Dell's Stealth AMD Move - InformationWeek

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11/15/2005
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Dell's Stealth AMD Move

If Dell wasn't intentionally stirring up a hornet's nest when it began offering packaged processors from Advanced Micro Devices Inc. on Dell.com, the company greatly miscalculated how intensely the battle between Intel and AMD is being monitored throughout the technology industry.

Dell's strategy of remaining the only supplier among the big four computer-systems vendors not to offer systems based on AMD processors (Hewlett-Packard, IBM, and Sun Microsystems are on board) has been under a microscope for the past two years as AMD has increasingly gained stature in the enterprise market. AMD chairman Hector Ruiz has likely become a little gun-shy from having to constantly duck questions about why his company has been unable to convince Dell to join other computer makers in providing platform choice.

Dell CEO Kevin Rollins last week said the company is offering the AMD processors to meet customer demand. But that raises the question: If there's demand for the processors, wouldn't there also be demand for systems that incorporate them? Maybe Dell is floating a trial balloon to gauge market readiness for AMD-based Dell computers. If so, the company already has learned some important lessons.

Dell's staunch allegiance to an Intel-only portfolio likely has already resulted in some lost sales for the computer maker. Various market analyses show AMD steadily increasing its presence in just about every type of computing platform and market segment. Sometimes, the back door is the best way to provide entry to a previously unwelcome guest.

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