AMD goes after the enterprise with new business push

Extends warranties and availability of processors to get a leg up among IT execs

Advanced Micro Devices Inc. is looking to forge ahead into the enterprise market by creating a commercial road map and realigning desktop platforms into an enterprise offering.

The company on Monday announced its new AMD Business Class program to get manufacturers to develop AMD-based commercial desktop and laptop products designed specifically for the business market. As part of the effort, AMD is releasing its first commercial desktop platform, which bundles various groupings of chips and chip sets, including Phenom X3 Triple-Core processors, as well as Phenom X4 Quad-Core and Athlon X2 Dual-Core processors.

A chip set is a group of integrated circuits or chips that connect the processor with functions like memory, the mouse and MP3 players.

The effort to penetrate the corporate market also includes extending the company's processor warranties from one to three years, and guaranteeing that processors will remain available for two years, as much as 12 to 18 months longer than previously.

"If you look at AMD's business, it's been heavily consumer oriented," said Dean McCarron, an analyst at Mercury Research. "Part of it has to do with their legacy as the scrappy start-up. They've been focused more on the consumer market. Because the consumer market is relatively fast changing and much more flexible about what platforms they use, it's easier to get into. But for AMD to maximize its sales, it needs to have a strong presence in the consumer and business sector."

McCarron noted that making platforms available for 24 months instead of shelving them more quickly is an attractive lure for enterprises that want to standardize on a single platform.

"If you're a company that's installed 1,000 of the same units, you'll want the same thing when you buy more," he added. "When they buy more PCs, they'll want the same platform. It's a stable platform that makes IT's job easier."

Dan Olds, an analyst at the Gabriel Consulting Group said the move could prove beneficial both to businesses wanting to buy AMD chips and to AMD itself.

"It is a positive step for AMD, moving out of just the enthusiast and consumer space and devoting resources to get a larger presence in the commercial and corporate market" he added. "They definitely need the help. With this, they have the chance to get more volume. Corporations buy big numbers of PCs. Also their 24-month guarantee might attract customers who want complete standardization to simplify support, and, assumedly, predictable pricing."

While rival Intel Corp. moved out new chips and moved on to the 45 nanometer manufacturing process last year, AMD struggled as it missed product shipment deadlines and dealt with financial and mindshare issues.

In the past few months, though, AMD has begun moving out its own roster of processors and even introducing several triple-core chips. McCarron said this move into the enterprise space won't necessarily give the company a leg up in its competition with Intel, but will make it more competitive.

"I really see it as a necessary competitive move," he added. "It's necessary to maintain their presence in the business PC market."

Copyright © 2008 IDG Communications, Inc.

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