In a push to appeal to what the company sees as a growing number of costconscious federal PC buyers, chip manufacturer Advanced Micro Devices Inc. (AMD) launched a program to increase its presence in the federal market. The Government Connection program combines an initiative to educate agencies a
In a push to appeal to what the company sees as a growing number of cost-conscious federal PC buyers, chip manufacturer Advanced Micro Devices Inc. (AMD) launched a program to increase its presence in the federal market.
The Government Connection program combines an initiative to educate agencies about the types of processor technologies that are available with an initiative to teach AMD's channel partners how to sell to federal customers. The program is almost a form of consulting, said Bob Myers, former field marketing manager for government and education at AMD and the man tapped to head the new program.
AMD will work with agency workers and chief information officers to teach them not only about AMD technology but also about PCs in general. "That way an agency will not be pigeonholed into going in only one direction" when they write their bids, Myers said.
"They have a challenge to get to the market and educate them, and we will be helping them with that," said Will Workman, business developer for Navy programs at Federal Data Corp., Bethesda, Md., which is an AMD federal partner. "We're helping AMD's entry into this market because of their compelling technology...and we can demonstrate that it is a compelling alternative [to the Intel Corp. Pentium], certainly in the sub-$1,000 market."
AMD is one of the major chip manufacturers trying to cut into Intel's stranglehold on the processor market by working to its own strengths. This includes committing to the current Socket 7 form factor used in most recent chips developed by Intel, AMD and Cyrix Corp.— including Pentium— instead of the new Slot 1 architecture Intel has used with its Pentium II chips. AMD also is trying to make chips at lower prices, which has made a dent in the consumer market.
Government Connection is intended to get out the technical facts about these differences so that a bid is not written with a name-recognition bias built in, said Rick Indyke, AMD federal channel sales manager.
"What we're going to do is give people choice," he said. "I've seen government bids with requirements for Slot 1" because they believe that architecture provides better performance even though that is not always true, Indyke said.Myers said AMD's goal is to have 10 percent of the federal market by the end of 1998 and 20 percent to 25 percent by the end of 1999. This is an aggressive goal, but one that could be realized, according to analysts, because of the price advantage.
"I think their chances are very much dependent on how well they can convince the federal government it needs to save money," said Nathan Brookwood, microprocessor analyst at Dataquest, San Jose, Calif. "Clearly the AMD processors represent the better value [in the desktop market]."
"They may capture 50 percent market share," Workman said. "[In the next two years] they have a chance to move past Intel in the sub-$1,000 market."
Another weapon against name-recognition bias are the partnerships with vendors and resellers such as IBM Corp., Compaq Computer Corp., Acer America Corp. and other big-name computer manufacturers. "Executives are willing to take some risk but not all of it," Indyke said, explaining that they will take a chance on either the company or the architecture, but not both.
AMD also is hoping to sweeten the choice with its new K6-2 processor that has 3DNow! graphics technology. For government users, the new technology will be useful in any floating point-dependent application such as fingerprint recognition, Indyke said. "You can feel comfortable knowing that down the line you have made an investment that will be valuable to you," he said.
AMD has set up the Business Development Center, or bid desk, as a one-stop place accessible by phone and e-mail. Here the company will provide information and assistance to help agencies refine their bids and evaluate their needs as well as help vendors "become aware of all bid opportunities," Indyke said.
Government Connection is expected to launch a dedicated World Wide Web site this week that can be reached through AMD's main page at www.amd.com. The open section for agencies includes information on AMD and the company's technology, AMD partners, and what systems are available.
"AMD is committed to this market, and we are not a small company," Myers said. "There is no need to fear obsolescence."
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