Dell Opteron sale 'an anomaly'

Dell's placement of AMD Opteron processors for sale on its Web site has fuelled yet more rumours of a deal between the two companies, but that is all it is, say sources

Sources denied on Wednesday that Dell is about to launch an AMD-based server after several Web sites noted that the PC maker was advertising AMD Opteron processors on its site.

"That part of Dell's Web site has off and on sold AMD components over the years," said a well-placed source close to AMD. "I have no idea, but they do. It is not an indication that Dell is about to start selling AMD-based servers."

If Dell did make such a decision, it would be a major coup for AMD, which has dramatically increased its share of the x86 processor market dominated by Intel over the past decade. Many computer manufacturers now use AMD as well as Intel processors, and AMD's launch last year of its 64-bit processors, which consume and dissipate less power than Intel's 64-bit Itanium family of processors, and which have the added advantage of better backward compatibility with 32-bit processors, have won the company a host of new accounts.

The advert on Dell's Web site, for a $869.47 Opteron 148 processor running at 2.2GHz, is little more than an anomaly, according to the source.

AMD, which has offices in Austin, Texas, is a regular caller at Dell's headquarters, situated in the same city, but to date the computer maker has used AMD for little more than a bargaining chip against Intel, its main supplier.

The AMD denial came only weeks after Dell chief operating officer Kevin Rollins, who has since taken on the role of chief executive, took another chance to dismiss the chip company as he spoke to students at the University of Chicago's Graduate School of Business.

"If you look at the corporate market, which is where 85 percent of our business is today, the corporate user has not yet found confidence in AMD and so most of the corporations use Intel," said Rollins at the time. "Where AMD has gained a good foothold is in the consumer space. That has not been the primary focus of Dell strategically."

He added, however, that Dell tests every AMD chip, including its new 64-bit Opteron processor, in its labs.

"The most recent run of both Athlon and Opteron chips have been better than anything we've seen them do before so we would never say never," Rollins said of AMD. IBM and Sun Microsystems already sell servers using AMD's Opteron chip. Hewlett-Packard will begin using the chips in server computers, Reuters reported in January, citing sources familiar with the matter. Analysts have waited to see if Dell would follow suit.

Opteron, which launched in April 2003, has been adopted not only by major vendors such as IBM, but also by a wide range of second-tier, or "white box" server makers.

Dell did not immediately respond to requests for comment.