Fighting talk
AMD has had a turbulent relationship with the channel over the past couple of years. As underdog to giant Intel it had traditionally compensated by trying to foster closer channel ties.
While the Athlon 64 offered clear advantages over anything Intel had to offer in the consumer desktop space, AMD was the darling of the channel, but then a number of things happened to tarnish that image.
In the middle of 2006 it was revealed that, for the first time, Dell was going to start selling systems with AMD processors as well Intel ones. That alone wouldn’t have been a problem if it hadn’t coincided with a shortage of some Athlon 64 processors in the channel later that year. AMD always denied that the shortages were a result of its new relationship with Dell, but the damage to some of its channel relationships was done.
At around the same time Intel got its act together and launched the new Core2 processor range. It got an all round thumbs up from the PC press and suddenly AMD was faced with the nightmare scenario of being out-competed on both performance and availability by Intel.
Also in mid ’06 was the small matter of AMD shelling out $5.4 billion to buy ATI. While there’s no doubt that ATI was, and still is, a great company, the move tied up huge amounts of capital and man-hours at a time of great transition in the industry.
All of these events combined to make many channel players go to Intel (and to a lesser extent NVIDIA) where previously they may have gone to AMD (or ATI).
Annus horribilis
Much of 2007 was spent fire-fighting. In February 2006 AMD’s share price topped $40, by the end of 2007 it was more like $7. The products of the combined AMD/ATI were consistently out-performed by those from Intel and NVIDIA and the consequent relatively poor demand for AMD/ATI products hampered its concerted efforts to repair its channel relationships.
Moving into 2008 there have been some green shoots of recovery. While Phenom isn’t yet quite what many people hoped it would be, its new Spider platform is considered by many a step in the right direction. It finally has a graphics performance leader in the form of the Radeon HD 3870 X2 and, barring write-downs on the value of its ATI purchase, it came close to being in the black again in Q4 2007.
With its annus horribilis behind it, AMD seems ready to target the channel with renewed vigour. In the first of a series of HEXUS.channel interviews with senior AMD channel figures, I speak to the EMEA head of channel marketing Richard Baker to find out what we can expect.
“AMD is fighting the battles they can win,” says Baker. “One of the advantages that we have over our processor opposition is that we’re a lot nimbler than they are; we can move our strategy quite quickly.”
“Often our best strategies are our simplest ones and one of the things we have been doing over the past six months in the channel is realigning our focus on to the smaller guys. This can involve things like educating the channel on AMD LIVE! and how they can use it to get better margin.”
