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To: The Duke of URL© who wrote (174299)4/29/2003 6:36:16 PM
From: THE WATSONYOUTH  Respond to of 186894
 
Intel management looking out for the best interests of their shareholders. Enjoy.

theinquirer.net

Intel strong armed vendors at AMD launch

Do you really want to go to the ball?

By Charlie Demerjian: Friday 25 April 2003, 09:23

THE OPTERON LAUNCH was a bright, loud, festive occasion, with bigwigs from companies high and low filling every corner, and eating those little things served in an artful way on silver trays, lanced with toothpicks. I salute those brave enough to try them, and if anyone was there, what were the striped square things next to the buns filled with yellow goo?
For all the festivities and free food-like, there was one thing missing, vendors. The vendor area had about 20 companies showing their very impressive wares. The ones that stuck out were the servers from Atipa and the clusters from Appro and Racksaver. None of these were lightweight machines, or anything close to white boxes.

Hector Ruiz even had a Boxx workstation running, you can just see it by the podium (here) in picture 2. Impressive to say the least.

When things moved down to the Q&A session in the basement, AMD had a stand in back of the seating area filled with motherboards and cards. There were eight motherboards, one of which was a workstation board, and about as many assorted cards. There were Gigabit ethernet, SCSI, and various server oriented cards. My first thought was "I must have missed the big display when I walked through the vendor area earlier".

I ran into Tyan, MSI, ATI, and Nvidia representatives, all of which had some really cool hardware to tell me about, but nothing to show. In fact, other than the people there, the glossy product sheets, and the names listed as 'partners' on the official launch materials, there was a decided absence of anything proving their existence. It was a small venue (Historic in PR terms), but not that small. I thought it strange, but quickly rationalized it by thinking that it was a server launch, not a parts, or even an architecture launch. Today was meant to show AMD's server capabilities.

Moving on, I started talking to the vendors, asking the usual questions about the products, can they spill the beans on upcoming stuff and the like. Tidbits aside, there wasn't much new information there, it has all been covered before the launch. By about the third vendor, one thing stuck out, and stuck out big. They all told me that prior to the launch, they received a phone call from Intel. Intel asked if they were going to the launch. If they replied yes, the Intel rep asked them if it was 'important to them to go', or 'if they really wanted to go'.

Pressing the vendors, I got the same response, 'Intel is too smart to threaten us directly, but it was quite clear from that phone call that we would be risking our various kickback money if we went'. If one vendor had said this to me, or even two, I would have put it down as little more than an annoyed vendor, but they all told me this. When asked for clarification, the stories sounded more and more alike, a pleasant sounding phone call from the Intel rep that made the hair on the back of their necks stand on end, and left no doubt in their minds as to what the 'request' actually was.

Obviously, no one wanted to have their names in print as saying so, they were obviously scared to death. One vendor told me 'you need to sell Intel to survive you know'. Others named a vendor who did not show because of the pressure, and two or three said 'why do you think there are no motherboards here'? Underneath the happiness of the occasion, there was an undercurrent of uneasiness at best, and it was everywhere.

Intel's tactics were confirmed by several people not working at the show, but who would be familiar with how things worked. One even went so far as to point out that there is a current legal case in the EU in which Intel is a defendant for using monopoly tactics. I guess old habits die hard, or at least get a more palatable, harder to prove wrapping.

In that atmosphere, I congratulate all the vendors who did show up, you did a good thing. The way to end practices like this is to get them out in the open, not bury them. If no one knows, it only makes the bad guys stronger, and you weaker. µ

Mike Magee writes - Like Charlie, I was also at the Opteron launch. We didn't hunt in a pair, and I can confirm independently that I was also told this. Further, one vendor, Solectron, did apparently cave into the pressure, as we reported a week or so back. We have these vendors on the record, but we're not publishing their names for rather obvious reasons, given the above.

THE WATSONYOUTH



To: The Duke of URL© who wrote (174299)4/29/2003 6:47:35 PM
From: THE WATSONYOUTH  Respond to of 186894
 
One man's opinion on Intel's strong arm business practices.
Enjoy.

theinquirer.net

Intel's art of gentle AMD persuasion misfires

Opinion Loneliness of the long distance phonecaller

By Jack Russell: Saturday 26 April 2003, 13:03

IT'S NOW EMERGED that Intel attempted to "persuade" Opteron vendors that attending the conference might not be in their firm's best interest.
(See Intel strong armed vendors at AMD Opteron launch).

This is not the first time Intel has engaged in such activitities, and unfortunately it's merely another link in a long chain of events. We've seen the fine folk over at INTC cut down balloons, offer seminars on AMD's processors, spread FUD every way they can over its competition, and lean on motherboard manufacturers not to ship competitive products -- most recently with Via -- but also three-and-a-half years ago with the launch of the Athlon.

For quite some period of time Intel also heavily hyped RDRAM and discounted SDRAM as a future memory standard, putting tremendous pressure on OEMs and motherboard manufacturers alike to support this new type of RAM. When major secret stock deals were uncovered between Intel and Rambus not that long afterwards it didn't take a genius to put two and two together.

Considering how many times it's attempted to use this strategy, and how many smart people work for the company, you'd think Intel would've realized by now that it mostly doesn't work. Athlon motherboards shipped anyway, and with ever-increasing visibility, the market vehemently rejected RDRAM, AMD's model numbers have been accepted and do not cause the confusion Intel attempted to "prove" they would, and Opteron is selling. Only where Via is concerned has Intel seen true results from its aggressive squashing of a competitor.

The problem with a strong-arm approach to computing is that the engineers and nerds that make up the core of technical buyers tend to strongly disapprove of what they view as "slimy" marketing. Marketing efforts are typically seen, at best, as a necessary evil, and at worst as the lies of a company that cares only about their profit line. A company's perceived image and the goodwill it's generated in the community can be tremendous commodities.

There's also a definite taint of bad sportsmanship about the entire deal. Its not as if Intel's the little player on the block with tight profit margins and no income, and while competition is competition there does come a point when a situation stops looking competitive and begins to look petty. Perhaps most significantly, however, is the resentment such strong-arm tactics create in manufacturers and channel distributors who greatly resent being told how to run their businesses.

Lest you think Intel's practice in such matters is limited to its channel partners, the company maintains a very similar policy of "discussing" reviews with journalists. Intel will never say you were wrong — only that you "misunderstood" the situation, that your review is "incomplete" and that you aren't "seeing the big picture." A list of recommended benchmarks, testing situations, and criteria for measuring performance will quickly follow, along with exhortations of Santa Clara's willingness to work with you to make sure your reviews are "fair." The reason such tactics work is because they sound completely reasonable when presented a certain way — but the constant undertone throughout the conversation carries a definite threat of "or else." The implied meaning of such a conversation typically runs like this.

"We don't like your review because we feel it was too harsh. Whether or not we have any basis for this opinion we have called you up to inform you that you will cease and desist from reviewing our products harshly. If you used benchmarks other than the ones we recommend, we will be questioning why you use them and what value you think they have. If you don't agree to tow the Intel line more closely in the future you will find yourself "accidentally" forgotten when our next NDA launch comes up."

Of course, no company likes a negative review of their products, but certain companies are willing to tolerate statements of fact much more than others. Intel, of course, is not the worst at this sort of behavior — both Apple and Microsoft come to mind as companies which are more draconian when it comes to their product lines and journalistic freedom to cover them — but ultimately it's not the company employing the tactic that matters, it's the tactic itself.

Attempting to persuade your buyers or vendors into moving in a direction they don't wish to go, even if successful in the short-run, will fail in the long. Intel may have put sufficient pressure on Solectron not to attend the Opteron launch, but I guarantee Solectron isn't sitting around thanking Intel for such a maneuver. Alienate your customers too much and treat them too harshly, and you'll find them jumping ship when a different solution comes along. Much of the success of Linux may be due to the simple fact that many people are fed up with dealing with Microsoft, the company's ever-rising prices, and its arrogant attitude in the overall market. Now that a different solution is emerging, potential buyers are evaluating it — and that makes Redmond very, very nervous. Microsoft hasn't focused on giving customers every reason on earth to stay MS customers, it's focused on getting every dime out of them they could. It may turn out to have been a very bad strategy.

If you ever want a crystal-clear example of how badly the market can punish a company who it believes is unfairly attempting to strong-arm the market, look at Rambus. Whether you feel the company's attempts to take over the entire DRAM industry by courtroom fiat were based in fact or in the lawyer-driven greed of a patent-driven company, there's no denying the fact that community response to the maneuver was negative in the extreme.

The bottom line is that strong-arming customers, vendors, and channel partners doesn't work, it never has, and it never will. It may, at best, force them into line in the short-term, but in the long-run people will remember the occurrence, and it won't be fondly. µ

THE WATSONYOUTH