Dell: We're selling AMD because customers demand it

[mpjesse]

DALLAS - The world's largest PC maker says it was merely bowing to customer demand when it decided to start offering microprocessors from Advanced Micro Devices Inc. in some of its high-end servers...

"We're going to bring the best technology to the market," Dell founder Michael Dell said of his company's decision. "If you look at the history of our company, we have for the majority of the last 22 years asserted a position of delivering great value and great service to our customers."

Read On...

I realize this isn't "news", but it's interesting that Dell acknowledges Opteron's superiority and that there IS a demand for Opteron based Dell servers.

 

[Caboose-1]

DALLAS - The world's largest PC maker says it was merely bowing to customer demand when it decided to start offering microprocessors from Advanced Micro Devices Inc. in some of its high-end servers...

"We're going to bring the best technology to the market," Dell founder Michael Dell said of his company's decision. "If you look at the history of our company, we have for the majority of the last 22 years asserted a position of delivering great value and great service to our customers."

Read On...

I realize this isn't "news", but it's interesting that Dell acknowledges Opteron's superiority and that there IS a demand for Opteron based Dell servers. Really? How bout' this: I demand you have a choice of AMD's in ALL of your products.

 

[k2000k]

It is interesting, and makes business sense. Dell's margins are rather slim and adding AMD could possibly cause a spike in their sales, whether or not that will translate in better revenue and profit will be determined by the pricing.

 

[K8MAN]

Dell just got out of the red for DOC which launched 1.5 years ago as well which will become a major source of income as it grows.

 

[Ycon]

I dont think Dell did it because customers wanted it (not directly).
I think AMD offered a deal that good that Dell cant lose any money by using AMD.

 

[GherkinPekul]

To be competitive, they should take a page from newly aquired Alienware- offer both. That negates fanboy partisanship. It's all money after that.

 

[hacky_maximus]

and, as an AMD fan, I salute Dell's decision !
it's all about marketing, about bets deal, about millions of $...

 

[spud]

DALLAS - The world's largest PC maker says it was merely bowing to customer demand when it decided to start offering microprocessors from Advanced Micro Devices Inc. in some of its high-end servers...

"We're going to bring the best technology to the market," Dell founder Michael Dell said of his company's decision. "If you look at the history of our company, we have for the majority of the last 22 years asserted a position of delivering great value and great service to our customers."

Read On...

I realize this isn't "news", but it's interesting that Dell acknowledges Opteron's superiority and that there IS a demand for Opteron based Dell servers. Really? How bout' this: I demand you have a choice of AMD's in ALL of your products.

If they did you could only have wet dreams about buying a Athlon 64.

 

[Caboose-1]

DALLAS - The world's largest PC maker says it was merely bowing to customer demand when it decided to start offering microprocessors from Advanced Micro Devices Inc. in some of its high-end servers...

"We're going to bring the best technology to the market," Dell founder Michael Dell said of his company's decision. "If you look at the history of our company, we have for the majority of the last 22 years asserted a position of delivering great value and great service to our customers."

Read On...

I realize this isn't "news", but it's interesting that Dell acknowledges Opteron's superiority and that there IS a demand for Opteron based Dell servers. Really? How bout' this: I demand you have a choice of AMD's in ALL of your products.

If they did you could only have wet dreams about buying a Athlon 64. Huh? That is not what I meant, sorry I should have been clearer. I meant that Dell should have a choice of AMD's and Intel's in all of there products, not that i would buy one anyway.

 

[spud]

DALLAS - The world's largest PC maker says it was merely bowing to customer demand when it decided to start offering microprocessors from Advanced Micro Devices Inc. in some of its high-end servers...

"We're going to bring the best technology to the market," Dell founder Michael Dell said of his company's decision. "If you look at the history of our company, we have for the majority of the last 22 years asserted a position of delivering great value and great service to our customers."

Read On...

I realize this isn't "news", but it's interesting that Dell acknowledges Opteron's superiority and that there IS a demand for Opteron based Dell servers. Really? How bout' this: I demand you have a choice of AMD's in ALL of your products.

If they did you could only have wet dreams about buying a Athlon 64. Huh? That is not what I meant, sorry I should have been clearer. I meant that Dell should have a choice of AMD's and Intel's in all of there products, not that i would buy one anyway.

It's ok I worded that pretty agressive I apologize.

 

[Caboose-1]

It's ok I worded that pretty agressive I apologize.

Its alright.

 

[hergieburbur]

...

You know what's funny, about 7 or 8 years ago, Intel was not in servers but they made a move to "Challenge Sun" as I recall the headlines. They essentially created the x86 server space (please correct me if I am wrong, this is how I recall it playing out). AMD stepped in with their better architecture and really made a go of it, obviously.

Jack

Do you mean Xeon or Itanium? Pentium Pros were in Servers long before that, but they weren't really targeted to the Server space.

 

[mpjesse]

It is interesting, and makes business sense. Dell's margins are rather slim and adding AMD could possibly cause a spike in their sales, whether or not that will translate in better revenue and profit will be determined by the pricing.

Yeah, when you add up what is important to servers -- crunching performance and power, AMD has the lead over Neburst. Dell is just making a good business decision based on their customer feedback. If Dell (or any other server vendor) could deliver an Intel system that exceeds, then the story would likely be different. This is where Intel has it's work cut out for them.... they need to really innovate on the server side.

You know what's funny, about 7 or 8 years ago, Intel was not in servers but they made a move to "Challenge Sun" as I recall the headlines. They essentially created the x86 server space (please correct me if I am wrong, this is how I recall it playing out). AMD stepped in with their better architecture and really made a go of it, obviously.

Jack

What really put Intel into the enterprise server market was Xeon. At the time they were cheap, powerful, and x86. The ironic part is that Itanium was supposed to put Intel "on the map."

In the end customers wanted (and still do) flexibility. We all know how poorly Itanium did when emulating in x86 mode.

And that's where AMD came in. They made a cheap, powerful chip that performed equally in 32 bit mode as it did 64 bit mode. I remember Intel initially downplaying that capability saying "customers want 64 bit... and they want it to be IA-64." I think they thought HP was the only customer in the world.

LOL

 

[dvdpiddy]

Why did itanium suck so bad anyway?

 

[Caboose-1]

Why did itanium suck so bad anyway?

It wasn't so much Itanium (don't get me wrong, it did suck), as it was support for it. No one supported it.

 

[dvdpiddy]

Why did'nt they support it?

 

[mpjesse]

IMO it was a combination of both. (No support and poor x86 performance). But if you read on, you'll learn how poor x86 performance led to no support.

Probably the single most important thing when making a instruction/extension transition is performance in compatibility mode. For example, the 386 was the first 32-bit (Intel) CPU. It outperformed the 286 in 16-bit performance. Thus, it was a no-brainer and transitioned very easily. Everything that could run on a 286 ran just fine (or better) on a 386.

A "transition" processor if you will, absolutely has to be able to do both new technologies well. Developers can't just change the way they write code overnight... it takes time. (Later, this would be the primary reason for Opteron's enormous success.)

What basically went wrong with Itanium was it's emulation. Itanium emulated 32-bit (x86) mode and had absolutely horrid performance when running applications in 32-bit mode. At the time of Itanium's launch, 99% of programs didn't support IA-64. Developers saw the embarrassing Itanium performance benchmarks in x86 and said "no frikin way." Additionally, Xeon had just come out and it outperformed Itanium in x86 by 5 fold! With Xeon's cost roughly 1/3 of an Itanium, it was a "no-brainer" for everyone.

And that's the story (in a nut shell) of why Itanium sucked. There are of course other contributing factors, but they're somewhat mitigated when compared to the 2 major problems I listed above.

 

[endyen]

I still see it as a token move, undertaken to relieve the pressure of a very poor quarterly report. I doubt the numbers will ever be there, to make a difference.

 

[hergieburbur]

I still see it as a token move, undertaken to relieve the pressure of a very poor quarterly report. I doubt the numbers will ever be there, to make a difference.

For Dell or AMD? I could care less if it helps Dells bottom line by much, but if it helps AMD by providing much needed R & D money and helping them stay competitive, then in the long run that will "trickle down" (HA HA! Reagonomics :lol: ) to the desktop and mobile markets, where improved competition directly benefits us as cosumers.

 

[endyen]

I doubt that Dell will buy many 4 way opterons. Not much money for AMD from that corner. Dell just doesn't sell them in volumn.
Dell was just looking for a way to show they were changing and adapting, because thier numbers were bad.
If they were really serious about responding to demand, they would at least have included the single and dual socket opterons. I'm sure they have seen a lot more requests for those, than they care to admit. Realisticly, if it was customer preassure, they would have made the switch 6 months ago.

 

[BaronMatrix]

I doubt that Dell will buy many 4 way opterons. Not much money for AMD from that corner. Dell just doesn't sell them in volumn.
Dell was just looking for a way to show they were changing and adapting, because thier numbers were bad.
If they were really serious about responding to demand, they would at least have included the single and dual socket opterons. I'm sure they have seen a lot more requests for those, than they care to admit. Realisticly, if it was customer preassure, they would have made the switch 6 months ago.

Do you realize that an 875 Opteron system (4proc) is worth 10-20,000 dollars. If AMD hands a lot of desktop to Chartered and uses more of Fab36 for 8xx, Dell can sell 10s of 1000s maybe 100s of 1000s in a year EASY. That's a REAL revenue stream. ($1.5B)

I knew Episode III would get AMD more customers. (sorry for the sidebar)

 

[endyen]

A couple of things. First off, Dell has not sold 100s of 1000s of 4 chip systems since day one. Second, AMD's cut is only the chip price. It will probably work out to about $1200 each. AMD will probably not even get $1million from Dell.

 

[aceprowler]

Pentium is overpriced.

AMD would be the better buy for ANY company.

I am an AMD fan only because of price. If Intel sold lower priced processors, then I would be an Pentium fan.

Really, all the home build computers I sell. It always comes down to price. As well as the work I do on customers computers. The question I ask "why did you buy this computer"? PRICE!! No If's and's or BUT's!!

So this is a very smart move for Dell.

I benchmarked an Opteron 144 1.8mhz vs 3100 1.8mhz Sempron. Benchmarks where almost Identical. If your not an O/C'r Sempron would be a very smart buy.

Intel Pentium4 3.2mhz vs Celeron 3.2 mhz wouldn't even bench close to each other. Dell sells mostly Celeron to keep the PRICES down! Customers think they are getting a fast computer Pentium4, and they are NOT! It's an Celeron !!

They start to sell Sempron's, Intel will be far behind in the Processor Sales margins!

Personally, I think Dell and several other companies are the only thing keeping the Intel a float! Intel needs to start getting rid of To High of Paid C.E.O's!!

 

[hergieburbur]

A couple of things. First off, Dell has not sold 100s of 1000s of 4 chip systems since day one. Second, AMD's cut is only the chip price. It will probably work out to about $1200 each. AMD will probably not even get $1million from Dell.

I have to respectfully disagree. The main article on THG's homepage mentions how ILM/Lucasarts standaredized on over 1000 such systems in their datacenters from HP. Using your margins (which I think are a bit on the low side), one company that size is enough to put them over $1 million. We are talking about a company that does around $50Billion in sales annually, and you don't beleive this will benefit AMD in any way?

I remember saying that HP selling AMD servers wasn't that big of a deal either, and they have been hurting Dell in the server market now because Opteron servers are so much more cost effective than Xeons.