Advanced Micro Devices, looking to find a niche in the business market, plans to announce a large corporate contract next week, according to company executives.
The new customer is a Fortune 500 company located in the northeast United States, according to executives. AMD Chief Executive Hector Ruiz will announce details of the contract during his keynote address at the Comdex Fall 2002 conference in Las Vegas next week.
The company is expected to adopt Hewlett-Packard's newbusiness desktop, said Kevin Knox, AMD's director of commercial segment marketing and business development. The Compaq D315 uses AMD's Athlon XP processor.
The corporate deal, AMD hopes, will be the first of many. Executives recentlyfor 2003 to focus the company's efforts on winning business customers. AMD has sealed a series of customer contracts in recent months, including a PC deal with the U.S. Naval Academy.
The new strategy comes at a challenging time for AMD, which recently said it would eliminate as much as 20 percent of staff through job cuts and attrition, as part of a cost-cutting plan.
"Not having corporate business puts a fairly low cap on what (AMD's) market share can be," said Dean McCarron, an analyst at Mercury Research. "Corporate has been far from a stellar segment of the PC industry recently, but it still represents a very large volume (of processors)...about 60 percent of the market."
AMD's share of the processor market peaked at 21.8 percent in the second quarter of 2001, according to Mercury. Since then it has slipped to 11.6 percent.
"If you open up the corporate opportunity, the total potential market for AMD more than doubles," said McCarron.
HP said it went with the Athlon XP chip for its Compaq desktop following a number of customer requests.
"Over the last 18 months, our customers in small and medium-sized businesses, government and education have started asking for AMD by name," Jeff Groudan, head of commercial desktop marketing for HP, told CNET News.com when HP launched the new desktop in August.
"There really is no good reason why businesses could not standardize on an AMD platform...assuming the chipset and system vendors have their drivers stable," said Kevin Krewell, managing editor of the Microprocessor Report. "There's no reason why an AMD box can't be competitive."
Drivers are small software programs that manage interactions between software, such as operating systems, and hardware, such as graphics processors, network cards and CD drives. IT managers often look for driver stability in a PC, an indication that an overall system is sound.
Other potential customers are also considering the Compaq desktop, Knox said. It's "included on an awful lot of RFPs (request for proposals)," he said. "We've put a lot of sample units into accounts."
AMD is also looking at the market for business notebooks. The company is offering a new chip package that puts its Athlon XP chip in so-called thin-and-light notebooks--currently the most popular with corporate buyers. The first thin-and-light Athlon notebooks are expected to arrive in the first quarter of 2003.
Additionally, the company has been getting ready for its forthcomingserver chip. Computer makers are testing the chip while AMD is discussing the chip's benefits with large corporate customers.
There's "more interest around Opteron and Hammer than we've seen with any other product," Knox said.