CRN Interview: AMD CEO Hector Ruiz

RUIZ: I can't comment on this. We're always alert as to when it is appropriate to take advantage of windows of opportunity, [as] we have done in the last year and in the past. We've been pretty open that we are doing things to raise cash, and we've been open about systematically divesting ourselves of Spansion [AMD's memory spin-off]. We are doing things to improve our cash position, but at this point in time I don't see our balance sheet crying out for any unusual or desperate measures.

CRN: Will Dell revisit its relationship with AMD now that Kevin Rollins has left as Dell CEO and Michael Dell is back at the helm? Has AMD had any conversations with Michael Dell?

RUIZ: I think that the plans we have with Dell have been worked on for quite a long period of time, and Michael himself was very instrumental and involved in the discussions and all negotiations. I've had no conversations with Michael that led me to believe that there is anything different at the moment. We're rooting for them. They're going through a transformation of the company. We're a partner, and we'll do what we can to help.

CRN: You mentioned the importance of Barcelona. What will be its impact on AMD this year?

RUIZ: This is an incredibly important product transition. We don't expect the ramp [this year] to be dramatic because it's a new core, new micro architecture and platform. The biggest impact it will have is that we'll see a large number of customers and partners align themselves behind the technology. We expect that ramp to follow along the same lines as when Opteron began to get adopted. So I expect it to follow the same patterns. Over 2007, it will have a significant impact on what I call design wins. People are committed to the architecture and product, and [it will be] a very significant part of revenue and earning in 2008.

CRN: What has AMD done to address supply issues so they won't occur again?

RUIZ: It is one of those things I wish there was one silver bullet and it's over. But it's not. It's a number of things. First of all, the most dramatic shift to mobile was a big part of the challenge, and that trickled down into the supply chain. We had a change in demand for packages, and although we have great package suppliers, they have the same problem as us. So we said to them we have to take some risks and commit to higher volumes in supply chains, which we are doing. And we are getting a more effective engagement process with customers around the world so we're as up to date as possible.

When the third quarter began, the expectation for the transition to mobile was very different than what actually happened at the end of the year, and that's no fault of anyone. It's just the way the market dynamics moved. So what we put in place is a more effective engagement process, taking more risks with the supply chain, and we're getting more inventory. And that combination of things puts us in a good position. We feel pretty confident.

CRN: AMD told CRN recently that it will try to grow its SMB business in 2007 and will be targeting VARs aggressively. What's the plan?

RICHARD: When we embarked on our commercial business when we launched Opteron, we knew we needed first and foremost to win global accounts with a global OEM. You can't get credibility in the commercial space if you don't get marquee wins with large companies. It's not that we suddenly realized we needed to focus on SMB. We always knew how important the SMB market was, but you've got to start somewhere. So we started where we had the right products and partners to get the biggest bang for the buck and started a new marketplace for AMD. Now we're three years into it, and we've had some major wins and are now at about 50 percent market share of server space, and we have close to 80 percent of the Fortune 500.

Now that we've established AMD and Opteron as a credible play, it's time to go in and do a better job in the SMB market. That market has different channels, different needs and different product specifics. The reason we're focusing [on SMB] now is that there are only 500 Fortune 500 companies. We are aiming more of our marketing dollars and channel programs for that part of the market, and global OEMs are taking a great interest [in the SMB] market.

NEXT: What AMD has in store at the Executive Forum.