AMD/iBuyPower Respond To Puget Column

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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  • michaelahess
    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
  • JMS3096
    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.
    23
  • matt_b
    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!
    14
  • Other Comments
  • michaelahess
    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
  • Anonymous
    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 $
    -7
  • 7amood
    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...
    10