AMD seeks presence in small to medium business

AMD announces that they are looking for greater penetration into the small and mid sized business environments. By offing a unique platform, new chip set, and possibly most importantly, platform stability for two years and a three year warranty to replace the customary one year, they might just succeed.

AMD has always been an alternative in the consumer market for people trying to get the greatest value for their PC dollar. But in the business PC market, Intel is generally the only name in town. That appears to be about to change.

On April 28th AMD is announcing a new initiative, AMD Business Class, to get manufacturers to develop AMD based commercial desktop and laptop products. HP will offer two new corporate desktops, and Dell will refresh its OptiPlex 740. Fujitsu-Siemens, Acer, and Lenovo are expected to have offerings as well. The platform will include single, dual-, tri- and quad-core microprocessors, a new chip set called the 780V and optional ATI Radeon discrete graphics

Along with the platform comes additional warranties and guarantees. AMD will extend the processor warranty from one to three years and will guarantee that the processors will remain available for two years. This is as much as 12 to 18 months longer than previously.

From ComputerWorld:

"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."

According to IDC chip analyst, Shane Rau, AMD has an opportunity to take market share. PC makers want an alternative to Intel, and AMD has already established itself as a credible provider of processors for the corporate market through its Opteron chips for servers.

From CNN:

The small-and-medium-business market is "a big opportunity for AMD and hardware partners, specifically PC OEMs, because it's one of the sectors that isn't well understood and, nevertheless, there are decent growth rates," IDC PC analyst Richard Shim said.

IDC expects PC shipments to small- and medium-sized businesses to grow 14.9% this year to 103.1 million units, compared to overall corporate-market growth of 12.3% to 176.7 million units.

PC makers "recognize more attention is needed to attract these businesses," he said, and AMD's products give PC makers "more ammunition to attack" the market. AMD will offer platforms including integrated graphics chips from its ATI unit, though it will also support graphics products from rival Nvidia Corp. (NVDA).

It would seem that the established front runner companies should not be sitting back comfortably just now. Microsoft has seen strong resistance to the Vista change, Apple announced a 43% jump in revenues and has reached a 14% penetration rate according to some sources. And now AMD is reaching out to a market share traditionally dominated by Intel. The question is whether business will see a stable platform carrying a longer warranty and longer guaranteed shelf life as a reason to purchase. Personally, I can’t see how they would miss the obvious advantage.

What are your thoughts? Do you see an advantage to AMD’s approach? Or do you think it will fall flat? Is business flexible enough to see the value in making a change?