AMD Puma: Loving The Code Name, Liking The Concept

I wrote this article for the latest issue of CPU Magazine. Check it out online over here...!

AMD has finally taken the covers off a platform that could yield the benefits that many of us were expecting from the company’s acquisition of ATI. There has been some hype around the Internet about AMD Puma, aka Turion Ultra. Many people are calling it a Centrino Killer, and I’m doing my best to strip away all the marketing fluff while determining the market this platform will appeal to.

So, let’s see. AMD has not been known of late for making ultra-efficient CPUs like Intel, and the Turion Ultra CPU has not changed much from the previous generation. Yes, the new Turion Ultra processors feature 2MB of cache as opposed to 1MB, but the TDP has not decreased; I believe we’re still looking at 32- to 35-watt processors.

Take it from someone who knows notebook design; when you’re trying to cool a high-density processor with 2MB of cache, it does not make things easy. In fact, it makes our lives downright difficult when you include a discrete GPU, as well. (But what if we didn’t have to worry about a high-powered GPU? More on that in a moment.)

So, while Intel is toying with 12 to 20W processors in the ultraportable category, AMD is still back in 2005 with its 35W part. AMD has also introduced some new battery-saving elements into the platform, but as far as I’m concerned, the best and only way to save battery is to use more efficient components.

On the graphics side, it’s a very different story. AMD-ATI has always been known for creating unique mobile platforms with great image quality. Though it has faced fierce competition from Nvidia, thanks to MXM and some of the previous-generation GPUs, things are starting to change. In the mobile battle, I would say that AMD has some slight advantages for the moment.

Nvidia chose a strategic direction that sort of put it at odds with Intel—and Nvidia was quite open about this at CES—but as history has shown, these relationships can usually be rebuilt overnight.

Oddly enough, AMD seems to be Intel’s preferred partner for discrete graphics, at least until Intel gets its own graphics off the ground.

ATI has the distinct advantage of being integrated with a CPU company, therefore it can work with AMD’s CPU people to create unique platforms in volume. So, one could say that they are the preferred partner of AMD, too.

AMD’s latest Radeon HD 3000 and HD 4000 chipsets have given us compelling reasons to use the company’s graphics in current and future platforms. Seriously, in case you haven’t seen these things, everything has changed, from image quality to feature set and software.

AMD has nothing to lose; following the acquisition of ATI, it lost market share and was simply out-executed by Intel, and had no choice but to focus on its long-term plan. It seems to be paying off.

So now you have a so-so CPU coupled with a killer IGP, thanks to the graphics side of the house. What does that mean in terms of platform development?

On the ultraportable side, Intel wins hands-down. On the enthusiast side, I’d have to give it to Intel, as well, when coupled with discrete graphics from either AMD or Nvidia. You won’t see any bleeding-edge thin-and-light designs with Puma inside, but you might see some killer budget notebooks taking the sub-$1,000 market by storm. This should not be taken lightly; it’s the bulk of the overall notebook market and is growing at an astonishing rate.

So, while Puma may not deliver the ultimate in battery life or cutting-edge design, if AMD can deliver on its promise, the platform will crush the competition in the area of price/performance. The bottom line is Puma is a cool platform with great new possibilities.

You gotta love competition. I have to wonder if Intel will cut its prices in half just to make it hard to switch over. I also have to wonder whether AMD can execute in volume; I guess we’ll have to wait and see.

AMD Breakup

I wrote this article for the latest issue of CPU Magazine, it's about AMD's next steps. I have written about this before, talked about what I would do if I was them -- and now I'm just exploring this a bit further.

AMD is at a major crossroads, the big question is what’s next for them?

In 2006 when AMD started to crack into the mainstream they broke into one of the biggest OEM accounts that very few people expected them to get. I was convinced it would happen, so sure that I made one of the dumbest bets ever (it has gone down in our PR history as one of the best moves ever). I did end up winning the bet, but in the meantime there were a few moves that AMD made that I still question to this day.

For example, at the time AMD had a very compelling offering. Their prices were competitive, they had a much more efficient processor than the competition, and everyone wanted to work with them. So why is it that they opened up the floodgates and all but killed their channel business during one of the most insane expansions ever? I never did quite get it – the channel was dry of AMD parts, high margin parts to boot. In the meantime AMD was busy ramping up low margin (or negative margin?) business with one of the world’s largest OEMs.

When AMD announced that they were buying ATI I was quite bullish about their future prospects. Not only could they position themselves uniquely from the competition, but they could potentially create new products which would be heavily differentiated in the market. Buying ATI and implementing their vision of Fusion would essentially give us a fresh unique way of designing new innovative platforms. Personally I was hoping that this deal would happen much sooner than it did – but for one reason or another it happened very late. Better late than never, I suppose, but there are still many challenges ahead for these guys. For one, Fusion is still a dream – perhaps a wet dream for those who like to think about the future of technology, but a dream nonetheless.

So now what’s up? You have a giant company, completely undervalued from a market capitalization vs. technology standpoint. They have excess capacity, and they are hemorrhaging money. The biggest reason for their dismal valuation is their excess foundry capacity. So how can they possibly fix this?

One of my good friends at AMD always says “We’ve been here before, we were always the underdog, and we’ll come back again…” – and while much of this may be the case, I would disagree that they have been here before. You see, AMD was once an incumbent, a tiny company trying to be relevant. For years they tried to position themselves as a viable alternative to Intel, and while it took almost forever they succeeded. They broke into the largest OEMs, and they are now considered a viable alternative.

Their trouble now is they have successfully commoditized themselves in the process. They went from being Gordon Ramsay to Ronald *@#ing McDonald.

So now their challenge is they are competing head to head against a giant in a battle that they cannot win. They cannot win the commodity battle, they certainly cannot win the process or volume battle, and for them to try to sell three cores for the price of two at the cost of four is insane!

I have suggested this one before, but I think it’s more likely now than before. AMD should really split the business. No, they should not break off ATI; rather they should split their business into a foundry and a fables semi-conductor. This isn’t as easy as saying “okay let’s split” – it would require some serious partnerships, agreements would have to be modified, creative accounting, and their X86 contract would need to be tweaked. More important they would have to find someone who wants to invest in the foundry business.

Finding a savvy investor to invest in a foundry would be like asking Gordon Ramsay if he could dress up as Ronald McDonald and take over McDonald’s kitchen. It is just not an easy problem to solve. There are limited companies and/or people who would be interested in such a thing.

Then again, AMD could partner with Charter Semi, maybe TSMC, or IBM perhaps, who knows.

Splitting AMD would create a fab-less semi-conductor with huge value to Nvidia, or perhaps someone else. We have all seen Jen-Hsun Huang attack Intel openly at what seems to be the most inopportune for Nvidia…maybe this is just some foreshadowing.

Whatever it is, there will be change and we’ll be ready.

Bravo to ATI!

Since the launch of Blackbird, we have received numerous awards from many publications on our system. We shipped a mix of review systems, launching with ATI Crossfire, and some with Nvidia SLI graphics.

Some of the ATI reviews went to publications that were very critical of our video card choice. Needless to say these publications were focused on frame rates on very specific scripted benchmarks and narrowed their scope to the graphic subsystem rather than the overall system experience.

Our goal with using ATI on some of these review machines was to show the overall flexibility of the Blackbird platform, and while our competitors choose to limit choices we wanted to keep our customers' options open. So we created machines like the Alpha Configuration and went to market with it.

In the meantime we were seeing a push for 3 and 4 GPUs in the high end PC, and we were still concentrating on making the Vista gaming experience better. Re-read the article on time to market vs stability and you’ll see some of the things I’m speaking about.

Well, I mentioned in that article that Windows Vista Service Pack 1 was released, and shortly after ATI released a hot-fix for their Catalyst driver. Since then I’ve been playing a number of games, and I honestly cannot believe what I’m seeing.

Yes, I can't believe my eyes... It's like I'm dreaming, but I'm just not 100% sure a pinch will change anything. For the last few weeks I have not had ONE driver drop in Vista with ATI Crossfire….all of the games I had the error with are running much better.

This should be a lesson to everyone: ATI is doing great things on the graphics side right now. Frame rates are NOT the most important thing --- the most important factor in gaming is stability and visual quality. If you can buy an PC with optimized graphics for the display resolution that you are running (in my case 2560x1600) then you’ll be a much happier person, believe me.

So cheers to ATI, you graphic ninjas, for getting it right. The fact that I didn't have to replace my hardware to overcome the issue speaks volumes. I still need to go back and re-evaluate Nvidia - but we would love to hear from anyone out there with Vista and driver drop issues - please seed this message to all the forums that you think could provide input. We need as much information as possible to proceed.

Rapid Time to Market ... or Reliability?

Sorry for the lack of updates, I have been away on a number of trips. One of the trips I went on was not work related. I went with a bunch of friends from all over the world to Ensenada to do a Wide Open Baja tour. If anyone hasn't done this I would highly recommend it - it was a memorable trip - completely awesome, and I'll certainly to it again. Check it out at wideopenbaja.com.

I wrote this next article for print this month - it's probably going to raise a few eyebrows, but to be perfectly frank, I'm tired of people asking me why we haven't launched the latest and greatest video card while our competitors have. There is a damn good reason for everything.. read on, and feel free to comment.

When the concept of high-performance PCs came about in the early ’90s, very few people expected this once geek-only hobby would explode into something greater. We watched as new revolutionary hardware manufacturers like 3dfx turned 2D into live 3D. Even though they used our name (and I’m still bitter about it), we loved the new direction the industry took.

At that time, Intel and others balked at the notion that anyone would want a graphics card that did little more than spit a 2D image onto your 14-inch VGA display.

Both Nvidia and ATI drove the hardware to new levels, thereby freeing game developers and 3D content creators to dream about solutions they wanted to create rather than hardware limitations and “imagination ceilings.” AMD was a major grassroots supporter of performance gaming; the company had a dedicated staff of people who would ensure that companies like mine had access to the latest and greatest hardware.

Better late than never, Intel arrived on the scene with its edgy advertising and “street teams” who would spend most of their time trying to build bridges with the performance PC manufacturers in order to build the halo effect that AMD was already enjoying.

Back in the day, when your application didn’t work, you would either download a patch or wait for Nvidia or ATI to drop a new driver; our partners would acknowledge pressing issues and fix them quickly.

Those were the days when we hand-built PCs, and we could usually get everything working with just a few challenges. Hardware manufacturers would sell us hardware that worked for the most part, and when it didn’t work, they would acknowledge the problem and let us know they were working on a fix.

So what’s new?

Since Microsoft launched Vista, it seems like things have changed for the worse. Even the latest service pack, albeit an improvement, doesn’t fix all the bugs we run into. While we continue to struggle with these issues, we’re finding that leading in “time to market” with the latest hardware is more of a detriment to our customers than a benefit.

In other words, we aren't launching all the cutting-edge stuff because it's all coming too quickly, when everyone knows there are still considerable issues that need to be dealt with. Hardware manufacturers are getting way ahead of themselves. They’re trying to ramrod more GPU power, huge power supply requirements, and larger memory requirements into a PC that still has core issues.

Take, for instance, memory requirements. Anyone who’s in the know should realize that more video cards equals less addressable memory for the OS. One solution would be to install Vista 64 so a system can easily address more than 4GB of memory, but of course not everyone is ready with Vista 64 drivers, and so it goes.

When you play games with more than two video cards, your chances of “dropping the driver” in Vista increase exponentially. In other words, you might successfully play for two minutes or five hours, depending on the mood of your system.

For the sake of winning benchmarks, we’re witnessing many computer companies jam hardware that they know doesn’t work into their review machines. The reviewers run scripted benchmarks and they don’t spend the time actually testing the system beyond the surface.

Recently, one of our partners requested a quote for a press release on a new solution, and I had to decline. Whether it’s a hardware or software problem, why would we publically support a solution that we know is plagued with problems?

Although ATI has a unique way of dealing with the issue by disguising the error from the customer, it’s time that Microsoft, AMD (ATI), and Nvidia host a summit with their top engineers and gets these problems fixed.

It’s also time we dump 32-bit OSes: They simply do not meet the latest hardware needs.

Not all is doom and gloom, though—ATI just dropped a hotfix, and so far it looks to be going in the right direction.

Now that we’ve made our position clear to our partners (no more “time to market” until a solution is tight), they’re listening and actively working on the problems. (or at least we hope they are) You can thank us later. . . ;-)

First it was four, then it was three… could it be two?

I wrote this article for Custom PC Magazine in the U.K. - it's the latest issue, and it's awesome. A warning though, this article is pure speculation! There's my disclaimer before people start freaking out - this is pure "hookah smoking, sitting around with a bunch of friends and chatting" speculation...! I will write an extended version of this later.

A few months ago I wrote an article on some of my own personal thoughts about AMD’s strategic position in the market. I included some ideas around AMD potentially creating strategic partnerships with companies whose pieces fit snugly in their holes (can you guess who?). In the process of doing this they would also need to lighten up some of the assets, and scale the business back enough so profitable growth can be sustained.

Its funny how things seem to make sense when you’re involved in a business for more half your life. If you put all the pieces on the board and stare at them long enough they start to tell a story.

Going further into the potential strategies for AMD, I think they could try to spin of their CPU, chipset, and graphics technology businesses into a separate entity. At the same time they could spin the foundry business into a separate entity or division. I continue to believe that somehow they would need to be linked in order to maintain their X86 license among other things.

Now imagine if they did both of the above; their value on the foundry side would be cut, but on the technology side they may get some great valuations with higher multiples, and thus the IP side would become a great target for acquisition for Nvidia.

Now the question is who in their right mind would want to own shares in a foundry business? Perhaps they could work a deal so existing shareholders get a share of one and half of another, and perhaps if Nvidia decides to come out and play they could also offer some share benefits to existing shareholders.

In my mind it would be easier dealing with two or four giants, then the three header four armed abomination we’re currently contending with. It’s just too bloody confusing.

All Aboard The AMD Roller Coaster!

Here is an extended version of the article I wrote for print this month - it's about the rise and fall and continuous trials and tribulations of AMD.

What happens when a company grows too quickly? AMD clicked and clacked along a fairly bumpy track for a few years before beginning a sudden, 90-degree climb. The company rose higher and higher, building up speed and picking up passengers on its way to the top of the hill. Then all of a sudden, the now massive green roller coaster crested the towering track it had climbed and plummeted downward to mediocrity at the speed of sound, perhaps accelerating even faster as a large, new group of riders jumped on.

This seems to be the story of AMD in a nutshell, and unfortunately, things are looking somewhat bleak for the moment. Some are quick to defend the chipmaker, pointing out that AMD has seen tough times before, and that’s true. The difference, of course, is that the company is now vastly bigger than it was five or so years ago. AMD has more people and greater manufacturing capacity than at any time in its history, and all the baggage that comes with them. And now, as it fights for survival, the company has also placed great importance on a very expensive legal battle with Intel. In the midst of all of this, it seems as though AMD has all but lost its focus on its core competencies. In the meantime, Intel has grown stronger, nimbler, and more competitive than ever before.

AMD acquired ATI on the way down the roller coaster, or later than would have been ideal. I am still a firm believer that the ATI move was a good one; the vision of Fusion is a compelling one, but it will require laser-focused execution to make that vision a reality.

To make matters worse, AMD took on new and demanding customers who all but forced it to increase manufacturing capacity, only to get caught in a price war with Intel, which caused some shifts in the industry that the company didn’t expect.

AMD may lose key customers in the near future, but maybe that’s a good thing. Some customers are absolute grinders at any cost. They’ll take out the biggest meat grinder in the world and press it hard and long against their suppliers to the point where it could be detrimental to the quality of their own product.

A wise man once shared an old Mexican proverb with me over lunch. He said, “Rahul, when you sup with the devil, use a very long spoon.” It seems AMD may have used a slightly shorter spoon than it should have when making some of its strategic moves and now finds itself involved in some unhealthy relationships that are likely costing more money than the company can afford.

Is the outlook all doom and gloom? Certainly not. I believe AMD can turn it around, but it’s going to take some work. I think it’s time AMD takes a look at articles I wrote about Intel a couple years ago and substitutes “AMD” for “Intel.” In other words, if I were CEO of AMD, here’s what I would say as we began to turn things around.

“It’s time to focus on what we do best; it’s high time we build and nurture key partnerships. Partners and how we structure our partnerships are going to be a key to our success going forward. We should also drop money-losing opportunities, scale back, and reignite the innovation team. We should bring ‘Customer-Centric Innovation’ back to the foreground. Coupled with the right partners, this may actually work to help us turn things around. And don’t worry about what Wall Street says when or if we lose a big account—as we turn things around, the numbers won’t lie. It’s time to go back and figure things out; we don’t have much time to mess around. It’s time to heal our wounds, back off from a head-to-head battle, and eventually we’ll be back.”

Of course, all of this is just my opinion, and as usual I wish AMD nothing but the best of luck in the future.

Anyways everyone, good cheers to a fantastic 2007, and on behalf of me and my family, I wish you all a safe and prosperous New Year in 2008!!

I'm starting a new forum - it's time for you to join!

Many of the readers of this blog (and the articles I write for CPU and Custom PC) consist of Wall Street regulars, enthusiasts of technology, start-up owners, and early adopters. The forum we are creating is a great place to share ideas and concepts with like minded individuals such as yourself. I am starting this as a pilot and if it`s successful it will continue.

You may visit this group to discuss anything related to hi-tech companies, to pitch new ideas and technologies, and to learn more about the companies you’re investing in. I imagine it will be slow to start, but hopefully we'll build a new and interesting community. I am hoping to learn about new technologies along the way, you never know what might come out of it. In the meantime please excuse the work in progress, there will be many modifications along the way - especially during the beginning.

I am heading to Dubai and India for about five weeks, so I thought I would launch just before I left. I'll monitor it along the way - and I'll try and appoint some moderators as well.

So you're all welcome to join 328KPH.com Rahul Sood's official Tech Entrepreneur & Investor Forum.

The 3 Headed Abomination...

There are many emails coming in from Intel fans asking why we haven't launched 45 nanometer (based on this post) on HP Blackbird. We're working on it....and if you're a fan of ATI (AMD)Crossfire and Intel chipsets with Intel 45 nanometer you'll probably see more solutions coming out in the future.

Many die hard Nvidians will choose to wait for Nvidia to get their newer nForce chipsets out - which is perfectly cool. Others might wait for newer motherboards, regardless of what they choose with Blackbird you can order a machine with an Nvidia based graphic system now, and you can always perform an upgrade later. It's pretty simple to upgrade - so our recommendation for those who want a system with Nvidia graphics - buy now, upgrade later.

Just to be clear, us not launching 45 nanometer was not a "diss" towards Intel. We love working with them, and quite frankly this chip is the best currently available CPU on the market. If you doubt that, check the HP Blackbird website and show me one AMD based configuration. Right now you won't find any, at least not with current product.

No matter how good a chip is, however, a chip is just a chip - then you need a platform to build around it. So it becomes a situation of balancing performance from various segments of the PC.

Thus you can get great performance from an Intel 45 nm + Intel chipset, but the question is whether or not Nvidia will be able to eke more performance from their chipset. History has shown that they have always owned the enthusiast chipset segment, and if anyone knows how to eke performance - it's Nvidia. ...but Intel's chipsets have always been rock solid (yeah, shut up about Granite Bay please - that was years ago).

Intel is getting very aggressive, and based on what's happened in the last year between these two giants, I don't think the aggression is going to come down anytime soon. I personally believe Intel's latest chipset is very much worthy of an enthusiast class stamp - the question is whether or not you want to be locked down to ATI(AMD)Crossfire graphics going forward (or a single Nvidia graphics card).

I still think that Nvidia should eventually get into the business of making CPU's - or turning the GPU computing initiative into a much bigger movement. Like I said before, maybe they should buy VIA - or continue to watch AMD closely.

What happens when you get three giants who are somewhat dependent on one another, yet they constantly fight with each other?

A 3 headed 4 armed abomination...(like the picture? Google Images rocks!)

This co-op-etition stuff is not an easy thing to monitor. Believe me, my job may be fun, but it's times like this when I wonder if I shouldn't be RV'ing across America with my family.

Decisions Decisions.

Intel 45 Nanometer, what happened to HP?

We haven't launched Intel's 45 Nanometer processor as planned. We, like many, were hoping that it would work flawlessly on certain chipsets - and well, unfortunately it doesn't - not yet anyways. Even though we were getting close to qualifying it - last week we received some really bad news. The bottom line is we're working on a solution for Nvidia SLI, but at the moment there isn't one.

Interestingly enough there are those out there configuring this processor in configurations which we *know* are unstable. I think their customers will be in for major disappointment based on current issues. ..although there are certain configurations which do work, the question is whether they deliver a decent value to the customer.

That said, it's not an issue of Intel's chip reliability, it's an issue of platform stability on certain current non-Intel platforms.

I don't want to get into the details, it's not a pretty situation. There is much confusion surrounding this launch -- it's somewhat unbelievable.

Three-Way Chess, Or All-Out FPS Deathmatch?

This is an extended version of the article I wrote for print this month. It's essentially about the tight love/hate 3 way competition between AMD, Intel, and Nvidia.

Things continue to get even crazier -- Should Nvidia think about buying VIA in order to gain an X86 license? Perhaps they should partner with AMD down the road assuming AMD is able to bring their asset light strategy closer to reality... Will Intel get more aggressive? Will Western Digital get taken out?

Stay tuned, in the coming weeks and months I'll write an even longer list of random thoughts, based on what I believe may happen in the industry. ...and now for the article.

------------------------------------------

Nvidia seems to be hitting on all cylinders lately. Although ATI comes close with its latest GPUs, Nvidia has had a very good year so far and seems to be on the winning side of a major battle for a significant portion of the PC platform business. The company has moved beyond building just GPUs and is working to build an ecosystem of multiple Nvidia components, including a masterpiece version of its awesome nForce chipset.

It’s no secret that I’m a big fan of nForce; just check out the HP Blackbird, which uses an nForce chipset regardless of whether you choose ATI- or Nvidia-based video cards. I like nForce because it’s rock-solid and manages to milk additional performance from PCs in a way that seems to leave Intel and AMD scratching their heads and asking, “How’d they do that?” Of course, this applies strictly to desktops; Intel’s Centrino platform still allows us to deliver the best all-around experience on a notebook.

As impressive as Nvidia’s chipsets have been so far, though, it’s the company’s next big thing that shows it’s not messing around anymore. Nvidia has drawn up a plan to create an integrated graphics chipset and something called “Hybrid SLI,” which on paper looks really tight. Imagine, if you will, a notebook that allows you to handle everyday tasks such as browsing the Web and checking email using a low-voltage graphics processor that also doubles as a northbridge chipset.

The cool thing about Hybrid SLI is it lets you toss in an additional graphics card that in SLI will work in conjunction with the integrated chipset, yielding some pretty compelling 3D performance. If you decide you want to go even further, you can toss in another MXM chip and disable the integrated chipset for maximum enthusiast SLI performance.

What I like best about this idea is it lets the system save power (and, for notebooks, battery life) when using basic 2D apps and then reactivate the discrete GPU or GPUs when you’re playing a game. It also lets us dream up new ways to actively cool a PC via various grades of cooling, depending on what you’re doing. This type of thinking enables companies like ours to create compelling solutions for our customers, and I commend Nvidia for thinking about new ways to deliver a compelling platform with some flexibility.

The interesting thing about all of this is it seems like Nvidia is taking a shot right across Intel’s bow. I think it’s pretty clear that Nvidia wants to grab a share of a very lucrative space that Intel currently owns—the Centrino platform market. Even more interesting is the fact that Nvidia pulled SLI support from Intel (and competing) chipsets. The company is obviously on a mission to be more than a graphics provider, and it’s taking no prisoners. Nothing seems to phase it, except for what happened in the last couple of weeks, perhaps.

Intel bought Havok, a company that both ATI and Nvidia have been touting as the ultimate physics solution. The same company that both ATI and Nvidia have somewhat depended on to deliver more immersive gaming experiences.

That in itself is a statement, wouldn’t you say?

I mean, what other reason would Intel have to acquire Havok? I’m sure there’s more than one, right? Take a minute to list them off and email me, would you?

Whatever Intel’s reasons are, the three-way chess match is about to turn into a multiplayer FPS deathmatch. You’ll soon see other technologies introduced in the “platform” space, and companies that you would least expect will start to toss their hats into the ring.

Solid-state disk tech, for example, is something that we can all see in our crystal ball as the future of mass storage technology. SSDs will allow for faster boot times, smaller form factors, lower power consumption, and ultimately better reliability. The intriguing thing about solid-state is you don’t have to be Seagate, Western Digital, or Hitachi to be an SSD player. You don’t need spinning disks . . .

Very interesting, if I do say so myself, and, um . . . I just did.

Intel's Third Nipple...

This article is an extended version of the one written for the latest issue of Custom PC Magazine in the U.K.

When Intel launched Viiv I recall the confusion it provided PC OEMs, System Builders, and Channel partners alike. Like a third nipple no one really understood the value of Viiv or what it was meant to add to the customer experience. If you ask me, Viiv was developed by marketing people to sell more Intel components – for no good reason. I even remember having a discussion with a CEO of another OEM about Viiv and we were laughing at how confusing it was. Although Intel would like to see differently, Viiv is/was a total failure, and in no way should be compared to Centrino.

It seems as if Centrino was developed by engineers in order to improve the experience of owning a notebook – and, luckily for Intel, it somehow got backed into a marketing strategy with a platform name.

Intel Centrino made sense because there was significant value add for the customer – although such value-add is starting to get lost in the shuffle of competition. Thus the difference between Viiv and Centrino is one offers actual benefit to the consumer while the other is just a sales pitch – and a seemingly useless one at that.

Equally disappointing as Viiv was AMD’s attempt to create their own Viiv, calling it LIVE! AMD claims to have developed LIVE! well before Viiv, regardless of when it was developed they still didn't do a good job of communicating what it meant to the consumer. Some at AMD believe that Live! positioned directly against Viiv actually helped AMD in retail. Although AMD has some interesting software offerings with Live! Regardless, I personally think both are crap implementations of pretty much nothing. Remember, this is just my opinion :)

In the ideal world no one should care what sticker is on the outside of the “box” as it pertains to processors. My mom could care less if she had an Intel processor with Viiv or an AMD processor with LIVE! She just wants a computer that’s easy to use. She wants to get on the internet, check her email, play a few games, and use MSN messenger.

As an enthusiast, I don’t care what sticker is on the outside (other than my brand of course) – in fact, we refuse to put AMD, Microsoft, Intel, or Nvidia stickers on the outside of our gaming systems. It’s not about them, and that’s the way it should be. It’s SHOULD be about you, the customer, and nothing more – right? ...In an ideal world perhaps.

...time for a rant.

This goes for Nvidia and ATI video cards – assuming the performance is similar, as long as your machine delivers the best possible experience for your particular application does it really matter which chip is in the machine? I think not. Every time someone from Nvidia sells us on the benefits of SLI over Crossfire, I feel like telling them “tell that to those customers who purchased QUAD SLI and can’t get it to work with Vista...!”

Nvidia Vista drivers are getting better (though not nearly perfect – I still can’t fly a plane from Calgary to Seattle in MS Flight Simulator X without my SLI based system barfing in Vista). Yes, perhaps their drivers for their 8800 series are getting better - but Nvidia still needs to go back and fix the thousand dollar graphics packages that they sold last year - and fast! Customers who spent $1,000 on a dual graphics configuration are asked to disable one in order to run many games – which effectively means they spent $500 on a heat generator that draws power. Though I have experienced issues with ATI, it’s just not nearly as bad. Perhaps it's time for people to stop blaming Microsoft for all of their problems and start fixing them.

Here’s hoping for a future where AMD, Nvidia, Intel and others start focussing on platforms that add value to the customer experience, rather than their bottom line, so we can build systems that make sense.

Nvidia's Quest to become a Platform Company

“Keep your friends close and your enemies closer” - Sun Tzu

For years the competitive landscape between the major PC semiconductor companies was quite predictable. NVIDIA was in a somewhat of a horse race with ATI -- a horse race where the winner was the one who didn’t break a leg. The way I saw it, NVIDIA was always responsible for either winning or losing the race. In other words, ATI kept “plugging away,” and whenever NVIDIA “broke a leg” ATI would catch up -- and at least once they passed NVIDIA for a brief period.

Not taking away anything from ATI, but the bottom line is if it weren’t for NVIDIA, gaming would have been boring – NVIDIA pushed the industry to dream bigger.

If I remember correctly there were two major screw-ups in NVIDIA's history. I’m sure there were more here and there, but the significant ones affected the enthusiast space, but that’s pretty phenomenal, and it proves that NVIDIA is very much in control of their destiny. NVIDIA's software drivers were always better than ATI, and their overall execution was usually really good. NVIDIA worked their way into the mainstream by almost always consistently winning on the high end.

ATI, on the other hand, understood power management better, and its notebook platforms were typically more efficient than Nvidia’s. ATI was a much larger company at one point, and their mainstream business was absolutely huge. ATI’s Vista drivers are the best, no question about it, and now that they’re a part of AMD maybe they can start to focus on total platform solutions. AMD has some challenges swallowing the big red pill, but I think the pill is almost swallowed. A few rough patches ahead perhaps, but eventually they will get their legs and come back.

Both NVIDIA and AMD have strengths, but there’s no question that NVIDIA is good at almost everything it touches. Pre-acquisition both ATI and NVIDIA held at least one thing in common – more notably how they leveraged their relationships with AMD and Intel in order to build their businesses. In other words, partnering was fundamentally important for both ATI and NVIDIA in order to be successful.

ATI was/is a pleasure to work with, they understand partnering – and the company understands when to sit back and “listen” to its partners. NVIDIA sometimes takes a more aggressive/strategic approach to partnering, which can be really good ... and sometimes not so good.

Well, the industry has shaken to the core, and the competitive landscape is completely different this year thanks to some very strategic chess playing. Instead of four players in a “doubles tennis match,” it’s now a 3 way chess match. Yes, it’s somewhat odd. It’s hard for me to put to words what’s actually happening to be honest because there are way too many dynamics.

As many of you know, NVIDIA recently decided that they will no longer provide SLI support on Intel chipsets – I wrote a brief article on it over here. This move has profound effects on our space, especially in notebooks. Since NVIDIA flipped Intel the bird, things have been getting somewhat interesting, but somewhat confusing at the same time. AMD, like Intel, has the ability to design total platforms in house. AMD’s strength over Intel is graphics – although I wouldn’t count Intel out of the graphics race.

In the meantime, NVIDIA wants to continue to do graphics but it looks like it has Intel’s Centrino in the crosshairs. It looks to me like NVIDIA wants to beat Intel at its game and become a platform solutions provider rather than just a graphics vendor. This move causes a fundamental shift in the industry, and positions NVIDIA as the official third major island in the highly competitive “platform” space.

The obvious response to this is SLI represents a tiny portion of the market, especially in notebooks – so how is this “profound”? I am quite certain this is only a start, and there will be more changes as the year progresses. NVIDIA management knows they have something special, and they also realize in order to grow their business they need to increase their scope.

Whether or not NVIDIA wants to beat Intel at the Centrino game, they certainly want to keep AMD in check. Not only do all three companies compete against one another, but they partner with each other as well.

On a similar note, I think it is risky going head to head against a giant like Intel, and it could prove extremely rewarding or somewhat disastrous for NVIDIA.

Sun Tzu also said, “The skillful employer of men will employ the wise man, the brave man, the covetous man, and the stupid man.” I hear Intel is hiring in the graphics department – which man are you?

Nvidia gives Intel the finger...

"We cannot enter into alliances until we are acquainted with the designs of our neighbors. "
- Sun Tzu

We are here in Taipei during Computex, I’ve been here since Saturday enjoying the rain and sweltering heat. It’s like hell in a shower and I need a glass of ice water. I would have to say this is the most productive Computex ever and I have yet to set foot on the show floor. In the meantime I’m waking up at all hours of the morning and like a schmuck I’m working instead of sleeping.

So it’s time for a story on Nvidia – they continue to do well in spite of their driver issues with Vista. People love their chipsets on the desktop side, and they continue to improve on the notebook side. Of course they are still doing very well in the graphics space, and they won the PR war for the last year. As they improve Nvidia realizes that they want to become less of a “graphics only” company and more of a “platform company”.

Based on what’s happening on the competitive landscape it would seem that Nvidia didn’t have much of a choice but to focus all their future SLI resources on nForce platforms. That means, no other competing chipset will support SLI – and Nvidia may no longer provide “bridge chips” to make it happen.

Some might say this is aggressive “world dominating” behaviour, but if you look at it from Nvidia’s point of view it makes business sense. Nvidia has something that people want – nForce is pretty awesome.

It’s so awesome that last year Nvidia almost took on too much, they spread themselves somewhat thin and in the process they did a poor job of executing effectively with Windows Vista. The good thing is they realize this and I believe they have decided it’s important to have laser focus on their own branded platforms. If you were Jen-Hsun what would you do if two giants were bearing down on you?

Nvidia has always held a dominant position in the enthusiast space with their nForce platform, but they like everyone else have had somewhat of a tough time penetrating Intel’s dominance on Centrino/notebooks.

Well, no longer the case, Nvidia is using SLI, among other very cool very innovative features as their deck of trump cards.

The landscape has changed immensely this year – more consolidation has made them the third giant in the industry. They need to protect what makes them strong, and they don’t want to pimp graphics all day long. Nvidia wants to sell entire platforms while remaining completely agnostic on CPU choices.

It sounds like a good business model to me, and in my mind they aren’t “limiting choice” because we could still choose AMD graphics as a partner if we wanted.

So is Nvidia really giving people “the finger”? No. I think they have a valid explanation as to why they need to pursue this path. Do I agree with it? That’s a tough question, I guess time will tell - Nvidia may find out sooner than you will whether we agree with it or not.

The chess board keeps changing, no doubt about it. I wonder if Intel will try to buy Nvidia now... That could be expensive. Nope, not gonna happen.

...but whether AMD or Nvidia like it or not Intel will likely be the third major graphics vendor in less than two years.

small print: I did not break this story, the head of PR for Nvidia has been seeding it around, and I didn't click publish until someone else posted it.

AMD’s Asymmetrical War

Here is an extended version of the latest article I wrote for Custom PC Magazine. It’s an eye opening story mostly directed at people inside and close to AMD. Let me start by saying that I have always been a fan of AMD because of their committment to innovation. This article may come off as brutal, but I hope they take it for what it's worth. I am concerned because I love the company, and I have many friends there -- and I don't claim to have all the answers. Hopefully this will be a wake up call to those who are abrasive to change.

Since AMD landed the big deal with Dell their performance has left much to be desired. Their stock is trading below the 52 week low, their numbers are below expectations, they just swallowed ATI along with some mega debt, and they misfired on their new video card launch. The price war between Intel and AMD is eating away at their margins, and I am guessing that they lost some market share in the high end. In fact, things are so bad that AMD’s market cap is near 7 billion (I think?). What a mess.

No doubt AMD has seen better days, much better days. I feel for them because I really believe in their story. I believe that the concept of Fusion has potential – though at this point it is merely a concept. Wouldn’t it be nice to be able to jam the power of three chips into one on a mobile product? The potential is huge; the vision is compelling, now it’s just a matter of the execution.

If AMD didn’t have enough problems ATI had many of their own, and trying to mash to two together is no easy task. As Michael Brown from FEMA once put it during the aftermath of Katrina, “…just ask Karla from IBM how hard it was to merge IBM with Compaq.” -- Yeah he actually said that…just a little comic relief for you.

In any case the optimists at AMD will tell you that they are not running the one hundred meter dash - it’s the Tour de France, and they have only reached the first mountain stage - they still have a heck of a long way to go. Others may tell you that they are running out of ideas.

If I didn’t know the management team at AMD I would probably lose all hope for them. Though to some it seems like a company falling apart – I really believe there is light at the end of the tunnel. Perhaps not by choice, the company is retrenching and getting ready for the next big battle. The reality is AMD is no stranger to struggles – they have always been the underdog and even when they were on top they remained the underdog. That’s a pretty profound but true statement.

If you ask me, AMD is preparing to unleash a wrath unlike one they have launched in the past. It won’t happen anytime soon (definitely not), but I can almost envision the urgency in their internal meetings. These guys are pissed off; trust me when I say guys like Henri Richard and Hector Ruiz are NOT satisfied with the stock price at under $14! They certainly don’t need money, but their pride is at stake. Their word and commitment means more to them than all the money in the world (something like that), and they aren’t alone. ...but blah blah blah, this doesn't change anything, the challenge to fix the company is still massive.

AMD is staffed with like minded people stemming from the top – these guys are on a mission, and they just reached phase one. The trouble is its tough being the underdog all the time, and it can be somewhat demoralizing when you’re the underdog and struggling.

This is where loyalty matters – and people with strong stomachs will reap the rewards. Others will jump ship and look for the next easy ride. My point is AMD has faced more adversity than many companies could ever dream of. Sure there are people in the company who are somewhat discouraged, but now is not the time for them to run away.

Being the underdog is in AMD’s culture, it’s their lifeline, and it’s what will make them successful again. Next time they make it on top they must retain an underdog “non-arrogant” culture internally. This is the key to their ongoing success.

It is challenges like this that separates successful people from the rest of the pack. Perhaps I am directing this article to those people who are floating resumes around -- the pressure is on -- now is the time for you to give back to your company and reap the rewards from a turnaround.

The bottom line is lazy people don’t get rich. It’s time to take broad look at the landscape around you and think strategically. It’s time to change the way your people think about sales and innovation. It's time that you focussed on power and thermals and not marketing spin. It’s time that you think way outside the box and get to the core of what “Customer Centric” innovation means. It’s time that you realized competing head to head against a giant isn’t the way to win the battle. ...and it's time to leverage the core competencies within your talented engineering teams and start executing. I would venture to say that you are involved in an asymmetrical war - perhaps getting your people to understand what that means will help.

There are many companies out there that depend on the competition between AMD and Intel to be somewhat healthy. So I guess the point of this article is to point out that AMD will be back - whether someone will acquire them from underneath them is yet to be seen.

On a related note, the sheer velocity that tech stocks go through is absolutely insane. You rarely see such volatility in other industries, but the tech industry is a tough one to pick. That said; if you’re a savvy investor you’re probably raking in big cash in good times and in bad – good for you :)

Just keep in mind that a world without AMD would be a boring place. Without tough competition there would be no innovation. AMD woke Intel up.

Don’t forget to get your subscription to Custom PC Magazine!

ATI Kung Fu better than Nvidia?

Who would have thought that ATI’s Catalyst would yield the best video experience for Microsoft Vista? I must admit I saw it coming – ATI has been working on Vista for some time now, and somehow they managed to trump the competition in a big way.

What I’m saying here is no secret – and I would have written about this sooner, but I wanted to give Nvidia the benefit of the doubt. I’m not one to hide the truth from my customers, and the truth is that ATI’s drivers are ahead of the game, and there’s no real explanation as to how or why Nvidia missed a step… or is there?

Nvidia has been touting the world’s only DX10 compliant solution for Vista. ATI cannot say the same, at least not until their next generation is launched. I suspect that Nvidia has been working feverously trying to release a working DX10 candidate for their 8800 series of cards.

That said, I still don’t have SLI working on my personal machine and I am less than pleased. Today I had my OMEN ripped apart and I decided to choose Crossfire. Normally I would never make such a harsh decision, but after evaluating ATI’s Vista drivers for some time the decision was effortless. I also have an HP 30” display on my desk with a 2560x1600 resolution, so dual graphics is a must to deliver the ultimate gaming experience.

ATI has done a killer job of designing the Catalyst control panel for Vista. It’s a much lighter weight version of Catalyst than what we’re used to. One could probably assume that ATI’s tight support for Vista may have a significant market ripple somewhere down the line – but that’s just a guess.

All that said, I hope Nvidia picks up the pace. The last time Nvidia missed a major step was shortly after the original XBOX was released. They created a new card called the GeForce FX 5800 and it was a total disaster, ATI just skated by as a result. I don’t believe this is a major misstep, but it’s certainly a misstep. Assuming Nvidia prioritized DX10 support over their existing install base of DX9 is a decision that I cannot explain.

So could this flip flop spike a major change in demand? Well, that’s probably a stretch – and I haven’t lost confidence in Nvidia’s ability to deliver a working driver yet. I certainly don't think this is a case of "BADD" - it's more like bad timing.

Then again, I have high hopes for ATI’s next generation R600 – and for the first time in a long time I think ATI should be feared. I’m thinking the R600 might be a monster.

Here are some interesting links from Trentent;

Nvidia driver discussions:
Where are my NVIDIA Drivers for Vista?
TG Daily's Nvidia Opinion

ATI fans rejoice:
ATI's Drivers Rock

...and for a comparison

Rahul's Predictions for 007

It’s been awhile since I have written an industry update so I thought I would end 2006 with some 2007 predictions. Keep in mind; these predictions are simply open predictions based on my own personal hypothesis – nothing is written in stone of course, but as per my usual style I leave my opinions in the open.

Samsung or Hitachi should/will acquire Western Digital: I think Western Digital, being the #2 hard drive manufacturer in the world (maybe a distant number 2, but still number 2) is a prime target for acquisition. I ran the theory by Charlie from the Inquirer sometime early last year and he wrote about it without the complete explaination. Perhaps I will expand on it later - but for now here are a few points;

I think it would benefit Samsung or Hitachi to acquire Western Digital because they could really use the brand penetration that Western Digital has garnered in the enthusiast PC space. I have written before about the “halo effect” that’s driven by the enthusiast community, so there’s no reason to explain the reason for this theory. WD is also doing pretty well in emerging markets and emerging vertical markets. As far as I understand Samsung has a goal to be #2 in the hard drive space by year end 2007 – that said the only way they can do this is to make an acquisition or grow their storage business at an unbelievable rate. By the way, I think Western Digital drives are pretty awesome and even though Seagate owns a ton of I.P. Western Digital keeps coming up with new and innovative ideas. They helped turn a commodity into a “sexy product”. It should also be noted that I own Western Digital stock, although I own it because I believe in it – and this opinion is purely based on my beliefs.

NVIDIA will not be acquired by Intel, but...: Nvidia will work feverishly on a strategy to remain ahead of the curve in the mobile space. It’s unlikely that they will allow Intel to “acquire” them simply because the cultures are like fire and water. I think the *only* way and Intel + Nvidia marriage will work is if Jen-Hsun remains CEO of the entire entity and they do a reverse takeover of Intel. That’s not likely to occur, but if the shareholders of both companies feel it’s a good move then it’s a possibility.

It’s more likely than not that Nvidia will build their own solutions and ultimately there will be three huge companies competing for silicon real estate. Eventually we may even see AMD and Nvidia get even closer - or not. I think it depends on how Intel handles the situation.

AMD will see better days in the future: Intel’s sudden onslaught of technology caught AMD by surprise. There is no way that AMD expected Intel to come across with such aggressive technology so quickly. AMD needs to clean house, make changes soon. They need to get ATI integrated into the machine as quickly as possible. The sooner ATI and AMD “fuse” the sooner they will create new and innovative technologies that everyone needs. Margins will eventually go back up and revenues will be strong – but until then we’ll see AMD margins drop. I don’t think it’s a pretty situation for the short term – and I’m really looking on the horizon for AMD to do something spectacular again.

ATI should really be proud of the Nintendo WII as a marquee product. ...but unfortunately such products don't pay the bills, so ATI needs to aspire to clobber Nvidia one day. I'm optimistic that AMD management will help ATI go down the right path to performance.

Intel will open up on 11 cylinders: It looks like Intel is in the position to open up on 11 of 12 cylinders. Their products will use less power, and they will continue to perform favorably. Short-mid term for Intel looks fabulous - of course the AMD+ATI thing probably has them worried, but leave it to the engineers in Israel to come up with a solution and I think we're in for some more surprises. I think Intel will try to push more "Centrino/Viiv-like" standards to the market, we'll see how that works out for them. I believe they will cut some more heads from the company, and they should take a page out of Mark Hurd's book to become a more sales-driven organization.

Something is happening with Lexmark, what I have no clue: Lexmark is still on the climb. I wrote that I thought they would make a possible acquisition, but damned if I thought it would continue to go on a vertical climb before that happened. Does anyone know what happens when a company climbs too high based on rumours beyond a reasonable value for an acquisition? That’s not a rhetorical question either, if anyone knows please feel free to pipe in.

Dude! You’re getting a real gaming system: Wait and see. Good things take time, and we’re not prepared to launch things overnight. We’re bringing in some serious muscle to leave zero doubt that this acquisition was the best move both companies could ever make in the space.

Nintendo will sell more WII's than they could ever dream of: Try playing Madden on an XBOX 360 at 1080i, then play the same game on a WII at 480. Need I say more? There's clearly no comparison, and Nintendo figured out how to invoke deep emotions from console gamers. This is a category killer. Sony should be afraid, very afraid.

Apple should license OSX: If Microsoft Vista Ultimate is ~$400 and Apple OSX is $40 there is clearly an imbalance here. Wouldn't it be interesting if Apple opened up their OS to a select few manufacturers? I think so.

2007 Special Request: I would like to make a special request to both GPU and CPU semi-conductor companies out there.

Please keep power limitations at the top of your priority list! I can’t believe we’re approaching 1.2 kilowatt power supplies, it’s getting insane. These supplies are drawing as much power as the wall socket can handle. There are management at the top of certain companies that think customers in our space “could care less” about power, and this is not true at all.

Power is a very important consideration for enthusiasts! Noise, reliability, thermals, overclocking, it’s all part of the package. We aren’t interested in loud-ass PCs – and even scarier is when liquid cooling is becoming standard because we are left with little choice! I'm a believer in liquid cooling, in fact at one point I was a significant shareholder of Cool-It technology. I don't believe liquid cooling should be a forced standard -- it should be installed to enhance the overall experience/performance - and not to "cool the shit out of the hardware" because it needs a power station to operate.

That said, it’s likely that liquid cooling will become a necessity in the enthusiast space as long things continue down the current path.

The winner of this battle will be the company who eliminates that trend and continues to go down a lower power path. You’re just going to have to trust me on this. If you can take overall system power down while delivering similar or better performance than your competition at higher power then you’ll be more successful.

That’s my story and I’m sticking to it.

Intel: From Winnie the Pooh to Red Bull

Before I start this article I wanted to clear something up. I have been receiving comments from the same people suggesting that my blog no longer talks about industry trends. This obviously isn’t true, in the last month I have written a few industry articles both on the blog (like here, here, and here) - and in various magazines. I don’t talk about HP anymore than I did Voodoo in the past – although there has been a ton of activity to speak about as of late. ...and you better believe that I’m proud of our accomplishments and I love working for HP.

You’ll no doubt hear more about it as time goes on - so for the people who choose to hide behind an anonymous name and write the same weak comment over and over again, please take the time to actually read the site. :)

Thank you.

Intel from Winnie the Pooh to Red Bull

I wrote my Thanksgiving Day (U.S.) blog over here. It seems like Intel has much to be thankful for as well this year.

If you asked me last year if I thought Intel would turn their product line around in twelve months I would have said it's highly unlikely. To me, Intel’s product line was about as interesting as a cold sore last year.

Granted their upcoming products (Conroe/Kentfield) looked interesting, but I figured they would have a tough time blowing out their existing inventory of Pentium branded processors. I was also very sure (and vocal) that Intel’s most exclusive customer would switch some of their product line to AMD in short order. I was right on that point, as were some others – and Intel continues to lose market share to this day as a result of this sudden unexpected switch.

Last year I was so down on Intel that when the stock hit $30 that I thought there was no upside in sight for at least two years.

Well, it turns out that I underestimated Intel's ability to turn their ship around so quickly. In the past I have commented on our love for their low voltage initiative, their Conroe/Kentfield and mobile processors. I absolutely love the overall platform performance that Intel has been able to deliver to the desktop. I have praised the Intel Israeli team for “carrying the company on their backs” when they were down. …and to this day that same team continues to kick-ass.

I also knew that Intel would need to change the way they did business in order to turn things around. They would have to accept the fact that their market share would drop and they would have to control margins.

What I didn’t expect was their ability to swallow their pride and accept the fact that their competition had beaten them good. I didn’t expect Intel to accept the fact that AMD would win business from their largest customer, but as it turns out it’s probably one of the best things that has happened to Intel and the industry.

It looks like Intel submitted, and that said, I am pretty sure they hit rock bottom. There is no doubt they don’t want to go back there, and it seems as if they are making the transition from Bear to Bull.

The thing that people need to remember is it took AMD over three years of being on top of the performance benchmarks in order for their brand to crack into the mainstream. I don’t think it will take as long for Intel to go from Bear to Bull though – and there is a simple explanation for this: Now that AMD is (almost) widely accepted as a mainstream alternative I think the swings will be quicker, similar to the video card competitions of Nvidia + ATI. AMD doesn’t need to “re-crack” the mainstream. AMD has already accomplished the seemingly impossible, now they just have to continue making solid reliable products.

The only problem I see is the growing price wars and sudden dropping of average selling prices. This could be very unhealthy for both companies. Especially since AMD has a giant red pill to swallow - and Intel may lose enough market share to force them to keep margins strong. Regardless I hope both companies can re-strategize quickly and prepare for the long haul.

It will be interesting to see how the swings play out over the next few years. I don't claim to be a master of finance, but the way things are going I'd say Intel is probably a screaming deal right now. Although AMD is in a very unique position because they can take advanta