Dell and AMD--Together at Last

In a surprise move, Dell today announced it will use Opteron processors from AMD in its high-end, multiprocessor servers by the end of the year.

The announcement made Piper Jaffray's Les Santiago look pretty good. The analyst predicted in an January 2006 report that based partly "on conversations with our sources in the PC supply chain" he expected Opteron servers bearing Dell's brand to appear as early as the second half of 2006.

However, in February 2006, after months of public flirtation with AMD, Kevin Rollins, Dell's chief executive officer reversed course, telling financial analysts that Dell didn't expect to offer servers or PCs based on AMD's chips in the near future.

Whoops!

Until that time, Rollins had steadily dropped hints that Dell might consider adding servers based on AMD's Opteron processor to its product lineup, which is currently based exclusively on Intel's Xeon and Itanium 2 processors.

Dell today also announced disappointing earnings for its fiscal first-quarter 2007. Until now, Dell has only used chips from AMD rival Intel in its hardware.

After cutting prices on its PCs in an attempt to regain market share from competitor Hewlett-Packard Co., Dell Thursday reported net income of $762 million for its fiscal first-quarter 2007, falling short of its $934 million profit for that same quarter last year.

Dell had warned last week that it would miss its original forecast of $0.36 to $0.38 per share, on revenue of $14.2 billion to $14.6 billion.

Dell said it drew profit from increased sales of servers, storage and foreign markets. Compared to this quarter last year, the company's sales outside the U.S. grew 12 percent, generating 44 percent of Dell's overall revenue.

PCW's editor in chief has some thoughts on today's announcment.

And thanks to IDG News Service for today's info on the Dell announcement.

Comments

too too bad for dell on the long run.If it has to sell overfseas brandname helps and losing Intel will plunge dell further into a losing trend.In Asia,esp,Intel is a household name.Poor decisions.It would have been better if Intel and Dell worked on something together than this senseless decision

walter scott

May 18, 2006

5:35 PM PT

Nice for Dell to follow the more economical and even powerful option and ignore the "household name opinions." People are not as tech ignorant as they used to be. AOL bundles don't sale anymore...hmmm Why is that? People know what ram is and they like 64 bit duel core processors.

Brian NeedsWork 8)

May 18, 2006

6:31 PM PT

I'm not certain about Walter's description on Asia. AMD has enjoyed a very broad following, and some of it's best customers are Asian based. This is a good move by Dell, but a bigger win for AMD! And for those of us sick of the Dell desktop (is "slow" a good enough description?), we hungrily await the Dell AMD desktop series!

Brian

May 18, 2006

10:53 PM PT

Amen to the Brians! It has been too long. One would think with both centrally located in Austin (allergy and tech capital of TX) they would have joined forces long ago. I worked for Dell 2000-2002 and in that time frame I would get at least one tech call a week with a customer asking, "AMD processors would be great do the plan to add them?? I am overjoyed they finally changed policy and are seeking to give customers what they are asking for. Intel has basked in the limelight for too long on expensive, slow processors.

Pam

May 19, 2006

2:00 PM PT

I remember laughing at a really arrogant friend who got a top end $3000.00, 500MHz Dell trying to out do me after I purchased a 450MHz AMD K6-III processor almost a decade ago. He watched in amazement as my system whooped his systems butt at every test we threw at it. I then explained to him how the system had 2MB of L3 cache as well as the additional L1 and L2 internal on die caches. He just looked like dumb found him. After Intel?s Pentium the K6 was AMDs first processor to catch up and surpass them clock for clock or price per MHz. AMD?s K6-III was so good that many who used it with 1 or 2MB L3 cache motherboards regarded it as the fastest home pc processor one could buy for a long time and I agree. For office applications i can honestly say that nothing Intel or AMD had could touch it till about 800 MHz. That?s not bad for a processor that was only running at 450Mhz. anyway we live in a world now where being dumb is just no longer cool. It?s too easy to check facts out nowadays. Just being named Dell or Intel is not cutting it anymore just like just being named Porsche or BMW doesn?t. For you superficial people anybody can look at the numbers to see what you really got and in the end it?s your bed to lay in, bedbugs and all. 4 me frankly I could care less who?s mane is on something it?s the Numbers that rule 

bronx

May 20, 2006

3:07 PM PT

i so happy dell finally got the message to add AMD processors

Anonymous

May 20, 2006

6:39 PM PT