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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: kash johal who wrote (56445)	4/26/1999 6:07:00 PM
From: A. A. LaFountain III	Read Replies (3) \| Respond to of 1571806

Re: "Intel Data Center" I believe that Intel's involvement in data center outsourcing would be at the expense of its customers' customers (those organizations that would be buying servers and installing them) unless Intel were to build its own servers (hardly out of the question). How does this impact AMD? Its own entry into the server-oriented MPU segment is probably quite small during the timeframe INTC has mentioned for its data center ramp, so the loss of a few thousand placements to INTC-based machines within the overall market oppportunity strikes me as insignificant. But a more important issue is one that I posed in a recent posting: what is the significance of AMD becoming more focused in MPUs as INTC is moving hard to diversify from them? Given INTC's excess cash flow, it's easy to understand its ability to make other investments. But few of these opportunities, it seems to me, have an inherent inability to offer the proprietary margins and returns on investment that the near-monopoly in MPUs has been able to generate. This would indicate a gradual reduction in returns from operations at INTC. So the key question is how the projected returns from these venture will stack up compared to the returns from a) cash; or b)additional stock buybacks. It's quite possible that lowered investment returns from the MPU business at INTC would still represent excellent returns for AMD. In such a scenario, both companies could do well by market standards (and then maybe we wouldn't be subjected to some of the more puerile noise on this thread). - Tad LaFountain