This week Mark Papermaster had a fireside chat with a few of us analysts on the topic of AMD’s remarkable rise from the ashes over the last decade.
Papermaster, who had a long career at IBM before stints at Apple and Cisco (including a landmark court case on employee non-compete clauses), joined AMD a decade ago as CTO.
Before Mark and CEO Lisa Su joined AMD, it had lost its way, having failed to perform to expectations over a long period. Its existence was at risk, and it was overshadowed by Intel on the CPU side and NVIDIA on the GPU side and failing to gain traction with ARM.
A great deal of the problem with the company was a lack of focus and a loss of talent that had occurred over the prior decade. But since then, AMD has roared back and become not only relevant but a Wall Street darling with predictable positive growth in both market share and financial results. Granted, this was helped by Intel’s near-decade-long stumble, but AMD is arguably stronger than the company has ever been, and shows no signs of slowing down even though the entire X86 segment is under heavy attack.
Let’s talk about what made AMD the success and how they set up for the imminent threats on X86.
Focus Leads to Success
One of the things that stands out with AMD is its tight focus on critical markets. While competitors were all over the map on new initiatives and crazy stuff (like failed TV shows), AMD kept its head down and focused on four things. Those four things were: PCs, Servers, Gaming Consoles, and semi-custom processors. As a result, AMD has advanced in PCs and Servers, dominates Gaming Consoles, and, for a while, nearly stood alone with its semi-custom efforts.
By keeping their focus tight and relatively uncomplicated, they could focus more on what their customers wanted, and they were better able to deliver against their promised commitments. They went from a company whose roadmap was a bit of a bad joke to the one you could almost bet your life on in terms of execution.
While it took years, they slowly rebuilt trust, and today they are one of the most, if not the most, trusted vendors in their space. AMD continues to be differentiated by both its willingness to do what customers want and its transparency on problems, which significantly reduced customer embarrassment while increasing loyalty.
See also: AMD-Intel Server Chip Competition Heats Up with New Epyc Processors
X86 Challenges
Two significant threats are coming to the X86 part of the computer industry. The first is the merger of NVIDIA and ARM, which could build on what Qualcomm did in the PC space with ARM and create a viable ARM server threat, and the second is the trend for cloud providers to design and produce their own processors.
Papermaster says AMD is on top of both threats and is more than willing to work with customers to use AMD’s unique expertise to advance the architecture of their choice. This policy is regardless of whether that technology is ARM or homegrown.
AMD’s commitment to sustained innovation isn’t tied to X86, but to what their customers want and need to do. They are willing to use AMD’s advanced processor experience and knowledge to enable the unique processor solutions that the most potent cloud providers appear to prefer.
AMD’s nearly unique ability to listen to and respond to customers remains one of the firm’s greatest assets and the behavior most of the customers I’ve spoken with most appreciate. It isn’t so much about AMD’s technology as it is about the firm’s trustworthiness and the belief that if AMD says it will get done, it will get done.
Focus and Flexibility
AMD had made a significant turnaround from where they were a decade ago. CTO Mark Papermaster and CEO Lisa Su have done an exemplary job repairing what was broken in the company and focusing on current and future threats. While there are troubled waters ahead for the company as significant customers continue down the build rather than buy path and ARM increases as both an opportunity and a threat, the company appears well-positioned to weather these storms by the nature of their customer and business focus.
In the end, AMD’s success appears to come from that dual focus and the corresponding increase in customer trust and loyalty that has resulted. IT vendors in general – indeed, any business – could learn from AMD’s focus and flexibility.
