Industry Voices: AMD's Henri Richard Puts Priority On Servers
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\ • \ While AOpen viewed its slick-looking miniPC as a consumer product, system builders had other ideas, snapping up inventory for a variety of commercial niches. \ \ • \ Intel prepares to fire back at AMD with its dual-core server platform in what is shaping up to be a bloody battle for market share. \ \ • \ AMD's Henri Richard talks with CRN Editor Heather Clancy about the company's priorities and channel plans. \ \ • \ SAS drives are ready to go, but now system builders have to prime the market. \ \ • \ Distributors say system builders need to become solution builders, and they want to help. \ \ • \ Custom systems are under pressure, but easing component shortages could help, CRN polling indicates. |
As executive vice president and chief sales and marketing officer at Advanced Micro Devices, Henri Richard is responsible for the chip maker’s positioning for both solution providers and system builders. And given his background on the VAR side of the business, he’s keenly aware that differentiation is one of the single most important benefits he can offer his channel partners. Richard spoke with
CRN
Editor Heather Clancy about the Sunnyvale, Calif.-based company’s aspirations for 2006 in the commercial market as well as its continued progress in the server world.
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CRN:
What is your top priority vis a vis the system builder portion of your channel for 2006?
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RICHARD:
This is really completely in line with the strategic priorities for AMD as a whole: first and foremost, to expand our success in the server space to commercial clients. I believe that the system builder community has a large role to play in that regard. They serve a lot of the government/education opportunity, either at the regional or the federal level sometimes. They, of course, also cater a lot to the SMB and in some cases even to the Fortune 500, which will customize certain things. So the system builder channel is going to be very important in supporting that initiative that we’ve stated, which is: In 2006, for AMD, this is the year of the commercial client.
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In fact, we’re launching a new initiative called CSIP, which is the Commercial Stable Image Platform, which is new to the AMD environment and I think will be very interesting to the system builder community.
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CRN:
Can you go into that a little bit? What’s important about it?
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RICHARD:
Well, maybe I should finish by going through our three priorities and then get into the specifics. The second priority for us is the high-growth markets. We are enjoying
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phenomenal growth in those markets around the world. One of their characteristics is that in many of these markets, the established tier-one players in our industry are not the dominant players in many of those countries. Those countries are really developing themselves, thriving on very solid local players, local system builders.
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So that’s the second aspect of AMD’s priorities that is particularly focused on the channel and the system builder community.
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Our third priority is really to ensure that in the consumer space, where system builders also have a very important role, particularly at the very high end in the gaming and prosumer area, we continue to provide leadership technology and differentiated solutions to the system builder community.
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So, even though our main focus is the commercial push in 2006, we’re not forgetting our very solid and, I would say, perennial position in the consumer space. We want to continue to support the channel in consumer solutions, but with an eye on differentiation and offering an ability for them to bring some value add to the market in what I consider to be an ocean of lack of differentiation, due to either the Centrino marketing campaign or the Viiv marketing campaign.
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CRN:
If we could start with the commercial objective: What is it that you feel AMD really needs to do this year and moving forward to really drive into that corporate channel? Why is that such an important channel for you?
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RICHARD:
It’s an important strategy because, first, it’s a vast market. There’s only so much we can go and grab in the consumer space. We have, you’ve seen probably in 2005, achieved some interesting milestones in terms of market share. We found ourselves in a situation where we were shipping more than 50 percent of the consumer PCs sold in retail. Although there’s always room to grow, we have to be responsible and understand that this is a market where there are certain natural limitations to how much market share we can grab. When you look at the commercial space, we have a huge opportunity for growth, and I think that the value proposition that customers are seeing on the consumer side are equally valid for the commercial side. It’s well known that we bring more value to the market, and the opportunity of choice and differentiation, as well as—because of our open ecosystem strategy—a better solution all around. It’s not just the processor. It’s the processor, it’s the chipset, it’s the configurations. By bringing more value to the customer, I think we can have an equal opportunity to grow in the commercial space as we did in the consumer space.
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Our limitation in the commercial space has been the fact that we did not offer one-stop shopping like the competition does when it comes to the total platform, meaning the motherboard, chipset and the processor. So, partnering with companies like Nvidia and ATI and people in Taiwan such as Asus and MSI and Gigabyte and others, we decided to put together a commercially stable platform that would bring exactly the same attributes that the competition could offer with still the variety and freedom of choice that the AMD open ecosystem offers. That’s the CSIP initiative, and it’s being launched right now as we speak.
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It will bring a lot of value to the system builder community because, frankly, today, they’re all feeling the pain of Dell. And it’s very difficult, as everyone knows, to compete against Dell with an Intel offering. So, by bringing to the system builder community an equal or better quality platform, with more variety and more opportunity for differentiation on the AMD ecosystem, we’re going to give them an opportunity to sell what Dell can’t sell.
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While AOpen viewed its slick-looking miniPC as a consumer product, system builders had other ideas, snapping up inventory for a variety of commercial niches.
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•
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Intel prepares to fire back at AMD with its dual-core server platform in what is shaping up to be a bloody battle for market share.
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•
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AMD's Henri Richard talks with
CRN
Editor Heather Clancy about the company's priorities and channel plans.
\
\
•
\
SAS drives are ready to go, but now system builders have to prime the market.
\
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•
\
Distributors say system builders need to become solution builders, and they want to help.
\
\
•
\
Custom systems are under pressure, but easing component shortages could help,
CRN
polling indicates.
\
•
\
While AOpen viewed its slick-looking miniPC as a consumer product, system builders had other ideas, snapping up inventory for a variety of commercial niches.
\
\
•
\
Intel prepares to fire back at AMD with its dual-core server platform in what is shaping up to be a bloody battle for market share.
\
\
•
\
AMD's Henri Richard talks with
CRN
Editor Heather Clancy about the company's priorities and channel plans.
\
\
•
\
SAS drives are ready to go, but now system builders have to prime the market.
\
\
•
\
Distributors say system builders need to become solution builders, and they want to help.
\
\
•
\
Custom systems are under pressure, but easing component shortages could help,
CRN
polling indicates.
|
\ • \ While AOpen viewed its slick-looking miniPC as a consumer product, system builders had other ideas, snapping up inventory for a variety of commercial niches. \ \ • \ Intel prepares to fire back at AMD with its dual-core server platform in what is shaping up to be a bloody battle for market share. \ \ • \ AMD's Henri Richard talks with CRN Editor Heather Clancy about the company's priorities and channel plans. \ \ • \ SAS drives are ready to go, but now system builders have to prime the market. \ \ • \ Distributors say system builders need to become solution builders, and they want to help. \ \ • \ Custom systems are under pressure, but easing component shortages could help, CRN polling indicates. |
CRN:
You used the server validation program to good advantage in the past year. Can you tell us the progress of that program?
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RICHARD:
Our [Validated Server Program] is actually gaining velocity. We recently announced that we were expanding the number of partners that are part of this program. Frankly, we are basically responding to market demand. Some of these partners have been working on joining the program for quite a while. They were concerned about the retaliation of our competition, and for some of them, their late entry into the Opteron server space is just a matter of their feeling comfortable enough that the market momentum and the demand out there is significant enough that any retaliation that they might endure is compensated by the business they can immediately gain from AMD.
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CRN:
Can you talk about any work you may be doing in the consumer space that would apply to the digital integrator community?
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RICHARD:
In the consumer space, we’re taking a different approach than the competition, because we are not a believer that the PC will be at the center of everything in your digital life. We’d rather see the PC, the Media Center, as a senior citizen in the community in your house, but not at the center of everything. I happen to have experience in the audio and video industry in a past life, and I think that having a PC in your home and using it to control a certain number of functions is obviously going to be part of our future. But given how fickle the digital world is, you certainly don’t want to put it in a position where any single point of failure would bring down your entire home.
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So that’s one aspect where we’ve been working with our partners to understand what’s the right position for the PC. It’s not going to replace the set-top box or the cable box. It probably shouldn’t replace your alarm system. But it has a role to play in connection with all the electronics systems around the home. It’ll be helping to integrate some of those functionalities, maybe in certain ways helping the user manipulate some of those functionalities, but not being positioned as a single point of failure. That’s what we’ve put under the AMD Live initiative. We’re working with a broad set of partners around the world to bring together a platform. And frankly, right now, we made an announcement of this initiative at [the International Consumer Electronics Show] but we didn’t present any products. Our intention is to start to unveil a set of products around the [Computex Taipei 2006] time frame [in early June].
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CRN:
What about in the mobile space? As the market continues to move toward notebooks and other mobile platforms, what is the key driver?
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RICHARD:
I can’t resist reminding you and your readers that at this time we have the only 64-bit mobile technology available. The competition is still not shipping anything that is 64-bit-enabled, which with the upcoming Windows Vista operating system launch is probably a mistake. We’ve been early on with the 64-bit capability in the mobile space. Some people dispute whether it’s really necessary or not. I think it’s part of natural evolution. To a great extent, 32-bit systems are slowly becoming obsolete, and I think it’s clear our marketplace will be a 64-bit marketplace sometime in the future. So why not invest now in the right technology? We strongly feel that if you’re going to be buying a notebook today, it should be 64-bit-enabled.
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Secondly, obviously, multicore technology will come to the mobile space. We’re going to start shipping products in the second quarter that will provide performance enhancements [and] battery life enhancements. It also will start to provide virtualization technology, which may allow us to bring a level of security and functionality into the mobile space that will be really interesting.
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CRN:
The system builder community has been slower to adopt and begin building what you would call an unbranded notebook. Are there other things you’re doing to help encourage the mobile platform?
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RICHARD:
You’re right. It’s more complex for a system builder to bring a high-quality mobile solution to the marketplace than a desktop or even a server. It could be counter-intuitive, but it’s reality. Part of it is because the production of notebooks is really concentrated in the hands of a few ODMs in Taiwan that are not equipped to deal with smaller quantities and that have not established channels of distribution that allow system builders to have access to high-quality components in a cost-effective way.
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As a result of that, there is a high concentration of market share in the hands of a few ODMs, which is very different from the desktop market and even to a degree the server market—although, of course, in the server market you have three main players that have a majority of the business. There are a lot of opportunities for differentiation for system builders in the server market because there are so many vertical niches. That situation doesn’t exist yet in the mobile space, and it’s unclear to me at what speed the market will mature and offer those opportunities to system builders. But it’s not a question in my mind of whether it will; it’s just a question of when.
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We’re working with our distribution partners to make sure that should the system builders want high-quality mobile components with a certain level of customization and personalization based on AMD technology, they would have access to it through our distribution network.
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CRN:
What are your vertical priorities for the year?
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RICHARD:
We do have a couple of strong verticals that are still leading the way, one of them being financial services. … The software in those verticals are very efficient on the AMD 64-bit architecture. This has led to early adoption because of the tremendous performance improvements. So, of course, we continue to nurture those advantages. We have actually put in place in our business development community vertical teams that are focused entirely on these. But also we are really expanding from our initial high-performance computing beachhead into just the traditional data center applications. So you should expect us to be a lot more active in the more traditional applications for computing in the data center, therefore expanding to other types of customers, other types of verticals, other types of software partnerships.
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Opteron, in its situation today, covers about 95 percent of the computing needs that a system builder can be confronted with. But in its future road maps, if you look at all the various RAS features that we’re adding and the fact that we’re scaling to dual-core [and] quad-core, we’re increasing the number of interconnections between the processor. Pretty soon, you’ll be able to build very high-end performance, transaction-oriented machines on the Opteron product that will really reach out to the mainframe.
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•
\
While AOpen viewed its slick-looking miniPC as a consumer product, system builders had other ideas, snapping up inventory for a variety of commercial niches.
\
\
•
\
Intel prepares to fire back at AMD with its dual-core server platform in what is shaping up to be a bloody battle for market share.
\
\
•
\
AMD's Henri Richard talks with
CRN
Editor Heather Clancy about the company's priorities and channel plans.
\
\
•
\
SAS drives are ready to go, but now system builders have to prime the market.
\
\
•
\
Distributors say system builders need to become solution builders, and they want to help.
\
\
•
\
Custom systems are under pressure, but easing component shortages could help,
CRN
polling indicates.
\
•
\
While AOpen viewed its slick-looking miniPC as a consumer product, system builders had other ideas, snapping up inventory for a variety of commercial niches.
\
\
•
\
Intel prepares to fire back at AMD with its dual-core server platform in what is shaping up to be a bloody battle for market share.
\
\
•
\
AMD's Henri Richard talks with
CRN
Editor Heather Clancy about the company's priorities and channel plans.
\
\
•
\
SAS drives are ready to go, but now system builders have to prime the market.
\
\
•
\
Distributors say system builders need to become solution builders, and they want to help.
\
\
•
\
Custom systems are under pressure, but easing component shortages could help,
CRN
polling indicates.