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Premium Branding And Pricing - A Discussion With John Crank Of AMD

AMD's Opteron Comes Down Hard
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With Opteron, AMD has a shot at creating marketing programs and impetus behind a product to move it into the rarified atmosphere of the enterprise. We sat down and discussed the branding issues with John Crank, AMD's senior brand associate.

The details on Opteron are sketchy, at best, and little has been said to add to what was already said at CeBIT and IDF in February, 2002.

"We will not be disclosing specific information." Said John Crank, firmly.

In terms of positioning Opteron, Mr. Crank said, "We feel a new brand, the Opteron brand, is the best way to get into the mutli-way server market; a back-room solution.

"Right now we have the Athlon MP for a 1 or 2 way server solution. Most of the server market, 80%, is a 1 or 2 way market, and most of those systems have only 1 CPU in them.

"Opteron will go from the front-end to the mid-tier to the back-room database servers, what's called the big iron market. It's targeted against Itaniums, Xeon MPs, Xeon scalable solutions."

One area that we were particularly concerned with was the value proposition for Opteron. Mr. Crank allayed our fears by saying, "Opteron is not a mainstream product. It is an Enterprise class product. It will have a premium." However, he also added, "AMD will continue to compete on price."

This is going to be where AMD's detailed marketing efforts and programs have to come into play. Things that we have no information on presently. AMD is fighting Intel, with its deep pockets, entrenchment in the enterprise and among Tier One OEMs.

There needs to be a clear distinction on AMD's part, backed up with successful penetration of the enterprise market, that Opteron is a premium product, with premium margins, and one that will not have to undercut its rivals in price alone to remain competitive.

This is not the commodity desktop market, and it is essential that AMD's strategy results in Tier One adoption of Opteron in multi-way server product lines.

Branding is good, but Mr. Crank and his colleagues have their work cut out for them in every aspect of their marketing activities, and evangelism of AMD's technology.

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