Innovation Inside

Over the past three years, AMD has beaten larger rival Intel to the punch at a number of important technological milestones. When AMD came out with its 64-bit Opteron processor in 2003 with an architecture that would support existing 32-bit systems, it changed the landscape of the industry-standard server market. AMD also beat Intel to market with 64-bit dual-core PC processors. The company's ability to offer higher-performing CPUs at lower costs than Intel also converted at least some solution providers that were once wedded only to Intel.

Jarrod Broome, owner of Cheetah Computer Sales & Services in Dalton, Ga., was so enthralled with AMD that he had the company's logo tattooed on his shoulder. "I don't have a problem with Intel. They are just more expensive for the same performance or less," Broome says.

Analysts last year were raising concerns that Intel was perhaps losing its way. So it comes as some surprise that in this year's VARBusiness Annual Report Card (ARC) survey, channel partners overwhelmingly said not only that Intel was the most innovative vendor in its category, but also that the chipmaker was more innovative than any vendor in any category.

The results beg the question: Do partners have blind loyalty to Intel, or has the microprocessor giant's recent barrage of new processors--the new ViiV for consumers, Vpro for enterprises and the overall Core Duo line of CPUs--given partners confidence that Intel will lead the next generation of computing?

Steve Dallman, Intel's director of distribution and channel-partner marketing, acknowledges that AMD scored some big coups over the past few years. But channel partners aren't that short-sighted, Dallman argues.

"In terms of innovation, I don't think any company can be measured by what has happened over a two-to-three-year time period," Dallman says. "What you have to look at, especially with partners, is what the company has innovated over decades."

In fact, Intel's ascent to the top of the ARC innovation chart really doesn't tell the whole story. The chipmaker backed into the most innovative vendor slot, thanks to a precipitous fall by last year's winner, Samsung. And for the second consecutive year, Intel's overall innovation scores have declined. For that matter, the average Product Innovation score in Client & Server Processors has declined by a point every year since the category was introduced in 2003.

So, either channel partners have raised the bar for what constitutes innovation or vendors aren't innovating as they once did.

More likely, innovation trailed off in the earlier part of the decade because of an overall slowdown in IT spending and resulting cuts in R&D by vendors, says Jonathan Kruger, general manager of multivendor channel partner J-Tech Systems in Tomball, Texas. "Now it appears we're seeing more incremental improvements in overall innovation from IT vendors," Kruger says.

IBM, Sony, Toshiba and VMware are also among the leading innovators, he says, pointing to the former three vendors' development of cell-based processors and VMware's advancement of server virtualization. "You're really starting to see other companies that are doing things that are new," Kruger says. "They're pushing the industry."

NEXT: What separates Intel from AMD.