Partners Cautiously Upbeat About New AMD Channel Program

"This is a once-in-10-years event. We're bringing disparate programs together under one banner," said David Kenyon, vice president of worldwide channel marketing at AMD. Kenyon said the main reasons for the program reorganization were to reach "underserved" portions of AMD's whitebox and reseller channels, and to better promote the chip maker's full platform solutions with partners.

A major change for AMD is the consolidation of its CPU and GPU partner channels. More than 75 percent of AMD's top partners are only engaged in one of those partner tracks, Kenyon said, meaning those companies are not receiving the program benefits of selling AMD central processors or ATI graphics, as the case may be.

The Fusion Partner Program consolidates the existing ATI Radeon Graphics partner program with the AMD Solution Provider program, AMD Channel Provider program and AMD Alliance program. A new tiering structure within the new, single partner track categorizes AMD channel partners as "Select," "Premier" and "Elite" -- the last being the highest designation reserved for the company's best-selling partners.

AMD partners greeted the new partner program with guarded enthusiasm. Darren Su, a co-founder of El Monte, Calif.-based system builder iBuyPower, said that AMD's "allocation issues" with its supply of parts to the channel "hurt its image" with partners in recent years.

"But this is a good move. It's like having only one source. We have one dedicated salesperson with AMD. Whereas if I want to do something with Intel and Nvidia, I have to talk to two different companies and two different people," Su said.

Su likened some delays to a recent engagement with Best Buy on a Black Friday promotion for an iBuyPower desktop with Intel Lynnfield CPUs and Nvidia graphics to "going to a party in high school, where mom says, 'Yes,' but dad says, 'No.' "

"So from a purchasing perspective, it's a lot easier with one source at AMD. You can get it done," he said.

Other partners were a bit more cautious about the new program. One prominent AMD partner on the West Coast confessed that he had not even heard about the Fusion Partner Program a week before its launch. And another Midwestern partner of both AMD and Intel said the legacy of AMD's deals with Tier 1 partners in recent years "still stings."

"The Dell thing is still on a lot of people's minds," said the source, who asked not to be named. AMD's late 2006 deal to supply Dell with desktop processors was seen by many in AMD's whitebox channel as a slap in the face.

Kenyon said AMD had specifically developed the Fusion Partner Program to address the issue of the chip maker's overemphasis on its distribution and Tier 1 partnerships. He said that AMD "currently over-invests in distributors and Tier 1 partners" despite company research that shows that more than 80 percent of channel revenue is being delivered by smaller partners.

How big is the over-investment? AMD spends better than 75 percent of its channel-targeted funds on distribution partners who don't drive sales demand downstream in the channel, Kenyon said.

To correct that, the program will kick-start an incentive-based rewards initiative called AMD Rewards in 2010 for all three partner tiers in the new Fusion structure. AMD also is launching a new partner Web portal early next year, as well as a reinvigorated demo program for product evaluations ahead of launch dates.

Kenyon also promised a larger AMD investment in market development funds for channel partners, but would not specify how large that sum might be.

"One thing to know about the MDF money is that it's in the form of variable acceleration funds -- as they grow their business, we pay out more," he said.