re: me thinks you overestimate what Intel can do.
<Lots of good, logical (hopeful) opinions here Chuck. If Intel just stands where they are, this could very well come to pass (20% chance). If Intel responds (or worse, pre-empts) in their usual manner, AMD's foray into this space is doomed (80% chance).---RJ>
I do not think the issue is Intel standing where they are. Intel can run as fast as they can but will not be able to keep up with K7 - this is fundamental CPU design issue (assuming decent execution from AMD of course). I know a lot of people at Intel from engineer level to VP level and a good chunk of them will give AMD better odds of keeping performance crown than you do (however, most of them believe Intel will outmarket AMD). I would say the chances are 80/20 in AMD's favor. Clearly, one of us is hopeful!
<If K7 has a performance advantage today, it is not that clear, and by the time OEMs think of offering K7 business SKUs, will there be one at all?-RJ>
I am not sure where the performance advantage "is not that clear". Can you to show me a benchmark which shows that K7 does not have a clear performance advantage over PIII?
<---Very true, but in my experience, those people don't thrive in F1000. Corporate IT is much more conservative and tries to drive in the middle of the road as much as possible. Apple has been essentially purged from the corporate desktop, Netscape is essentially on life support, AMD nonexistent. Linux on the other hand is getting some good looks, especially in the web server space, not in the backoffice/LoB apps. This is because of Microsoft's eternal delays on Win2000. AMD has a better chance of eating in the small business space as long as the 800lb gorilla doesn't go looking for bananas there---RJ>
All AMD needs to do for the next few quarters is be able to sell a few million K7s. Small business is a good starting point.
<---On this one I disagree wholeheartedly. Qual and platform issues are large in most companies. They are expensive, time consuming and a large irritant to IT - .....>
I do not believe this is going to be an insurmountable obstacle for AMD so I guess we will have to agree to disagree on that one.
<---Again, an order of magnitude more difficult to crack than the corporate desktop. Lots more time, lots more money in validation, etc. Why would IT buy one of these if they already have multiple safe choices from Intel, not to mention Sun, HP, etc. I'm hard pressed to believe that K7 will have a performance advantage over Cascades or especially Merced/Foster by the time this becomes an issue.---RJ>
There is a fallacy in the above argument that I see and it is often perpetuated by Intel - Lumping Intel, HP, Sun in the same bucket doesn't cut mustard. It is more like Compaq, HP, Sun, Dell. If Compaq uses Athlon, customers will buy. Those customers who resist will be offered Intel alternatives. The last 6 months has clearly shown that there is little loyalty for Intel brand in consumer and portable space. AMD got a high market share of this market in a short time. (they lost part of it because of the inability to ramp speed grades but that is a different story).
<Finally, can AMD sell several million K7's by Q1/Q2 of '00? I believe they can make them, I'm just not convinced they can sell them. If everything goes perfectly for them technically, they still have to get past the somewhat predictable response they are going to get from the 800lb gorilla that will protect its bananas.---RJ >
There is no question that there is execution risk here. Otherwise, the stock wouldn't be trading at the current levels, would it? Nonetheless, me thinks you overestimate what Intel can do. Intel will have no new processor core for another year to compete with K7 and until it gets one Intel is SOL. To coin a new phrase - "this gorilla has no bananas".
Chuck
---I don't think I overestimate Intel's ability to execute. They have certainly proven fallible in the past. I don't think that I am underestimating AMD's ability to execute either, although history sure gives me reason to. It really boils down to the marketing and brand thing. That goes much further than the technical details of Pentium III vs K7 - IT doesn't care. The Intel brand in the consumer/retail arena is not that strong, true - Joe 6-pack doesn't care about the technical details, if one 400MhZ computer costs less than another, what the heck... However, I believe that the Intel brand is VERY strong in business, especially in servers. Just because Compaq offers K7 servers, it does not follow that customers will buy them. What's the compelling reason to change? Because Compaq says so? Price won't do it unless it's 30-50% less, performance won't do it unless it's 30-50% more (system level), reliability/availability won't do it until it's proven to be as good or better. If Compaq tries to push too hard, the customers will just show them the door and call Dell. They got burned pretty good on the K5 desktops a few years ago. I saw it happen. Compaq lost credibility in customers' eyes. Was it a coincidence that Dell started gaining market share in corporate about that time? Maybe. Dell is still gaining market share in desktops, and now servers as well. I'm sure Compaq will be pretty careful about putting their hand in the fire again.
I guess we agree to disagree on most of this stuff. We've worn this one out. Cool. Truce. Good luck. Next topic...
Rick |
