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newsmaker Open standards and the consumer market are on the cards for AMD as it looks to grow its business beyond the microprocessor.
The chipmaker recognizes that the consumer market will grow to eclipse the enterprise market, in terms of "absolute dollars", in the near future, according to Henri Richard, AMD's executive vice president and chief sales and marketing officer. To prepare for this turn, the company in October 2006 acquired ATI to expand its portfolio of intellectual property (IP) that will help the "new AMD" become more "attuned to consumer electronic needs", Richard said.
ZDNet Asia caught up with the AMD executive to find out what this direction means for the company's enterprise and consumer customers, and how they can benefit from the chipmaker's mantra in leveraging open standards to boost its technological innovation.
Q: How can open standards in the computing platform accelerate innovation in the technology field?
Richard: Open standards allow for open competition, and that's why it's good for innovation. It allows you to have a rich ecosystem with many companies competing on the account of standards and breeds a cycle of innovation that's a lot faster, and ultimately, the customers will benefit from there.
I think open standards are very important but of course, with open standards sometimes comes the burden of a little less stability. Closed architecture by definition is more controlled, but in the long run, it's very important to maintain this open standard approach because it allows people who have a lot of creativity to compete against each other, to bring better solutions to the market and for the customer.
If you think about it, anytime you have a closed standard--which is exactly what Intel wanted to do with Itanium--you create an ecosystem that you completely control, where nobody can play. And so, it doesn't matter if the solution is great or not as it's protected from the reality of the marketplace.
What does this mean for enterprise customers and consumers?
The enterprise side is probably a slightly different situation from the consumer side. On the enterprise realm, open standards have really brought a profound change with servers that are now based on industry standards, and slowly but surely, will bring an end to proprietary architecture. Large Unix systems and mainframes are slowly losing market share, and the industry-standard server on the x86 instruction set has really been growing and continues to grow.
What that has brought about is essentially cheaper, faster computing, which allows enterprise customers to deploy more applications with the same budget. It also fosters competition amongst companies, and really made the IT department a strategic weapon at the disposal of the CEO of any large company.
Proprietary standards and infrastructure were really not enabling the same type of dynamic innovation that you would see on servers based on industry standards. The benefit essentially has been one of greater computing power at declining costs, allowing companies that want to invest strategically in that tool to make a difference in their business.
I think at the consumer level, what's going to change significantly in the future is the role of the PC, which was originally designed by engineers, for engineers, and essentially to compute. But when you look at what people do today with the PC, they don't just use it to compute. Instead, they watch movies, listen to music, create videos and browse the Net. In many ways, it's become a portable multimedia center, much more than a computing engine.
For consumers, increasingly, innovation will be focused not on features and functions of the silicon, but more on delivering differentiated user experience. This will involve technologies that go beyond the microprocessor and will encompass video and audio technologies. That's why we did the ATI acquisition.
Our vision is that the processor will continue to be an important part of the PC platform, but increasingly, the graphics processor, the video capabilities and the sound capabilities will be an important part of the equation.
A generation from now, people will not buy the PC like I used to--which was kind of a one-size-fits-all, and where the choice you had was basically the color of the chassis and the weight of the computer. There was very little differentiation. Even today, when you walk into a store, you look at 10 notebooks and they pretty much all look the same and do the same thing.
My prediction is that, 10 years from now, you'll have highly differentiated platforms that are more tailor-fitted to whatever you want to do with it--whether you're somebody who does a lot of You Tube, or you want to be constantly connected with your friends from around the world on MySpace.
Those usage models are very different from the initial 'I buy a PC to do Excel spreadsheet' type of model. We're very excited about the opportunity because those are laterally moves that will allow us to innovate outside of the traditional microprocessor performance race. And again, open standards, combined with a lot of different competitors coming out with great ideas, will benefit the end-user.
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