last year, compared to Intel's 95.7 percent, according to figures from research company IDC.
Rajnish Arora, associate director at IDC Asia-Pacific, noted that although there has been an "increasing trend" in terms of Opteron's market share in the past four quarters, "it has not gone to the point of dislodging Intel" from the No.1 spot.
In the first quarter of 2005, Opteron's share of the x86 processor market was 3 percent. By the fourth quarter, this increased to 5.1 percent. Arora attributed the upward trend to a wider market acceptance of Opteron chips as vendors such as Hewlett-Packard (HP), IBM and Sun Microsystems, offer their endorsement of the chip.
"These guys (AMD) are on a roll, they're getting traction on the market," he said. "But they're in no way displacing Intel from its dominant position."
The Asia-Pacific region has a preference for two-way rack-optimized servers, a segment that makes up about 65 to 70 percent of the server market, Arora said.
This factor would prevent AMD from gaining more share in the market, he explained, especially since four-way servers--where Dell will incorporate Opteron chips--make up only 4 to 5 percent of the overall server market in the region.
Many large enterprises and most governments are still standardized on the Intel Xeon platform, he pointed out. "Where Opteron has had success is in the high performance computing area," he said. "The two-way mainstream market is the sweet spot that AMD will need to crack before they can get the volume."
"Are organizations asking to replace several hundreds of Intel Xeon servers with AMD servers? That sort of situation hasn't come yet," he noted,
Still, there are signs that the best has yet to come for AMD.
Earlier this month, IBM's senior vice president of systems and technology group, Bill Zeitler, indicated that a move to offer mainstream Opteron chips would make sense, noting that HP and Sun have benefited by offering a broader portfolio of the AMD chip.
IBM initially only had models that were geared for the technical-computing niche. Later, it added blade servers that are better-suited to mainstream business computing.
According to Zeitler, IBM has had "very robust sales" of the blades in the first quarter of 2006.