AMD Turns To VARs To Help Build SMB Market Share

Advanced Micro Devices has set its sights on small and midsize businesses this year and is developing new products, programs and incentives for VARs and resellers to execute on that mission.

Kevin Knox, vice president of AMD's Commercial Business group, said in an interview with CRN Wednesday that the Sunnyvale, Calif., chip maker is expanding its SMB product line and partner ecosystem to go beyond the enterprise market and enlarge its share of the SMB space in 2007.

Last month's shipment of IBM pedestal systems based on AMD processors was a first step in making that happen, and other tier-one OEMs will follow suit with AMD-based pedestal systems shortly, Knox said.

"We are going into 2007 with the first product geared and targeted at a segment where we haven't paid attention, frankly," Knox said. "IBM's pedestal design has opened up a new market for us, the SMB market, but the key way to get to that segment is through the channel. That's why I'm excited. We now have product that these channel guys want. "

AMD has been ramping up new programs and incentives for systems integrators and will continue building on that as it develops a new programs for VARs and other resellers, according to Knox. He said top AMD executives have signed off on the SMB plan, but he declined to specify the dollar investment.

"It will be significantly higher than what we've ever done before in the systems channel, which is separate from our components business, which is selling to system builders," Knox said. "We haven't finalized everything yet."

Initially, AMD aims to reach out to thousands of SMB partners through distributors, leveraging new SMB products developed by partners and pushing them through established channels of Hewlett-Packard, IBM and Dell. "If I can use IBM's infrastructure to get the messaging out to these guys, then it's a better way to get at the resellers and VARs," he said.

AMD also is working with ISVs, including Microsoft, to develop solutions for VARs and resellers, many of which are software-focused and not as "hardware savvy," Knox said. "We did work last year with the systems integrators, and we'll focus heavily on how to get to those VARs and resellers that are installing five computers into a dental office," he said.

AMD has worked with direct market resellers such as CDW and Insight but isn't happy with the volume of systems sold through that channel. In 2007, AMD aims to ramp up the volume of units sold through direct marketers and integrators, Knox said.

Knox acknowledged that Intel is reaching out to the channel more aggressively but noted that AMD won't follow in its rival's footsteps.

"We are willing to make sacrifices to establish ourselves in this market and set the stage for an AMD standard," he said. "Some [vendors] are trying to reverse their view of the channel. But we're relatively new, and we won't copy what our competitor does. We will add value where we can add value to the system channel."

AMD's commitment to system builders on the component side of the business remains strong despite some Athlon X2 supply issues that caused conflict with channel partners last fall.

"I don't necessarily disagree with how they saw it at the time, but since that time there are clear indications it was not what they thought initially," Knox said, alluding to a belief by some partners that AMD handed over most of its inventory to new partner Dell before the holiday PC selling season, leaving them empty-handed.

"We didn't build enough of these things that were in gigantic demand, and we're learning and putting in place processes so we can better handle this in the future," he said. "Hopefully, these guys have seen what's transpired over the last few months."

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