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AMD/iBuyPower Respond To Puget Column

By - Source: Tom's Hardware US | B 50 comments

In response to a guest column by Puget System's president, Jon Bach, AMD and iBuyPower called to discuss the green team's efforts to court channel resellers.

A couple of months back, Jon Bach, president of Puget Systems, penned a column for the site, weighing in on the EU's ruling against Intel. He went on to explain how Intel's legitimate rebate programs work, and why the processor vendor accounted for more than 90% of his CPU sales in 2008.

Understandably, AMD took issue with the claim that its own channel programs weren't as easily accessible to system builders, that its processors were more difficult for VARs to ship, and that the company's chips weren't as commonly-requested as Intel's. Shortly thereafter, I got on the phone with AMD's John Honning, senior manager of North American channel marketing at AMD, and Darren Su, vice president of iBuyPower, to discuss the other side of the story.

If you'd like to read Jon's original column, you can find that right here.

Darren: iBuyPower is both an AMD and Intel partner. Under Intel, we're Premier Members. Under AMD, we’re been Premier Partners since 2002. Both vendors are great, each with their own advantages and disadvantages.

Chris: The story we're discussing sprung from the EU ruling against Intel, and Jon addressed a few challenges that AMD faces currently.

Darren: Yes, let me address those. He said that customers are not asking for AMD, AMD isn’t getting itself in front of system builders, and AMD systems are harder to ship and support. So, I’m not a technical person—I’m more of a marketing person. So, I’ll give you my marketing perspective working with both companies.

The advantage AMD has the consistency and creativity of its marketing program. For the past seven or eight years, we’ve participated in the Intel Inside program. Based on sales, they put a percentage into a bucket for marketing co-op and we're supposed to be able to claim those funds. But we joke that it’s very difficult to actually claim them because Intel always finds a way to deny those claims. This doesn’t happen with AMD, though. We’re here to promote product—we shouldn’t be punished for it. That was my number one concern.

Number two is, finally last year Intel stepped up and said “thanks guys for the support.” So in addition to Intel Inside, there is now a BDF program--business development funds, which are only accessible to a few customers and designed to push higher-end configurations. Now, we have 40% year to year growth, but this year there is a recession, so they say “now we’re taking that back.” At the same time, we never hear “we’re cutting your funds” from AMD. That’s the consistency I mentioned.

John: The one issue we saw with the Puget column was—just like Intel has exclusive customers, and we do too—you’re going to see a one-sided argument that we don’t do enough with them. They might not be a large reseller and thus don’t fall into the categories like Darren mentioned for the business development funds.

Darren: What I disagree with the most on this article is that they claim themselves to be high-end gaming integrators (Ed.: to be specific, Jon said "As a boutique outfit that focuses primarily on high-performance, highly reliable computers..." in his column) but are only familiar with AMD as far back as K6 (Ed.: check out the original column, linked above for the context here). Since the introduction of the first Athlon, AMD changed the landscape of gaming. Without Athlon, there would be no gaming PCs, period. Just think about the Athlon 64 FX.

Yes, the original Phenom had a bad name and was less successful. But K6 being the latest product demanded from AMD? Athlon woke up a giant at Intel—even Paul Otellini admitted at the Intel ISS conference that Intel was behind. Without AMD, I wouldn’t be where I am today. It’s true that Intel has the technology lead with Core i7. I understand that. But to say the past 10 years of AMD’s support is not there, I totally disagree with. You can quote me today saying the Athlon changed the entire landscape of gaming.

And to say that AMD systems are hard to ship? We use many different heavy heatsinks and we don’t have issues.

We’re at 38% (AMD) versus 62% (Intel) market share right now—those are my numbers.

John: You know as well as I do, Chris, that this is a relationship business. The better relationships you have the more business you’re going to do. With regard to getting more creative, I appreciate Darren saying we’re more flexible, and I really think we’re easier to do business with because the market is so dynamic and we’re always looking at new ways to attack it. We’re creating resource centers for the partners so they can see the whole story.

At the very highest-end, the folks in blue have a performance advantage, but from a price/performance level, we beat them across the board. The greatest value we have been able to bring to the table is the platform story. We have the CPUs like they do, the chipsets like they do, but we also have graphics. Having the entire platform like that with the huge milestones—the 700-series chipsets, the 4000-series graphics, and Phenom II—I think you’re seeing a huge momentum shift our way.

I would love to reach out to Jon over at Puget systems, because if we’re not touching him and there’s an opportunity there, we should definitely be talking.

Chris: Now, John, you know my background and you know I’ve done a lot of channel coverage. I’m familiar with what each vendor offers in the way of programs and incentives, and so where Jon’s story resonated with me was that I communicate with Intel regarding their different programs from the server to the desktop to the mobile side—this information is all even available through Google—programs designed to help the channel compete against tier-ones. When I try to do the same with AMD, I’m not able to come up with anything. So, if there are resources out there simply not being advocated in a way that builders know are available—I think that’s the message you’d want to get across. If they exist, how do builders get access to it?

John: Right, that sounds like a good challenge on our part. Because we do have a number of programs, the same as the other guys. Maybe we don’t publicize it because they’re not offered across the board—usually at the higher-end of our goal level. But I’d be curious to see what Intel has for the really small guys, too. We have around 10,000 to 14,000 of those guys right now, who we mainly send education and information to at our own entry-level program. Our market builder portal is available to any reseller out there, with all of those resources.

So there you have it. If you're a system builder (and by system builder I mean a for-profit individual or organization that'd qualify for one of these reseller programs, rather than an enthusiast who builds his own machines when it comes time to upgrade), I again welcome you to share your experiences and opinions. Remember, this all started with the EU's judgment against Intel, on which Jon Bach of Puget Systems wrote about for Tom's Hardware.

And indeed, even domestically, AMD has subpoenaed information about corporate-approved pricing, market development funds, funds for joint marketing, and business development funds, so each company's use of such reseller incentives is most definitely in play here. What're your thoughts?

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Top Comments
  • 23 Hide
    michaelahess , August 1, 2009 1:41 AM
    Back around 2k I owned a computer business and I was a reseller of both Intel and AMD. AMD was far and away the most "friendly" towards the little guy. I sold well over 70% AMD. Only very high end builds or special requests were Intel. I will never buy Intel for my gaming rigs, and I will avoid them whenever possible for laptops. Intel is out for the dollar and nothing else. AMD has the compassion of a small town company but with "near" comprable products to Intel.

    Am I a fan-boy? No, I use Xeon's almost exclusively in server builds. Different market, different needs. Home/enthusiast use is a very different area.
  • 23 Hide
    JMS3096 , August 1, 2009 2:56 AM
    To be honest, AMD has a much greater level of innovation in the CPU market. If you look at the Nehalem architecture, almost all of its best aspects- monolithic quad-core design, integrated memory controller, point-to-point serial system bus- were originally introduced in K10. Does the Intel version work better? Yes. Was it original? No.

    That's what I love about AMD- they have creative ideas. Intel may be able to spit out better designs on existing ideas, but AMD far-and-away takes the prize for innovation.
  • 14 Hide
    matt_b , August 1, 2009 2:13 PM
    Luiken I work in a shop in a small town that builds systems day in and day out, and we've never touched an AMD system. Why? Not because we're fanboys...it's simple....Intel produces results and stable systems, and AMD is garbage....all the way from Athlon XP to Phenom. Make a better product line and I'll switch in a heartbeat. Same goes with graphics...ATI can now compete with NVIDIA according to benchmarks, but every user review I've read says their drivers are still garbage.

    If you have never owned/built an AMD, then why are you slamming it so badly? Make a better product and you will switch - how on earth was the Athlon XP not leaps and bounds better than the P4 (yet you call out the innovation that changed the CPU game altogether)? In those days, the Intel chips were inefficient, not easily overclocked, and ran hot hot hot. Not to mention the fact that the PIII was admittedly better for Intel back then compared to the dead-end P4 architecture (still had speed limitations).

    I can help you out though so you can rethink the one sided argument, I have many experiences with both AMD and Intel, and also ATI and Nvidia. Intel always costs more no matter what you get, bang for the buck goes to AMD every generation of chips without question. Both make quality chips, never seen "garbage" quality from either side. It is a systematic cycle with one camp being faster than the other. AMD was champ for years, Intel was champ the past few, and AMD is back on the upswing with the newer AM3 Phenom II. I flip-flop on graphics, whoever is up and for the price that works the best, then that's the one to go with. The 8800 series Nvidia GPUs were hard to beat, when they got lazy, went through so many renaming schemes, and had a big problem with the GPU failures on certain chips, I went back to the ATI HD 2000, 3000, and 4000 series. Again, for the money, you couldn't do better at the time with ATI's upswing in the GPU market. Drivers have never been a huge problem for me from either camp. However, they are more than anything the most inconsistent aspect from either side. As far as garbage goes, weather it be 32/64 bit Windows or 32/64 bit Linux, drivers from both camp have always just simply worked at the very least.

    Next time, form an opinion off of experience/knowledge instead of just trashing certain products because of what you "heard" or just feel about it!
Other Comments
  • 23 Hide
    michaelahess , August 1, 2009 1:41 AM
    Back around 2k I owned a computer business and I was a reseller of both Intel and AMD. AMD was far and away the most "friendly" towards the little guy. I sold well over 70% AMD. Only very high end builds or special requests were Intel. I will never buy Intel for my gaming rigs, and I will avoid them whenever possible for laptops. Intel is out for the dollar and nothing else. AMD has the compassion of a small town company but with "near" comprable products to Intel.

    Am I a fan-boy? No, I use Xeon's almost exclusively in server builds. Different market, different needs. Home/enthusiast use is a very different area.
  • -7 Hide
    Anonymous , August 1, 2009 2:12 AM
    AMD called me at one point and offered to ship me sample boards and processor(s). Listen, they called me and offered. We mostly sell Intel.
    I never did receive anything. SO why call and try to get me to switch. We sell mostly still Intel but that did piss me off. Just my .02 $
  • 10 Hide
    7amood , August 1, 2009 2:31 AM
    I love AMD... I think they are hard working and I believe one day they will reach the top.

    lets hope that when they reach the top... they won't be like their... uh... competition...
  • 23 Hide
    JMS3096 , August 1, 2009 2:56 AM
    To be honest, AMD has a much greater level of innovation in the CPU market. If you look at the Nehalem architecture, almost all of its best aspects- monolithic quad-core design, integrated memory controller, point-to-point serial system bus- were originally introduced in K10. Does the Intel version work better? Yes. Was it original? No.

    That's what I love about AMD- they have creative ideas. Intel may be able to spit out better designs on existing ideas, but AMD far-and-away takes the prize for innovation.
  • 6 Hide
    JAYDEEJOHN , August 1, 2009 3:47 AM
    It seems to ne, if youre to receibe free sample boards and free cpus, youd have followed that up with correspondence, Did you? And , if you did, what was the response from AMD? And , if that response wasnt to your liking, did you persue it further by naming the person you corresponded with to a superior?
    Complaining with little knowledge of what really happened sounds.....
  • 2 Hide
    JAYDEEJOHN , August 1, 2009 4:22 AM
    This availability , could it have been the reason for the EUs decision?
    They (Intel) have been found guilty 3 times, in three areas of the world, sounds like Intel had availibility all right
  • 11 Hide
    XD_dued , August 1, 2009 5:59 AM
    "He went on to explain how Intel's legitimate rebate programs work, and why the processor vendor accounted for more than 90% of his CPU sales in 2008"

    I've noticed on the puget systems website, in order to get an AMD cpu, you need to select the "more..." option of cpus. I wonder if this accounts for anything.......
  • 5 Hide
    FSXFan , August 1, 2009 6:18 AM
    Andy_Newton@JMS3096It's the result that matters. Blah blah blah blah blah.....


    Hey fanboy, take a chill pill. Nobody cares if Apple doesn't use AMD CPU's. I'm sure least of all AMD.

    I agree with JMS3096 though, most of the "new" features on the i7 were old news at AMD.
  • 9 Hide
    Anonymous , August 1, 2009 7:21 AM
    Intel have the better product _right now_.

    They haven't always had that, cue the Pentium 4 era to make an obvious example.

    Indeed, AMD competes exceptionally well at each level of the CPU market aside from the i7. How many of us are using an i7 today?

    Granted, with the i5 things are looking up even more for Intel but that's not "today".

    I don't have a particular preference when it comes to CPUs. I went from an Athlon 64 3000+ to an Athlon X2 3800+ to a Core 2 Duo E6600 and the next stop is likely the i5.

    That said, I do hope AMD puts out a great high-end product with upcoming architechtures so we can get away from being raped and plundered by Intel. The only reason there's $300/$500/$1000 CPUs on the market at all is because Intel know they have the market to themselves. If it weren't for AMD we might very well be paying those prices for double-chip, almost-4GHz Pentium D's even today.

    Finally, it's nice to see a rebuttal of the original article even if it was quite obvious from that one, and looking through their website at that point in time, that there are rather rabid Intel fanboys even at retail.

    That just isn't healthy for the consumers.
  • 9 Hide
    azxcvbnm321 , August 1, 2009 7:38 AM
    It's a little hard when you're against a company that can spend more on R&D than you make in a year. Most people don't know crap about computers. All those model numbers confuse them, and so when you're a company that has been around for 20 years as pretty much the only CPU seller, that helps. The billions in advertising helps too, the average Joe doesn't know which chip is better, all he knows is to make sure an Intel is inside.

    How is it that AMD only received 25-30% of the market with an obviously better chip? The difference was even greater than i7 vs. PhenII, at least PhenII does well in gaming comparisons, even winning a few benchmarks. AMD would've had to beat Intel for nearly a decade without interruption for them to get a 50% market share in my opinion. Hey, longtime old brands are valuable, that's why when SBC took over AT&T, they decided to change their name to AT&T. I bet there are some of you who haven't heard of SBC, but everyone knows AT&T. Same with Intel.

    AMD had a good run. It was shameful for Intel, a huge dominant monopoly, to let an upstart get the better of them for even one month much less than the 5 years or so AMD was on top. Still when you have nearly endless resources, you can afford to make huge mistakes and still come back, sort of like the Soviet Union in WWII.

    I'm pulling for AMD, but it's a big underdog and has been from the start. Just think about how terrible Intel's graphics chips are, yet they're by far the market leader. Yeah, it's from integrated chipsets, but see how much of an advantage they have? They can make money without even putting up a product, but ATI and Nvida have to consistently put out the best GPUs to have a chance.
  • 1 Hide
    MasterCATZ , August 1, 2009 7:58 AM
    all I can say is Prescott ... Just glad the C2D were better or lese I would still be an AMD person

    was AMD from k6 - XP Days ... lost Faith in their Opterons ect ... the C2D from intel made me swing back to Intel ,,, i am just hoping AMD will have a killer CPU / GPU ,., someday

    for now my nxt PC might just be an i7 ...

    What I really want is a true Green PC that will run on Minimum power when you choose ,,, and Blast off like i rocket when you unlock power feature ( 99% of my time on pc now is MSN / Watching Media .. very little game play but I do still get the Craving to play a game and like keeping PC capable of playing future games ... what I do not like is my pc Idling @ 600 watt's ( currenty getting an Nvidia ION system intergrated into my gaming case to leave on 24 / 7 )
  • 7 Hide
    FSXFan , August 1, 2009 8:19 AM
    @Luiken:
    I agree that Intel offers better stuff on the higher end. I have two of their CPU's right now. However, AMD makes really good stuff in the low-mid end, and they're just as reliable and stable as Intel's. AMD is hardly garbage, but you wouldn't know since you never touch their systems. I remember when Intel was getting their asses kicked by AMD for a long time, did the Athlon64 slip your mind? I still have one of those too. Just like ATI cards, you've read reviews on the All-Knowing Internet where people say their drivers are garbage. You didn't read many cause there's plenty of people (like me) who never have any trouble with their drivers. You didn't read very many nVidia reviews either because I've read plenty that said theirs were garbage (remember when Vista came out?). And you obviously didn't try an ATI card yourself, so why all the hostility towards these companies you have no experience with? Tell the guys you work with they should do a little research and not limit their options so badly. And next time they tell you "AMD is garbage" is the reason you guys don't sell them, maybe you could, I don't know, ask them for a better reason. Just a thought.
  • 4 Hide
    erdinger , August 1, 2009 9:07 AM
    I like Amd and I like Intel... That's because I love competition and innovation. I'd love to see both companies making a lot of money and investing it into better cpu' and such.

    I would even love to see a third chipmaker which could compete and change the whole market.

    At the moment Amd is the one who needs help so I support it more.
  • 9 Hide
    dheadley , August 1, 2009 11:11 AM
    I've been building my own computers since the 386 days. I've always tried new things and never stuck to what popular opinion says and is repeated by the masses. I've used both Intel and AMD processors over the years whenever one had the advantage over the other. I've tried all manner of off the wall combinations that the average user or the normal computer reseller wouldn't offer. For years I was into 3d creation programs before 3d was even a buzz word, and just recently took down a eight system render farm when we moved to a new house.

    Intel has had long periods of time when they made the best CPU's. My first dual systems were dual pentium/Tyan combos, I had dual pentium pro systems (one of my favorite processors) with more memory on the CPU's than most people had in main memory at the time. Dual Pentiun II systems. Xeons also, but never tried anything Itanium. I have a Pentium 4 system (one of my least favorite) in the house atm and a core2 system. Reliability wise, that I can remember, I've had around 5 or 6 intel CPU's fail on me over the years and a couple intel of motherboards(strangly never a "consumer" board, they were both very exspensive server boards). No over clocking and always very good cooling solutions, they just failed due to defects.

    AMD's 586-133 back in the day easily handed higher speed and far more expensive Intel processors their hats. Athlon64's did the same thing for YEARS. I've built just as many AMD systems as I have Intel and had changed all my render farm computers from xeons to opterons. They are slower, on a single system a render may take a few more minutes, but on the other hand they use so much less power to achieve 85% of the performance that I could throw in a couple more systems and still stay within the same power envelope and actually do distributed work faster overall. I've never had an AMD processor fail and only one motherboard fail but that was a Nforce 4 SLi board and not an AMD chipset. I currently have in the living room a AMD phenom system with a fanless CPU cooler, two Gigabyte 8600GTS fanless GPU's in SLi and a XFi PCI-e soundcard(waffle-iron)hooked to our big screen. It will play Crysis and Farcry 2 with some pretty good frame rates, runs HOT with only one big, almost silent fan on the power supply as the only cooling in the case. Couple of years now never being turned off and still going strong. My gaming rig is a Phenom II/Dual GPU sytem. I also have a opteron system and an Atholon X2 system with Dual GPU's.

    So really anyone saying that they are professional builders and never used any AMD products were pretty much shafting their customers. Saying they are junk is a total misrepresentation. Actually my experience is that AMD stuff is more reliable and costs less overall in build and operation.
  • 5 Hide
    doron , August 1, 2009 11:54 AM
    Ever noticed that most Intel fanboys use foul language?
    @Luiken $ others:

    Both intel and amd have something to offer in both server & home usage hardware. Intel indeed has the performance crown in both areas, but amd doesn't lag so far behind as one might think thanks to its aggressive pricing and forward / backwards compatibility in both server / home usage worlds, causing the company to lead the mainstream market and be the wisest choice for gamers on a budget.

    Both intel and amd have lots to offer, and if I would have enough money I would definitely get an intel. But since I'm one of those who's on a budget and still would like to play without any compromise, I owe a big thanks to amd for their fair pricing and good products.
    Small reminder (there are many others): On January 2007 a Q6600 sold for more than 800$.
  • 8 Hide
    Anonymous , August 1, 2009 1:02 PM
    You have to love how ever since Intel had any level of superiority, their fanboy and fan-retailers make it out like AMDs CPUs are "slow". Yeah, my Phenom II X4 940 is absolute overkill for all of my needs, but these folks try to convince me that I need an i7 that won't serve my needs any better. Maybe my Phenom II is super responsive, loads any of the multi-boot OSes in the blink of an eye, and cuts through compute-intensive rendering tasks like a hot knife through butter, but it loses synthetic and video encoding bencharks(neither of which I care about) to the i7, so it still sucks... Right...
  • 14 Hide
    matt_b , August 1, 2009 2:13 PM
    Luiken I work in a shop in a small town that builds systems day in and day out, and we've never touched an AMD system. Why? Not because we're fanboys...it's simple....Intel produces results and stable systems, and AMD is garbage....all the way from Athlon XP to Phenom. Make a better product line and I'll switch in a heartbeat. Same goes with graphics...ATI can now compete with NVIDIA according to benchmarks, but every user review I've read says their drivers are still garbage.

    If you have never owned/built an AMD, then why are you slamming it so badly? Make a better product and you will switch - how on earth was the Athlon XP not leaps and bounds better than the P4 (yet you call out the innovation that changed the CPU game altogether)? In those days, the Intel chips were inefficient, not easily overclocked, and ran hot hot hot. Not to mention the fact that the PIII was admittedly better for Intel back then compared to the dead-end P4 architecture (still had speed limitations).

    I can help you out though so you can rethink the one sided argument, I have many experiences with both AMD and Intel, and also ATI and Nvidia. Intel always costs more no matter what you get, bang for the buck goes to AMD every generation of chips without question. Both make quality chips, never seen "garbage" quality from either side. It is a systematic cycle with one camp being faster than the other. AMD was champ for years, Intel was champ the past few, and AMD is back on the upswing with the newer AM3 Phenom II. I flip-flop on graphics, whoever is up and for the price that works the best, then that's the one to go with. The 8800 series Nvidia GPUs were hard to beat, when they got lazy, went through so many renaming schemes, and had a big problem with the GPU failures on certain chips, I went back to the ATI HD 2000, 3000, and 4000 series. Again, for the money, you couldn't do better at the time with ATI's upswing in the GPU market. Drivers have never been a huge problem for me from either camp. However, they are more than anything the most inconsistent aspect from either side. As far as garbage goes, weather it be 32/64 bit Windows or 32/64 bit Linux, drivers from both camp have always just simply worked at the very least.

    Next time, form an opinion off of experience/knowledge instead of just trashing certain products because of what you "heard" or just feel about it!
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