Dell Sighted Developing AMD Opteron Servers

@ 2004/06/29

A financial analyst said on Tuesday Dell planned to sell its own computers that use processors from Advanced Micro Devices, citing so-called channel checks.

“Based on our channel checks, AMD has finally been able to penetrate Dell with its Opteron processors targeting the server market,” Tai Nguyen, an analyst with Susquehanna Financial Group, wrote in a note sent to clients.

Comment from Sidney @ 2004/06/30
That excitement may be overblown, say analysts. With or without Dell, they say, AMD has the opportunity to gain significant market share against its archrival, Intel Corp. (NasdaqNM:INTC - News), the world's largest chip maker.

Given that AMD already has heavyweights International Business Machines Corp. (NYSE:IBM - News) and Hewlett-Packard Co. (NYSE:HPQ - News)as customers, the issue of whether it wins over Dell is often overplayed by AMD detractors, said Dean McCarron, principal analyst with Mercury research.

"That's really what it's used for -- manipulating perception rather than having any kind of significant impact on reality," McCarron said.

It was not the first time such speculation has surfaced, and the comments prompted Dell's regular reaction to the notion that it would no longer be an all-Intel house.

"We don't hide the fact that we are all Intel, but we have looked at AMD and continue to do so," said spokesman Bruce Anderson. "But at this point, I can't comment on the report and whether we plan to do anything or not based on Opteron."

Dell, a popular name among consumer PCs, is also a large supplier of server computers that are based on a PC technology called x86. The x86 server chip market has grown to $3.5 billion a year, McCarron said. AMD chips have gone from a next-to-zero presence to a 5 percent share of that market by number of chips shipped, following last year's introduction of Opteron, he added.

The most important company to win over was Hewlett-Packard which already ships AMD-based servers Proliant, said IDC analyst Mark Melenovsky. IBM also uses the chips in its xSeries line, he said.

"The IBM xSeries and HP Proliant family carry a lot of enterprise brand class recognition," Melenovsky said. "I don't think the market has been held back because Dell hasn't introduced it."
Comment from jmke @ 2004/06/30
Hold the front page: No AMD-Dell deal