What Happened to the Lean Mean AMD of Yore?

“All warfare is based on deception. Hence, when able to attack, we must seem unable; when using our forces, we must seem inactive; Hold out baits to entice the enemy. Feign disorder, and crush him.”

- Sun Tzu, the Art of War

This is an extended version of the article that I wrote for print. Admittedly it’s one of the hardest articles I’ve written in awhile as I wanted to ensure that what I say comes across exactly as intended. It’s no secret that I have been a fan of AMD for years and years – and I wrote this article with nothing but good intentions.

I can’t tell you how many times great things were said about AMD and their meaningful execution over the last few years. They were doing so well, they cracked into the mainstream, they acquired ATI, they landed some huge deals, and they even caused Intel to fundamentally change for the better.

Yes, no matter what anyone says, I believe (as do many others) that AMD caused Intel to transform into a much stronger, much leaner company. Things were great for AMD for awhile, but that was only the first round and it wasn’t quite a knockout – there are 11 more to go – and Intel is currently wailing on AMD like Mike Tyson did to that pizza guy.

Not only did they lose the performance crown, but AMD experienced a few missteps since they “souped with the devil”. They allegedly alienated their channel customers, arguably their most profitable segment. It seemed as if they weren’t able to meet the additional volumes required to support another major OEM while managing their other relationships. They were late buying ATI, and they sparked a price war which ultimately killed their margins. Such missteps have turned even their staunchest fans in a tizzy (except for that guy who writes the Journal of Pervasive 64 bit Computing blog, what on earth is he smoking?).

I was worried when I heard they had to go for more financing – I made some calls all the way up the ladder. I have spoken with key people on the inside who (thankfully) recognize the problems and they are working hard to change the company. The bottom line is AMD recognizes the need to change the way they do business - very much like Intel did in the last couple of years. Essentially I believe AMD bit off more than they could chew, and many months ago I thought things would be much better for them today than they actually are.

Let’s face it, this isn’t just a mountain stage – as it were in the Tour de France – this is like one giant mountain after another. Where’s the EPO when you need it?

AMD must change the way they do business. Odd that I said the same thing about Intel a couple of years ago.

AMD must now leverage large volume in new ways, streamline its sales teams, and change the way it innovates. The company should no longer be laser focused on chips; it needs to start delivering easy-to-configure, easy-to-understand platform solutions, platforms that actually make sense to the end user.

As an example, people don’t buy notebooks because of the chip inside – they buy notebooks based on the screen size, battery life, features, etc --- this is why innovating at the platform level is CRUCIAL. They should also put more emphasis on sales – like old school feet on the pavement sales.

AMD should also save the marketing jargon for another industry; in press briefings for Barcelona in April, the company was still harping on Intel's use of FSB technology-despite the fact that at the time, Intel's FSB-equipped CPUs were taking AMD chips to the woodshed! The company needs to start building great products again and focus its message on what those products can do, not on their competitor's shortcomings.

AMD also needs to recognize that Intel does not have their legs yet! Intel has so much more room for improvement it’s scary – and even scarier is the fact that they recognize that more improvements are needed. Let’s not forget that Intel was still profitable even in the worst of times.

Onwards and upwards, I always say, and the R600 is the next major product in the newly formed AMD+ATI merger. The R600 is the card will go down in history as the one with the most screwed up launch schedule since the R520. I can’t tell you how many times I heard we were receiving samples and never did. It became almost became a joke internally, although we understand that the integration with AMD has been challenging at times, there is no excuse for the mega tardiness.

When we finally received boards we were *initially* disappointed, as I’m sure you’ve read some preliminary assessments of the cards on the internet. However, I have to tell you, the R600 is like a fine red wine, it actually gets better with age. Much better…

There is no question that AMD(ATI) Vista video drivers are excellent, and AMD keeps sending out new versions which increase performance in pretty much every area. I think the R600 is a very interesting series overall – I also believe that AMD understands what they need to do to compete with this product.

As long as they understand that it’s great in some areas and challenged in others, they should be able to come up with a strategy that makes their boards very compelling. That said, if they do what I think they’re going to do the R600 should do very well for them.

Rumour has it that AMD is also announcing new processors in the extremely near future – that is the Phenom, a processor features four native cores on one chip. As their marketing suggestions, native=better – but at this point it’s meaningless unless we see noticeable performance or incremental value gains. I have high hopes, because I believe coupled with new chipsets and some “platform innovation” we could have a new flagship for AMD.

In a nutshell, AMD accomplished quite a bit in the last few years – their most notable accomplishment was becoming an accepted alternative to their competition. Now the battle gets only harder, because no longer do “horse races” matter. Horse races only make things more difficult for a "tiny" company (it's all relative) like AMD. The ONLY way AMD can compete with giants is to out innovate, out think, and out sell.

Anyways, enough said this month – I wish both AMD and Intel well – good luck guys – and keep innovating!