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 and 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 and 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.

Kruger says while AMD is responsible for some key innovations in the PC and server worlds, the vendor is still riding on those breakthroughs, while Intel has managed to leapfrog its rival this year. "AMD came out with some things that were ahead of their time, but now the time is passing them and they're still not going anywhere with it," Kruger says.

Case in point: AMD just recently came out with support for DDR2 memory, a capability Intel has supported for more than two years, Kruger says. "Intel has continued to push the limits of hardware and make new technologies where AMD is pretty much just sitting still."

Dallman says Intel has shifted its focus from offering new CPUs and chipsets to overall platform-based solutions. Its Verified by Intel program is the cornerstone of that new focus. "That wasn't about our CPU or our chipset," he says. "It was about what was needed in the marketplace for whitebooks to take off, or for partners to have the chassis they need."

Dallman also points to the recently launched Core Duo 2 platform and the architectural road map for that product line. That platform is perhaps the most significant leap in innovation the company has brought to market in 20 years, he says. "This wasn't about speeding up the Megahertz, or putting in lower power; this was a complete change in the architecture."

For the first time, Intel is offering a common microprocessor architecture across its desktop, mobile, workstation and server CPU lines.

"Now you have active-management technology and virtualization built into these machines,"Dallman says. "Not only is there a lot more performance; it generates a whole host of services that [partners] will be able to offer. It's a good time for partners from that standpoint."

The services partners can offer with Intel's new vPro processors, also built on the same core architecture, allow for fine-tuning of systems to support a variety of enterprise features, including communications, remote diagnostics and security.

While Intel may have trumped AMD for now, most experts don't expect the company to roll over anytime soon. AMD will continue to advance its Direct Connect architecture as it releases new multi-core processors. And its $5 billion acquisition of graphics-chip processor ATI means AMD will likely embed multimedia processing within its CPU chipsets over time, many observers agree.

"That's kind of moving the processors where they should be," Kruger says. In addition to having implications for power handling and performance, that combination is also leading to new form factors and further hastening the convergence of computing and multimedia, he adds.

Still to be determined, however, is whether Intel will forge ties with another key provider of graphics processors, Nvidia, and effectively create an entire ecosystem of third-party processor providers.

On the server side, companies such as HP and IBM are forging ahead in power utilization and new cooling capabilities. Virtualization is gaining momentum, and the newest crop of blade systems are letting customers incorporate computing, storage and networking in a common rack. On the client side, new mobile computers are taking advantage of expanded memory capacities and better power utilization.

Does all of this mean Intel will retain its crown next year? Maybe. But either way, there's a good chance the chipmaker will continue to serve as the innovation role model for competitors in its field.