AMD Restructuring Creates 'One AMD'
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Three years and more than $2 billion in write-downs after its expensive purchase of ATI Graphics, Advanced Micro Devices has reorganized the company around what it calls "one AMD," giving it a single message to take to customers.
In the process of restructuring the company, however, a well-liked and respected executive -- once considered a possibility to become CEO -- has left the company.
Even though AMD (NYSE: AMD) has talked up being a single-source providers of a total package of CPU, chipset and graphics, it hasn't really had a go-to-market strategy in place, observers said. The GPU group would meet with an OEM like HP (NYSE: HPQ) or Dell (NASDAQ: DELL), then the chipset group would come in, then the CPU group would come in.
"They've been a joined company under one banner but had two independent operating divisions. Now it will be a truly unified, vertical company and a very powerful one because of all the stuff they have," Jon Peddie, president of Jon Peddie Associates, told InternetNews.com.
This new structure changes the structure by creating four new groups based around broad categories instead of individual products. The new Advanced Technology Group will be focused on developing the next-generation of x86 and graphics technologies.
The customer group, led by Emilio Ghilardi, will handle AMD's global customer relationships. There will also be a consolidated marketing group to offer a consistent message that covers all of AMD's products, rather than each group marketing its own parts.
Finally, a new group will be created to align all of AMD's graphics and microprocessor product development groups into a single unified organization. It will be led by Rick Bergman, an ATI executive.
"It makes them run more efficiently and be more responsive to their customers. The one voice to the customer is really critical and that was the one thing they weren't taking care of that they are right now," he added.
Jim McGregor, senior analyst with In-Stat, added "I'm surprised they didn't do it earlier. You can say this was long overdue, especially with them buying ATI. It's kinda disappointing they haven't leveraged the value of ATI to date. They don't go out and promote both simultaneously, other than the Spider and Dragon platforms."
Peddie said he's been after AMD to make these changes for a while but the company was in no shape to do it. "It's hard to remember to drain the swamp when you are up to your ass in alligators. They had to get rid of those alligators," he said.
Those gators included changing CEOs, with the resignation of Hector Ruiz last year, the disposal of the foundry business as a separate company and getting the way late Barcelona processor out the door.
"It was a matter of priorities, and obviously there were priorities. The ATI purchase only created more financial problems. I would definitely say it was a matter of priorities. Now it's a matter of survival. Now they have to be focused and execute," McGregor said.
The restructuring has one unexpected element: the departure of Randy Allen, senior vice president of the Computing Solutions Group.
AMD spokespeople were not available for comment, and the company said only in announcing his departure that the company wished him well. Both Peddie and McGregor were surprised at Allen's departure and effusive in praising him.
"They didn't want him to go," Peddie said. "The reorg capped his opportunities for further advancement and development at the company. They might have made some phony-baloney job for him but he's not that kind of guy. And he's not going to be out of a job very long."
McGregor had figured Allen would be the next in line to replace current CEO Dirk Meyer, even if the Barcelona processor "was a bit of a fiasco."
"He's one of those guys who was well-liked throughout the organization and has a long history there," McGregor said. "He just comes off as a Boy Scout. You just gotta like the guy. I'll bet he had multiple job offers by the end of the day."
Following the AMD/ATI merger, Bergman served as senior vice president and general manager of the Graphics Product Group (GPG), where he brought a number of successful graphics products to market. As senior vice president of AMD, Bergman now has that same duty across all product lines.