Oh god no: Rumor: Dell to buy AMD

[Phynaz]

@Phynaz, what makes you assume, that all Dells Corporate customers, would switch to HP (because of a amd cpu)?

is it because the corporates cant get enough performance for their workers desktop pcs? how much cpu does a office workload require? more than AMDs cpus can deliver? or are you calling Corporate customers Intel fanbois that buy intel for no reason other than the name?

What is AMD's penetration in the corporate market. For servers we know it's less than 10%. Let's give them the benefit of the doubt and say for desktop it's 20%.

So now Dell buys AMD and drops Intel. 90% of your server customers and 80% of your desktop customers now need to re-qualify your product. A number of customers will say "Intel is our standard". That number is going to be very high, and they are going to walk. That's how corporations are, there's nothing fanboi-ish about it.

 

[Arkadrel]

the reason AMDs penetration is so bad is not just because of the CPUs, its because there arnt (enough) OEMs that sell them...

if DELL went all amd, Im sure AMD penetration would be higher than 20%... now Im not sure how much % of the OEM sales Dell represents, but I doubt everyone that usually buys dell would jump ship.

I think some that used to buy Dell, probably would... but hardly everyone (due to a cpu shift). The reason AMDs penetration isnt higher is partly because of Intels practises, and everyone being scared of them.

if someone like Dell went full on amd, their (amds) penetration would rise alot.

A number of customers will say "Intel is our standard". That number is going to be very high, and they are going to walk.

I think they look at Dell and their services more than they do about the CPU inside...
If it was a AMD CPU inside, I think most would still buy dell, and the only thing that would happend is AMD would sell a buttload more CPUs.

 

[magomago]

What is AMD's penetration in the corporate market. For servers we know it's less than 10%. Let's give them the benefit of the doubt and say for desktop it's 20%.

So now Dell buys AMD and drops Intel. 90% of your server customers and 80% of your desktop customers now need to re-qualify your product. A number of customers will say "Intel is our standard". That number is going to be very high, and they are going to walk. That's how corporations are, there's nothing fanboi-ish about it.

Requalify? LOL..... you think they run around V&Ving the chipsets each time? Measure the voltages around different locations on the chipset? Prime95 all day? I would think they have to do this EACH time a new chipset/ processor is released...basically, anytime anything on the computer changes. Our company has a contract with Lenovo and I've seen 3-4 different versions of the same laptop come out.

To insist on the product name for an equivalent substitute is indeed fanboyish.


Now do I think that your point makes a difference? Nope, not at all. Honestly I think the relationships between sales teams and their clients matters a shitload more than if the PC/Laptop has an AMD CPU or an Intel CPU.

 

[Phynaz]

Requalify? LOL..... you think they run around V&Ving the chipsets each time? Measure the voltages around different locations on the chipset? Prime95 all day? I would think they have to do this EACH time a new chipset/ processor is released...basically, anytime anything on the computer changes. Our company has a contract with Lenovo and I've seen 3-4 different versions of the same laptop come out.

To insist on the product name for an equivalent substitute is indeed fanboyish.


Now do I think that your point makes a difference? Nope, not at all. Honestly I think the relationships between sales teams and their clients matters a shitload more than if the PC/Laptop has an AMD CPU or an Intel CPU.

I'm having a difficult time with an appropriate response to your post, but I will respond in the best way I can without the Lol's.

Yes, large corporations validate their platforms. It's a functionality, compatibility testing. That does not mean I have engineers running around testing voltages in chips. It does mean that I have guys making sure all our apps / drivers / hardware runs without exception.

It's also why corporate platforms are stable. I know what equipment I'll be buying 1.5 years from now. I will have equipment in house 2-3 months before it is released to the public. I will know at least a year in advance when my vendor is making a platform change, and my vendor will query me on how many of the old systems I am going to want to procure after EOL. They will then pull that many off the line and warehouse them for me so I don't have to change platforms at a time that may not be opportune for me.

Everybody in the Fortune 500 does this.

As far as seeing 3 or 4 versions of the same laptop come out, are you saying you have 3 or 4 different OS images for the same laptop now? I'd shoot my supplier if they had me spending the time and money to maintain that for a single model. I'm back down to one laptop image, and by June I'll be back down a single desktop image again (we put off refreshing for two years when the economy blew up, so I was starting to get a wide variety of hardware, three models of laptops and two desktops.)

Edit:
Here's what Derek Meyer had to say about it in his last CC:

Well, I just think that it's a big market and with products 
only in the market for roughly 90 days there's a seed program, 
a certification cycle, before enterprise buyers really start to buy, 
so this is not a consumer marketplace where boom, the product's 
there and everybody turns on to it immediately.

 

[Arkaign]

Pay no attention to this bizarre and senseless rumor. I can think of only two real reasons for something like this being told :

(1)- Someone looking for page hits.

---

(2)- Someone looking to manipulate stock prices for personal gain, but for that to happen, the rumor generally has to get some traction in the press. This happens all_the_time and is basically securities fraud, but people are rarely caught.

 

[OCGuy]

AMD is on the market, that is for sure.

 

[Idontcare]

Pay no attention to this bizarre and senseless rumor. I can think of only two real reasons for something like this being told :

(1)- Someone looking for page hits.

---

(2)- Someone looking to manipulate stock prices for personal gain, but for that to happen, the rumor generally has to get some traction in the press. This happens all_the_time and is basically securities fraud, but people are rarely caught.

It is also a way to "test the waters" to see what sort of price impairment a current stock has going against it based on otherwise intangible factors...such as management and/or buyout possibilities.

If say HP or Oracle were interested in buying AMD then it is in AMD's best interests to seed a rumor, unrelated of course so it is easily deniable and not illegal, that an unrelated company is interested. Then gauge the market reaction.

If it pops on the rumor then the conclusion is that AMD is priced at a discount owing to existing management, the premium the market placed on AMD on rumors of a takeover thus uncovers hidden value that the company has which could be unlocked were it to be bought and led with new management/vision.

If it falls in price on the rumor though then that is a vote of confidence for current management and any actual M&A discussions going on at the time would likely be scuttled.

There's all kinds of information to be had out there, you just got to know how to mine it. Whoever floated this DELL rumor is just mining data that is being fed into some other decision tree most likely.

(possibly even a class-action suit by current shareholders against the BOD for bungling the departures of management in a way that distressed the stock price)

 

[cotak13]

This forum sounds more like a hen coop everyday.

 

[Acanthus]

Now AMD is cutting off contracts with IBM. More evidence?

Form 8-K for ADVANCED MICRO DEVICES INC

14-Feb-2011

Termination of a Material Definitive Agreement


Item 1.02 Termination of a Material Definitive Agreement
On February 11, 2011, Advanced Micro Devices, Inc. ("AMD") terminated the Sale of Receivables-Supplier Agreement dated March 26, 2008, as amended, with IBM Credit LLC ("IBM Credit"). In addition, AMD International Sales & Services, Ltd. ("AMDISS"), a wholly owned subsidiary of AMD, terminated the Sale of Receivables-Supplier Agreement dated March 26, 2008, as amended, with IBM United Kingdom Financial ("IBM UK"). Each of the sales agreements was terminated pursuant to section 9.1 of such agreements, which permit a party to terminate without cause with at least 30 calendar days prior written notice to the other party.

Under the agreements, AMD and AMDISS had agreed to sell to each of IBM Credit and IBM UK certain customer receivables up to credit limits set by IBM Credit and IBM UK applicable for each customer.

 

[Phynaz]

Interesting, I didn't know AMD was selling their receivables.

I really don't know what that means as far as a takeover. Usually when you are on the market you want to bulk up on cash to make yourself more attractive. That way the acquiring company can use the cash they just acquired to help pay for the deal.

This is just the opposite, they are saying we are no longer reaching out for immediate cash and now prefer to keep the receivables on our books.

Unless they are going to sell them to somebody else that is offering a better deal than IBM.

 

[jiffylube1024]

That is the dumbest rumor I've heard in a long time.

DELL's revenue is probably 95% Intel-derived. Buying AMD would be truly the absolute last thing DELL would do at this time.

They'd go on record as supporting the clubbing of baby seals before they would even contemplate the merits of buying AMD, let alone actually formulating a proposal to do so.

AMD does represent takeover opportunity for the likes of Oracle (to complement their SUN purchase) and HP (or anyone that aspires to be more like Apple to take on Apple).

But DELL? What a waste of an opportunity to spin a splendid rumor. Weaksauce.

Agreed. Dell has been in bed with Intel for time immorial. Dell was one of the guilty parties of quickly wilting under Intel-generated pressure when dell last tried to do a big switch to AMD. Now they only dabble in the odd AMD processor, like on a couple of low-end netbooks.

I wouldn't see this as a good move for either party, honestly.

Dell wouldn't add to their bottom line as AMD isn't profitable.

AMD would probably cost cut all over the place under Dell management and build fabs in India.

No one wins.

Agreed.

Just doesn't make any sense.

Agreed.

And Dell would be bankrupt in six months when their sales fall 70%, as all their corporate customers would switch to HP.

Probably agreed.

AMD is on the market, that is for sure.

When aren't they?
---------

I'm actually a fan of Dell (I like their laptops and LCD monitors) and AMD (best CPU for budget computer builds -- I build only Intel for my main rig, and primarily AMD for everyone else where top performance isn't an issue).

Dell already gets huge rebates and discounts from Intel. The only way this makes sense is if Dell is trying to drastically cut costs; switching to AMD top-to-bottom would definitely cut costs of CPU's and motherboards for them. But even this doesn't make sense because as others pointed out AMD is not profitable at the moment and hasn't been for some time. AMD's revenue situation I believe is improving as their Radeon division is profitable and the CPU business is improving, but they are still in the red last I checked.

Dell buying AMD would be a huuuuuuuge reach, and I really don't see it making much sense for either party.

It could be catastrophic in the mobile market; Intel is consistently one manufacturing node ahead of AMD and that makes a massive difference in mobile CPU power consumption.

For Desktops I could see this making sense, but not at all for Dell's mobile platforms, and that is a large and growing share of their sales.

 

[Concillian]

I'm sure Dell has contracts with corporations who are 100% Intel. They'd lose these.

Then they'd lose out on any chance to sell AMD CPUs to anyone else. Why would HP, Toshiba, or anyone else buy a CPU from a direct competitor when they can get one from someone who is not a direct competitor. They'd be selling CPUs to themselves and the distribution channel for places like newegg that sell bare CPUs and that's it. No more selling CPUs to server companies, no more selling CPUs to Compaq, etc...

It would be lose - lose, not gonna happen unless someone paid off the entire board of directors of both companies.

 

[cbn]

I'm having a difficult time with an appropriate response to your post, but I will respond in the best way I can without the Lol's.

Yes, large corporations validate their platforms. It's a functionality, compatibility testing. That does not mean I have engineers running around testing voltages in chips. It does mean that I have guys making sure all our apps / drivers / hardware runs without exception.

It's also why corporate platforms are stable. I know what equipment I'll be buying 1.5 years from now. I will have equipment in house 2-3 months before it is released to the public. I will know at least a year in advance when my vendor is making a platform change, and my vendor will query me on how many of the old systems I am going to want to procure after EOL. They will then pull that many off the line and warehouse them for me so I don't have to change platforms at a time that may not be opportune for me.

Everybody in the Fortune 500 does this.

Thanks for the information.

Maybe if Dell bought AMD they could offer a better price on the total package (not just the chip part) in a bid to make "re-qualifying" worth the cost?

Or maybe I am wrong and the margins on laptops are not good enough?

 

[LiuKangBakinPie]

Dell wouldnt have the Ball to go up against Intel.

 

[Concillian]

Maybe if Dell bought AMD they could offer a better price on the total package (not just the chip part) in a bid to make "re-qualifying" worth the cost?

Or maybe I am wrong and the margins on laptops are not good enough?

One thing a business doesn't do if they want to be in business long:

Go to their highest margin and most predictable revenue customers and say "hey, we're going to change things up a bit, can you help us out by re-qualifying the new stuff?"

If they have to re-qualify, they'll simply re-qualify someone who isn't going to pull shenanigans like that.

The business world of computers is not a high paced environment to make frequent technological changes. As an example, our companies official supported browser was, until January 2010... IE version 6. That's right, IE6.

 

[cbn]

Dell wouldnt have the Ball to go up against Intel.

Hmmm...

But HP is Dell's competitor and they seem to be aligning with Qualcomm at the moment.

Furthermore, there are rumors MS will go Cloud OS (which doesn't need x86) to help position itself against Google.

Maybe x86 will slowly become less relevant with each passing year and Companies like Dell don't want to be late making the switch? (HP has already announced WebOS for the desktop, which I presume will be featuring Qualcomm 2.5 Ghz quad core for 2013.)

 

[Ares1214]

I think this could mean one of a few things. In order of unlikelyness:

1: Dell has seen BD, was extremely impressed, and wanted it to be a Dell exclusive or have some sort of hand in its success. This is extremely unlikely because I doubt BD is going to be THAT impressive, nor would that motivate Dell to buy out AMD.

2: Dell wants a vertical monopoly. They want to control all the parts going into their computers. They obviously need a CPU, and Intel could buy every OEM out there, so obviously the only choice is AMD. Not very likely, as Dell hasnt shown much interest in this.

3: AMD wants to see how the market will react to a buyout rumor, because they really arent in the best waters, have no management, and are prime for buying out. This actually isnt that unlikely, but we have seen AMD be bought out several times over in rumors, and it hasnt happened yet.

4: Someone just felt like making stuff up. Very likely.

Only so many companies could possibly want AMD. Id probably say IBM and Oracle are the only 2 real possibilities. Some far fetched ones are Apple, HP, Samsung, thats about it...US government :biggrin:

 

[magomago]

I'm having a difficult time with an appropriate response to your post, but I will respond in the best way I can without the Lol's.

Yes, large corporations validate their platforms. It's a functionality, compatibility testing. That does not mean I have engineers running around testing voltages in chips. It does mean that I have guys making sure all our apps / drivers / hardware runs without exception.

It's also why corporate platforms are stable. I know what equipment I'll be buying 1.5 years from now. I will have equipment in house 2-3 months before it is released to the public. I will know at least a year in advance when my vendor is making a platform change, and my vendor will query me on how many of the old systems I am going to want to procure after EOL. They will then pull that many off the line and warehouse them for me so I don't have to change platforms at a time that may not be opportune for me.

Everybody in the Fortune 500 does this.

As far as seeing 3 or 4 versions of the same laptop come out, are you saying you have 3 or 4 different OS images for the same laptop now? I'd shoot my supplier if they had me spending the time and money to maintain that for a single model. I'm back down to one laptop image, and by June I'll be back down a single desktop image again (we put off refreshing for two years when the economy blew up, so I was starting to get a wide variety of hardware, three models of laptops and two desktops.)

Edit:
Here's what Derek Meyer had to say about it in his last CC:

Well, I just think that it's a big market and with products 
only in the market for roughly 90 days there's a seed program, 
a certification cycle, before enterprise buyers really start to buy, 
so this is not a consumer marketplace where boom, the product's 
there and everybody turns on to it immediately.

Lols all you want...its a discussion forum so we discuss and learn.

Yes, I mean 3-4 Different laptops with different hardware configurations. Each have their own image. Unless you have a generic drivers pack that automatically grabs out what is needed (which is perfectly legit) then there is no reason for that to happen.

I think what I see vs what you see is probably the difference in IT depts. You function in one that works....I work at a place whose IT is questionable (uh oh, will these packets be read??) IT here is different...laptops crash all the time, in an attempt to apply dranconian user profiles I can make shortcuts off the desktop but can't delete them (imagine calling IT so they remove shortcuts for you..talk about wasting their time), and they order laptops that only have USB slots (not even PCMCIA slots...talk about crippling engineering development as so many things are based off that)...So I guess I'm coming from a different angle

Either way why should this matter to you if you have a single image for a single laptop type? Does the intel image from 2 years ago with Core 2 Duos magically apply to the Intel i5 chipset today? I would think not. Still going to a new Intel system needs a new image anyways. And if you already know what hardware you'll have in 1.5 years, then it puts on a 1.5 year delay before any supplier would theoretically start delivering AMD based systems (assuming they made a switch)

 

[magomago]

I think this could mean one of a few things. In order of unlikelyness:

1: Dell has seen BD, was extremely impressed, and wanted it to be a Dell exclusive or have some sort of hand in its success. This is extremely unlikely because I doubt BD is going to be THAT impressive, nor would that motivate Dell to buy out AMD.

2: Dell wants a vertical monopoly. They want to control all the parts going into their computers. They obviously need a CPU, and Intel could buy every OEM out there, so obviously the only choice is AMD. Not very likely, as Dell hasnt shown much interest in this.

3: AMD wants to see how the market will react to a buyout rumor, because they really arent in the best waters, have no management, and are prime for buying out. This actually isnt that unlikely, but we have seen AMD be bought out several times over in rumors, and it hasnt happened yet.

4: Someone just felt like making stuff up. Very likely.

Only so many companies could possibly want AMD. Id probably say IBM and Oracle are the only 2 real possibilities. Some far fetched ones are Apple, HP, Samsung, thats about it...US government :biggrin:

Ya I wanna say its #3 or #4. See what happens, spread some rumors. Ugly times for AMD

 

[Nemesis 1]

Agreed. Dell has been in bed with Intel for time immorial. Dell was one of the guilty parties of quickly wilting under Intel-generated pressure when dell last tried to do a big switch to AMD. Now they only dabble in the odd AMD processor, like on a couple of low-end netbooks.

Lets keep it reel . This is a complete lie. When Dell opened up to AMD . It was game over for AMD Intel was about to release Conroe. 2006 . You have a link saying differant lets see it .

 

[mxnerd]

This is the most nonsense rumor I have ever heard. It won't happen.

Whoever cooked up the story must be brain dead.

 

[cbn]

2: Dell wants a vertical monopoly. They want to control all the parts going into their computers. They obviously need a CPU, and Intel could buy every OEM out there, so obviously the only choice is AMD. Not very likely, as Dell hasnt shown much interest in this.

I'm not saying Dell buying AMD is likely, but it appears to me this (admittedly desperate strategy) might help them stay relevant as the battle between Apple and Google progresses.

At one extreme we have a non cloud Apple making good profits with its vertically integrated approach to business and at the other extreme we have Google basically trying to assimilate everyone with "Cloud everywhere" plans. It is just me or do all the other competitors seem to fall in between these two? (looking for various niches to help them survive)

 

[HW2050Plus]

I do not know if that rumor has any substance and I doubt it.

However you should consider that by around now several companies will have received a large quantity of samples of AMD Bulldozer parts as well as of Llano.

As these are potentially very impressive products this could feed some more or less strange rumors in the next month.

Anyway, maybe a Dell manager just was worried how they could ensure to get enough Bulldozer and Llano parts from AMD and maybe they considered if they would be exclusive users of AMD Bulldozer/Llano they could get a significant advantage over the competition.

But that does not necessarily mean that is the point of view of the whole board of Dell. So likewise we will not see such an aquistion.

However I am very sure that there will be more interesting rumors upcoming regarding AMD.

 

[Nemesis 1]

The chances of Dell buying AMD are less than zero. If BD samples are impressing people . Apple would be the company to buy AMD. or others as mentioned . If BD was all that a company buying AMD would already be moving on AMD . XS has a thread going with pretty slides show 4 modular 8 core BD wiping the floor with SB . LOL!

Robert says BD is 10% slower than 6 core Intels at = clocks. Which I think is impressive on AMds part. I wanted it to be faster than SB. Just so my daughter could buy SB cpus cheaper. I want BD to be all that . Just to watch their pricies skyrocket like back in 2005.

 

[Ares1214]

I'm not saying Dell buying AMD is likely, but it appears to me this (admittedly desperate strategy) might help them stay relevant as the battle between Apple and Google progresses.

At one extreme we have a non cloud Apple making good profits with its vertically integrated approach to business and at the other extreme we have Google basically trying to assimilate everyone with "Cloud everywhere" plans. It is just me or do all the other competitors seem to fall in between these two? (looking for various niches to help them survive)

Well dell would need an OS of their own to really make this work. They would have to do something like buy AMD, and something like Linux, for this to really work. Otherwise Apple and Google will still be the power houses with their own OS'es.