Will Dell Really Embrace AMD This Time?

Rumors that Dell will soon offer AMD products are flying again. This time, they have credibility. It would cheer AMD fans and shareholders if Dell finally opened its doors to AMD. But how much would it matter to server builders and managers?

According to Gartner Dataquest, Dell's share of server market unit sales rose to 21.1 percent in the third quarter of 2004, a 25 percent increase over 2003 that put Dell in second place behind HP's 28.5 percent. IBM placed third in units shipped with 16.1 percent and Sun was a distant fourth at 4.6 percent. Revenue-wise, Dell gained 17 percent on $1.16 billion in server sales, about 10 percent of total server revenues. Clearly, Dell is not making its gains in the high end of the server market, where AMD's Opteron has been going.

AMD garnered 8 percent of the x86 server market in Q3 2004, up from 6.9 percent in Q2, according to IDC. Opteron accounts for most of those gains, and IDC analyst John Humphreys says, "Opteron is largely selling into corporate, government and industrial market segments with a need for high-performance systems — hence over 60 percent of AMD's volumes are tied to Linux server deployments."

That trend will change only partially when Microsoft releases the 64-bit version of Windows Server 2003, which is expected in March. So far, customers who are interested in Windows 64-bit servers seem partial to Intel's EM64T Xeon chip, which shipped over 60,000 units in Q3 2004.

"EM64T is shipping overwhelmingly with Windows and is being deployed largely in existing 32-bit environments," says Humphreys.