Never say never

by Ivor Soans    May 22, 2006

Last week saw the fall of another bastion in computing–the Dell-Intel relationship. Although Dell will continue to use Intel processors for a vast majority of its systems, AMD has made an entry–Dell has announced it will use AMD’s Opteron chip in high-end, four-way servers by end-2006, thus bringing down the curtain on its long-standing policy of offering only Intel-based systems.

There have been rumours of this announcement floating around for months, and although you may not see a Dell PC or notebook with an AMD processor anytime soon, this is certainly the first step towards that. The Dell-Intel relationship seemed watertight and now that it has been breached, it’s far easier for the entire dam to come crashing down.

It s easy to see why Dell decided on Intel after dilly-dallying for months–Dell’s margins and financials are no longer what they used to be, and competition has also gotten tougher. In particular, Hewlett-Packard is no longer the sloth it was. Besides, AMD is doing extremely well in this server segment and therefore, it makes eminent sense for Dell to offer AMD when hitherto it has only offered Intel s Xeon and Itanium2.

Interestingly, the four-way segment is among the most profitable server segments–another reason why Dell decided to bring in AMD-powered boxes into this segment.

For us in India, this news is especially significant since the PC growth markets of the future are countries like India and China. Dell has an operation here, but in a market where online buying of PCs isn’t really the hottest thing around, Dell has a long way to go and the AMD decision will only increase customer choice. That s because anything that promotes healthy competition between AMD and Intel will positively impact the customers who buy systems based on processors from the two chip giants.

The technology space is one that never ceases to surprise Wintel was one such term, but today Intel supports Linux in the quest to provide consumer choice, even while it still has a strong relationship with Microsoft. It ll be interesting to watch how the Dell-AMD relationship progresses as they go beyond the first few steps.

Tags: Dell AMD