Dell predicts dual-core Xeons to top AMD in 2006

IDG News Service - Dell Inc. Chairman Michael Dell, speaking at Gartner Inc.'s Symposium and ITXpo Thursday, said he believes Intel Corp.'s dual-core chips will take over the performance lead from Advanced Micro Devices Inc. in 2006.

Gartner Inc. analysts John Enck and Jennifer Beck questioned Dell on a variety of topics during the session, returning often to the question of how Dell can continue to grow at a rapid pace. Enck asked Dell the question he has heard many times over the past two years: whether or not the company would consider using processors from AMD.

Dell has long claimed that its exclusive relationship with Intel allows it to minimize product development costs, but many analysts also believe that Dell receives substantial rebates on processor purchases for remaining loyal to Intel.

However, analysts and companies such as Hewlett-Packard Co., which sells servers using processors from both companies, believe that AMD has had a performance advantage over Intel for a few years. This will change when Intel introduces processors based on its 65-nanometer processing technology, Dell said.

"Intel takes a very definitive lead in performance and power management at 65 nanometers. ... If we thought AMD was going to be supercompetitive in the spring and fall of next year, we'd be introducing AMD products right now," Dell said. Enck didn't ask why Dell hasn't introduced AMD products over the past year, given that Intel did not have that performance lead at the 90-nm process generation.

Earlier this week at the HP Technology Forum, managers from HP told users that AMD's dual-core Opteron would have a performance lead over Intel's dual-core Xeon in the first part of next year. They said it was too early to evaluate the performance of the chips that will be available from both companies in the second half of 2006.

Dell also discussed the growing importance of services to his company's future growth plans. PCs rule the roost at Dell, but the company's dramatic growth in that market has slowed in recent quarters. Enterprise technology services represent a relatively small area of Dell's business, but that will change in the coming years, he said.