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Don't Be So Quick to Dismiss the No-Names!

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By Swankman
June 11, 2001

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Longhook, I love your posts. I think it's great that we have a fellow long that will look at the other side of the picture. We need posts that point out the negatives of our favorite company, as well as the positives.

One of your main topics of criticism lately has been AMD's lack of support by the major original equipment manufacturers (OEMs). Others have lamented the fact that only "no-name" companies have supported the new dual processor server chipset.

I agree that it's very important for AMD to improve their relationships with their largest customers. I wish that the big guys had been there with new product announcements on the day of the product's launch. It didn't happen.

However, don't be so quick to dismiss the importance of how far AMD has come with smaller resellers and white box builders. The so called no-name guys.

Here are a couple of recent articles from Computer Reseller News discussing the comeback of the clone makers.
 
I've sold components and white box systems for years. My business has been booming lately and my company is on fire. We sell CPUs, motherboards, hard drives, video cards, NICs and fully configured systems. We also sell a lot more servers now than ever before. One of the reasons is that I make them for a heck of a lot less than the major OEMs do. My resellers do the sales and support for them. Although we haven't used the AMD server solution yet, I know AMD has been in here talking to us about it lately. I'm sure we'll be building them in a matter of weeks.

I went to the AMD Tech Tour last week. It was twice the size this year as last year. It seemed that every system-builder within a 200-mile radius was there. Microsoft, NVidia, Seagate, WD, and a bunch of motherboard makers had representation at the show. All talking about the solutions that AMD is providing. I only remember Microstar and Computer Associates being at last year's show.

AMD is out there hustling. They are working closely with the small resellers and box builders to come up with solid, inexpensive IT solutions. I don't remember ever having an Intel rep stop in to my company, even though we sell more than a thousand of their CPUs each month. AMD is here every few weeks. Our rep is always sending us emails about what's going on with AMD, although I've always heard about what he says on this message board days before! :).

AMD has come so far in the past couple years it's unbelievable. Almost all my customers now offer AMD systems and for many of them it's over 50% of their business. I can remember a time when no one would buy AMD except for the people trying to put together the absolute cheapest box they could.

Are my customers IBM, Compaq, and DELL? No. But they compete against them every day. And they win deals all the time.

AMD is smart for cultivating these relationships. The big guys will follow the little guys when they start losing more and more orders to them. On the flip side, for LongHook's benefit, it's also quite possible that Intel will come out with a new chip that will help the tier 1 OEMs put all the small guys out of business. I sure haven't seen or heard of anything lately that might do this, but Intel is a pretty crafty company that is sure to pull its head out of the sand one of these days.

I think a more likely scenario is that AMD will be the CPU of choice for small- to mid- size companies and Intel will still be preferred by the Fortune 1000 for some time to come.

If AMD can maintain and build off what they've accomplished the past couple of years, then I think this stock will someday be a goldmine.

Sorry for the rambling post, I've been writing it between sales calls again....

Swankman