Regarding your answer to Dell's infrastructure..
LOL!! Do you think that Dell maintains seperate operations for the notebooks from Quanta vs. Compal? Disk drives from WD vs. Hitachi? Motherboards from Intel vs. Asus? They're parts - anybody can buy them and anybody can assemble them into systems.
Clearly, you don't understand the difference here. Quanta, Compal, Asus, and the like mainly assemble MoBo's using Intel's CPU and chipsets for Dell and HP. They all use basically the "same" parts. There is far less intellectual property to protect so Dell can easily co-mingle development teams and leverage resources across business units. They are viewed more as commodities similar to drives, memory modules, LCD glass etc, etc.
Not so with Intel my friend. For Dell's internally developed systems (like Workstations for example) Dell is a validation partner and works closely with Intel to debug their silicon starting from Intel's internal development, timing closure, IO ring, package layout to the first engineering samples thru customer ship. That involves a lot of highly sensitive information. You can bet your life that Dell would require highly segregated development resources to support both AMD and INTEL.
Boy, if HP, IBM etc have engineers in the same building sharing restricted documents from Intel and AMD, sharing debug and bring up time in the labs with timing specs scatterd about the benches, BIOS teams hanging out arguing about register settings, bootstrap options and why Intel only has only 3 drive strength settings for data strobes vs. AMD's 6, Simulation teams sharing package substrate, IO buffer modeling information, SPICE decks and the like.... God bless em! You just can't have design teams structured with the capability to easily share this kind of IP because it will accidentally leak... and LEAK BAD... regularly. Besides the conflict of interest, it sure could create many more opportunities for moral dilemmas than currently exist.
As to the business case argument. You state Dell is missing out on a large segment, but not sure what the cannibalization conversion factor would be and that Dell would lose their "preferred vendor discounts" which translate into pure profits. So you are implying that Dell would have to give up profits in one area to pursue them in another. I'd have to see hard numbers to determine if it was justified. Dell has those numbers and obviously by their actions, they don't think so.
If Michael and Kevin knew they could make more money and better position the company OVER THE LONG TERM with strategy "B" over strategy "A", don't you think they would do it?
Do you think they are in business to make Intel happy?
Last time I checked, they were in business to make as much money as possible with the best strategies available at any given time... without undermining future profit or growth potential.
To be sure, Dell can make higher margins on systems without using AMD. Lately however, they had lost some of their focus on leading edge technology in favor of beefing up share in the lower end consumer segments but are starting to re-energize efforts to attract those long lost PC snobs. Look at the XPS 600. Nvidia chipset, Intel CPU, big fat juicy margins. First to market with dual x16 SLI graphics. A little competetion with Alienware and those guys. How un-Dell like. Stay tuned. There's a lot of margin dollars out there that can be had without AMD.
As well, server growth is not hampered by the absence of AMD in the product line. The challenges in that space go so far beyond that issue that it would bake your noodle.
No one has yet to prove that Dell would have to add AMD to the mix to a.) increase market share or b.) increase margins.
Turn the right knobs and you can do this solely with Intel.
As to the growth argument, the numbers don't lie. Dell is the benchmark for unit growth and market share gains within the industry. Something they have managed to do without AMD to date.
Too bad though. AMD has a solid architectural advantage over Intel IMO. CPU's with integrated memory controllers that negate the need for a Northbridge, the HyperTransport bus for cleaner multi-cpu scalability and power consumption advantages just to name a few.
Heck, I have good friends who work there and I'd like to see them become millionaires too. I would like to see Dell use em'.
I just haven't seen a clear business case for doing so.
MEATHEAD |
