Businesses Won't Pay Premium For Intel-Based Servers, Survey Says

Two-thirds won't pay a premium for an Intel server, while a quarter said they would pay up to a 10% premium and one in 10 said they would pay more

November 14, 2005

2 Min Read
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Business-technology managers who buy servers are not willing to pay a premium for Intel-based systems, according to a recent survey of more than 300 customers of managed hosting provider Rackspace Managed Hosting.

In a survey completed in the first week of November, 65% of respondents said they would not pay a premium for an Intel server, while 25% said they would pay up to a 10% premium, and 10% said they would pay more than a 10% premium for an Intel-based server as opposed to a system using processors by rival Advanced Micro Devices Inc.

"It did surprise us a little that customers aren't willing to pay much more for the Intel brand," says Paul Froutan, VP of product engineering for Rackspace. "Our survey shows that AMD is getting much closer to Intel than it used to be in terms of perception of performance."

The survey also found that 36% of respondents felt AMD processors provide better speed for their applications, compared with 31% who believe Intel processor provide better speed. AMD processors have better power efficiency according to 34% of respondents, while 25% favored Intel processors.

More than 25% of respondents said they felt pressure to use Intel-based systems, while only 3% felt pressure to use AMD-based systems, and 72% felt no pressure to use either.According to 39% of respondents, marketing is the main reason that Intel has a dominate share of the processor market, while 25% said it was Intel's partnerships, and 15% said it was technology and innovation.

When asked which of the two companies they believe will win the server processor battle in the long run, 41% said Intel, 11% said AMD, and 48% were unsure.

Froutan said there was a 50/50 split among current users of Intel and AMD-based servers who responded to the survey.

"We have so far pursued a dual processor strategy, but this will give us insight on the value of processor brands to our customers," he said. "It appears to us that AMD and Intel are at par in the minds of our customers, and given that, AMD's price advantage may win out."

Rackspace runs five hosted data-center operations in the United States and England. The company has about 17,000 servers installed in the centers and has annual revenue of about $160 million.0

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