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AMD's Opteron decimates Xeon market

Ten per cent target reached. Next stop: Er... 12 per cent

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AMD has done the improbable, or maybe just the not so expected. One market researcher has the chip maker's Opteron processor holding ten per cent of the x86 server market.

In just two years, AMD has gone from a non-entity in the server market to pose a serious challenge to Intel's business thanks to Opteron. Mercury Research's news figures show that AMD claimed 11.2 per cent of the server processor market in the second quarter. That's up from 7.4 per cent one quarter earlier. More important perhaps than the 51 per cent jump is AMD's march past the ten per cent market share barrier - a self-imposed measure of success for Opteron.

AMD CEO Hector Ruiz once predicted that Opteron would exit 2004 with ten per cent of the x86 server market. This didn't happen, but Ruiz's optimism wasn't deterred. In a recent interview, Ruiz proclaimed that AMD's new goal was to grab 12 per cent of the market by the end of 2005.

While vendors and customers have been impressed with Opteron, with only HP and Sun Microsystems doing most of the work, gaining share from Intel's Xeon chip has proved difficult. AMD, however, enjoyed a sudden spike in processor sales largely on the back of its new dual-core Opteron chip - a product for which Intel has no real match.

Intel will likely demand that analysts and eager reporters wait until market data arrives from IDC and Gartner to see if AMD truly crossed the ten per cent mark. Because, as we all know, the big analyst houses have stellar records at counting chips.

Should AMD secure ten per cent share from all the analyst firms in the second quarter, Intel and Dell will certainly get even more nervous. They won't be able to answer the dual-core Opteron until 2006.

Dell is sitting out the Opteron explosion, at times saying that customers aren't demanding the product and at other times insisting that Intel has comparable technology. Meanwhile, Dell is willing to fluff around and sell a couple of hundred Itanium servers per quarter. Intel's 64-bit chip, which Mercury counts in the x86 category because of its ability to run x86 code, "doesn't really influence the market share results," an analyst told us politely. ®

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