Feeds

Dell takes care of Wall Street, not customers with AMD move

Opteron distraction

Intelligent flash storage arrays

Dell took the unusual step of announcing the new Opteron product line in its financial statement. Companies almost never reveal products in this manner with good reason. Data center managers don't spend as much time as Wall Street poring through a company's financial figures.

And Dell's move resulted in major financial movements. AMD's shares jumped 15 per cent in the after-hours markets, while Intel's dropped 5 per cent. Dell's shares, meanwhile, bumped up a little bit, despite it reporting a staggering 18 per cent drop in profits and despite analysts' fears that Dell's pledge to overhaul its products and support was all talk.

Dell's AMD ruse provided the desired effect. It attached the Dell name to "a winner," made it look like the company was listening to customers, made it seem like the beginning of a broad product revamp and also went some ways to convincing analysts that Dell has a concrete plan for change.

The problem with all this is that Dell is only going to ship a four-socket AMD box. Such midrange gear makes up the slowest selling part of the x86 server market. Historically, Dell has pared back efforts to play in this part of the server market, shouting that customers really care about one- and two-way boxes.

We doubt that Dell will sell a ton of four-socket boxes, although having such an Opteron system around gives it a nice edge over IBM, which is still paying off its X3 chipset commitment to Intel.

While practical, Dell's four-socket Opteron move does not indicate that it's listening to customers any more than it used to. Intel simply cannot match AMD at the four-socket level, and Dell had no choice but to pick up Opteron if it wants to sell any such systems. Dell was brought kicking and screaming to this scenario and decided to make the most of it by pleasing investors with a bit of eye candy.

Over the next year, you can expect HP's Opteron server business to grow. You'll watch Sun near the $1bn mark for its Opteron server business. And you'll see a host of start-ups and companies such as Rackable nibble away at Dell's volume sales with their Opteron systems. In addition, you'll see Dell unable to bid on a raft of enormous supercomputing deals that have come up and which often dictate Opteron as the preferred processor of choice. IBM, HP and Sun will make a big deal of their wins with these customers, and we'll have more on that next week.

Dell Chairman Michael Dell said yesterday that the Opteron systems "filled a hole" in the company's lineup. Well, it certainly wasn't a hole in customers' hearts. By going so shallow with its Opteron play, Dell has proven that its love for Intel remains more important than its love for customers.

Lucky for Dell and AMD, Wall Street doesn't care in the short-term how many actual Opteron servers Dell will sell. Investors like the fact that Dell has embraced the darling of the moment. They like the fact that Dell seems to be changing and trying to emerge from a protracted slump.

Dell's management had a pretty good hunch investors would buy this line. And, for that, they deserve some credit. ®

Secure remote control for conventional and virtual desktops

More from The Register

next story
Azure TITSUP caused by INFINITE LOOP
Fat fingered geo-block kept Aussies in the dark
NASA launches new climate model at SC14
75 days of supercomputing later ...
Yahoo! blames! MONSTER! email! OUTAGE! on! CUT! CABLE! bungle!
Weekend woe for BT as telco struggles to restore service
Cloud unicorns are extinct so DiData cloud mess was YOUR fault
Applications need to be built to handle TITSUP incidents
NSA SOURCE CODE LEAK: Information slurp tools to appear online
Now you can run your own intelligence agency
BOFH: WHERE did this 'fax-enabled' printer UPGRADE come from?
Don't worry about that cable, it's part of the config
Stop the IoT revolution! We need to figure out packet sizes first
Researchers test 802.15.4 and find we know nuh-think! about large scale sensor network ops
DEATH by COMMENTS: WordPress XSS vuln is BIGGEST for YEARS
Trio of XSS turns attackers into admins
SanDisk vows: We'll have a 16TB SSD WHOPPER by 2016
Flash WORM has a serious use for archived photos and videos
prev story

Whitepapers

Choosing cloud Backup services
Demystify how you can address your data protection needs in your small- to medium-sized business and select the best online backup service to meet your needs.
Getting started with customer-focused identity management
Learn why identity is a fundamental requirement to digital growth, and how without it there is no way to identify and engage customers in a meaningful way.
Driving business with continuous operational intelligence
Introducing an innovative approach offered by ExtraHop for producing continuous operational intelligence.
Why CIOs should rethink endpoint data protection in the age of mobility
Assessing trends in data protection, specifically with respect to mobile devices, BYOD, and remote employees.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.