Athlon shortages: what was Heidi thinking?

[Gaspard]

This is posted in reference to Heidi's preposterous piece in this week's SysOpt newsletter, in which she argues that AMD's announcement that they've sold out of processors for Q2 is evidence that "AMD's following its usual self-imposed recipe for disaster." Apparently, in Heidi's mind, AMD's management is to be blamed. And who does she hold up as the paragon of managerial wisdom? Why, Intel of course.
But she seems awfully eager to poke at this minor chink in AMD's silicon armor while ignoring completely Intel's myriad problems. The fact that Intel has a board of directors rated in the top four by Fortune magazine, and a CEO whose hiring boosted stock prices, is all the evidence she needs that Intel is doing a great job. Absurd.

Allow me to point out a few things:

1. AMD is currently making money hand over fist. Even if they are unable to ramp up production to significantly higher levels than in the last few months, they'll still be swimming in profits for the forseeable future. Why? Well...let's look at 2...

2. Intel's recent problems have dwarfed those experienced by AMD. Chipset and processor bugs and incompatibilities, unpopular Rambus technology, serious problems meeting demand for the P3 Coppermine, and CeleronII's that are about to be shamed by the Spitfire. Tell me again how brilliant Intel's management is? Lately, Intel has looked more like a clumsy, inexperienced newbie than the savvy market leader it ought to be.

3. "How much is enough" can never be more than an estimated guess. You can't just set up a new chip fab overnight. And if Athlon _hadn't_ been such a remarkable success, and AMD had committed too _much_ capital to the production of Athlon, you'd be complaining just as vociferously.

I don't mean to be nasty. I just felt these points needed to be made.

Gaspard

[Heidi]

I've been hearing all day from people who were upset with my editorial. Let me explain what I was trying to get at - but clearly didn't get across.

My point wasn't to attack AMD, though many seemed to think so. The fact is that I like AMD products, and am responding now using an Athlon processor. I love the product.

My point was that a company's stabililty and perceived stability are critical. Intel is the equivalent of the 500 pound gorilla in this arena. It can afford to make mistakes. The little guy - AMD in this case - cannot. It really doesn't matter if the fault belongs somewhere else. The management of a small company competing against a behemoth cannot afford to make mistakes.

There's another group of little guys - the PC enthusiasts - who are a large part of SysOpt's audience. Our perceptions of a company tend to be based on one thing, the quality of product. In an ideal world, that's all that would matter. This, though, is not an ideal world. The people who make large-scale purchasing decisions must weigh several factors, and quality is only one. Company stability is significant. If a small company is to compete, the OEMs and other large-scale purchasers will look at the likely stability - ability to continue to produce and support product - before purchasing. Yes, it's true that Intel has made mistakes, but there's little doubt about its ability to continue. In other words, Intel may mess up, but the company can be expected to eventually come through. That's what AMD is competing against.

At this point, AMD is under a very critical eye. Fortune magazine has rated its management as among the five worst in the nation! That is not good news, but it is news that CIOs and managers of OEMs pay attention to. Any slip-up on AMD's part - even if it isn't their fault - is bound to result in purchasing decisions going against them.

Let me give an example from my own (now long distant) past. For two years, I was a technical training developer for ROLM corporation, which made what was then the best telephone system available. When I arrived at the company, the employee turnover rate was virtually zero. When I left two years later, it was nearly 100%. Engineers were leaving the company in droves. Ultimately, the company imploded. Why? Bad management. They did not know how to manage growth. They did not know how to allow engineers develop the next generation product. They did not know how to reign in their sales force. They simply did not know how to manage growth. Yes, they produced the best product in the business, but that did not matter.

So, the fact that Intel's made a lot of mistakes lately doesn't mean anywhere near what AMD's mistakes mean. I wish it weren't so, but it is.

I truly hope that AMD pulls it off, and that their next line of products is so good that the world has no choice but to sit up and pay attention - and I think they have a good chance of doing that. Nonetheless, the company cannot afford many mistakes, and the person who makes computer purchasing decisions, or hopes to some day, must pay attention to more than the quality of the product.

-- Heidi

[hd581]

I'm not finding this article. Is it on SysOpt?

Incidentally, welcome to the forum both of you. http://www.sysopt.com/forum/smile.gif

[This message has been edited by hd581 (edited 04-27-2000).]

[x35Agent]

It was in the SYSOPT weekly news letter.

[barry glisson]

welcome aboard guys barry

[Sharpy]

Welcome to Sysopt.
If this Quality of posting is anything to go by it looks like you will both be valuable members. http://www.sysopt.com/forum/icons/icon14.gif

Just a thought but Hiedi's comment's do make me think of my beloved Amiga.(Great product with bad management http://www.sysopt.com/forum/frown.gif)

[Faramir]

Gaspard-- I noticed in your profile you listed conflict as one of your interests. What makes conflict interesting? Just wondering.