Advanced Micro Devices (AMD) to break Intel monopoly

KOLKATA: California-based Advanced Micro Devices (AMD) is poised to break arch rival Intel's virtual monopoly over all major government computer purchases in India that add up to more than Rs 1,900 crore annually, a senior company official said.

Till now Centre and state governments have only bought computers loaded with Intel chips. For the first time, governments in Karnataka, Andhra Pradesh and Tamil Nadu have said they are willing to buy computers loaded with either Intel or AMD chips, said AMD India vice president of sales and marketing Ramkumar Subramanian.

This would create a level playing field between two of the world's top chip-makers in future IT hardware tenders at a time when governments are expected to buy computers worth nearly Rs 8000 crore in the next four years according to estimates by consultancy IDC.

AMD believes the decision by these three states is the result of its efforts to build awareness about its chips among government departments .

"Earlier nearly 80% of all government IT tenders across India were closed for AMD. Our efforts have now reduced it to 10-20%. These three states are among the largest spenders in IT implementation. A recent tender by Electronics Corp of Tamil Nadu has also laid down specifications for both Intel and AMD chips for the first time," says Subramanian.
But a share of government buying won't come without a fight for AMD as there is a chance it may trigger a no holds-barred slugfest between the two fierce corporate rivals.

Not only has Intel reaffirmed its international business practices as fair and lawful in India, it has fired salvo after salvo on rival AMD, decrying it as "an inconsistent chip supplier" and even accusing it of "blaming Intel for its own shortcomings".

Explaining the reasons for Intel's pole position, the company's spokeswoman said: "We can't comment on the assertions of others. But AMD has demonstrated that it is an inconsistent supplier and the market responds as you would expect.

When AMD executes well, it does well, but when AMD falters, as it has recently, its financial performance suffers. This is the result of AMD's own execution, not Intel's conduct. For six-to-seven years AMD has blamed Intel for all of its shortcomings and AMD has been asking the regulators and courts to prevent Intel from providing discounts to customers that ultimately benefit consumers. In short, AMD wants price protection. This is no way to benefit consumers and enterprises in India."

AMD's senior management obviously disagrees and is quick to rebut Intel's allegations. "State governments and clients that have opted for an AMD-powered PC are seeing both price and value benefit. We offer the right value for money products with full capability. The opening up of tenders will enable reduction in PC prices and will also enable users to judge the benefits," said AMD India's vice president Subramanian.

"The specifications of a Rs 1600-crore tender by Employees' State Insurance Corporation (ESIC) were changed immediately after we informed them about AMD's exclusion. It initially did not allow the consideration of AMD processors/platform. We are also talking to the Union IT and finance ministries to ensure a level playing field," he added.

But Intel asserts that its business practices are "fair and lawful" and will ultimately benefit Indian consumers. "No matter what venue you choose, Korea, the US, Europe or anywhere else, this is a case where the complaining party wants to prevent Intel from being able to provide price discounts," the spokeswoman said.

On AMD's claims of getting a foothold in government tenders, the Intel spokeswoman said the tenders usually specify 'Intel or equivalent'. "This simply reflects the widespread acceptance of Intel's products in the market. It in no way excludes others from competing. Multiple independent third parties like IDC and Gartner provide equivalency data to enable customers to make informed choices," she added.

Stating that Intel believes in a level playing ground for everyone, she said: "The company complies with applicable laws and always believes in competing fairly. Whilst an integral part of our value of customer orientation includes the goal to be vendor of choice, it is equally important for us to conduct business with uncompromising integrity and professionalism."