Market Shakeups: Palm Gets Windows, AMD Takes Fight to Intel

Two historic events occurred last week that have the potential to change the future of personal computing. The first, and probably the most dramatic, was Palm adopting the Windows Mobile platform for its market-leading Treo communicator. The second, while less dramatic, is nearly as powerful: that was AMD rolling out stable platforms with both Nvidia and ATI.

AMD vs. Intel: The Biggest Punch Yet

Earlier this year AMD took Intel to court alleging Intel had illegally locked AMD out of the market. This was something that had been discussed by major players for years and AMD had finally had enough. However, the truth is, part of the problem AMD has had historically in going after large business was the lack of a “stable” platform, which is a requirement by most large companies.

A stable platform is one that doesn’t change for at least 12 months. Large companies require it because they typically do rolling deployments. A rolling deployment is one where you have a group of full time folks replacing PCs over a long period of time and, where this is institutionalized, the firm constantly replaces PCs year after year. Because the firm has to test applications, lots of patches and utilities, they want to minimize the variances in the machines they are installing, and they clearly would like it if those machines didn’t change for as long a period as possible.

With security now a top level concern and some security systems, like the ever more standard Trusted Platform Module, now installed in hardware, anything more than a 12-month cycle would probably have a security tradeoff that may, under certain circumstances, be unacceptable.

Until now only Intel had a stable platform initiative and as a result, it remains well trusted in the enterprise. Nvidia and ATI have just announced, however, that they, too, will be providing stable platforms upon which AMD processors can reside. This brings up another issue which could work for, or against, AMD.

On the “for” side, a buyer now has a choice between stable platforms using the same core processor. If ATI is having issues in terms of meeting timelines or quality standards you can switch to an Nvidia-based system but still retain AMD’s core value. If you’re using an Intel-based system, you’d be impacted by any problems with Intel, but a switch would create other, new problems. One of those is backwards compatibility. While very strong on ATI or Nvidia, it is virtually non-existent between the AMD and the Intel platform. If you were to make a switch, your ability to create one image that would work on both current and historic systems would be gone. You’d retain that ability if you were simply to stick with any one vendor, which could be a big factor for many involved in making this decision.

Remember, we are dealing with a conservative audience. Intel is a known entity in this regard and ATI and Nvidia are not. Still, AMD has been making huge inroads into even more conservative server deployments and that should open doors that had been closed before.

Open Architecture Effort

To help this along, a grassroots effort has sprung up to promote open architectures, led by Mark Moore out of Austin, Texas. The effort is demonstrating that by including AMD systems in a bid you may find that you can save in the neighborhood of US$100 per machine. (Some kind of savings is likely to occur even if you end up choosing an Intel-branded product because the pressure will be increased on the OEMs bidding on the deal.)

To give you an idea how important $100 per machine is, take a large deployment of 100,000 systems. That’s a $10 million capital savings which could be used to buy thousands more PCs or for other capital projects that would otherwise go unfunded. And for large companies, 100,000 systems is not that unusual in a multi-year bid. Governments, in particular, are solidly focused on multi-vendor bids and on saving money. They may find this benefit way too attractive to ignore.

Gateway Makes Huge AMD Move

While there is no direct connection between the AMD stable platform move and the complete AMD line Gateway launched last week, it does showcase Gateway as the most aggressive of the AMD-partnered vendors right now.

What Gateway announced was, under the eMachines brand, the most complete line of AMD-based products available in the U.S. market. The line offers a strong value proposition and prices ranging from $800 for a very nice notebook computer, to an amazing $389 for a desktop PC that, with the exception of a monitor, is incredibly complete.

For that price — and this is kind of amazing — you get a 64-bit processor, a 100 GB drive, a CDRW/DVD combo drive, and an 8-in-1 media reader for your camera’s flash cards. You even get a $50 rebate making the price to you a total of $339. This is the T3104. I’d pay the extra $60 and get the next model up — the T3302 — which, after rebate is about $400. But either of these machines would be fine for the vast majority of us. Isn’t it amazing how much you can get for $400 these days?

They even have a 17-inch flat panel LCD monitor for $269 after a rebate and I still have a similar product I’m using that cost me $3,000 not so long ago. This is one of the things I love about the tech market: Prices actually go down, not up. While no OEMs have yet announced around this effort Gateway would undoubtedly be on the short list and the values could be amazing.

Palm Goes Microsoft

Last week’s move by Palm is as amazing as Apple going Intel and almost, but not quite, leads me to speculate that Apple will make a similar move in a few years.

Palm, which has its roots in Apple’s old Newton platform, was initially conceived to be more like Sun and Apple than what appears to be most successful in the current technology market. They later realized that this severely limited them against Microsoft because, just as IBM had discovered with OS/2, they couldn’t get the critical partnerships needed to move into large business.

They then decided to separate the company into two units, something we tried and failed to do at IBM, (I was on the team pulling to spin out the IBM software unit — and I still think we could have kicked Microsoft’s butt had we been successful). The resulting entities were a software unit called PalmSource and a hardware unit called PalmOne.

Platform Race

From then on it was kind of a race. Eventually the hardware unit would need to adopt an additional platform (Symbian, Linux or Microsoft) and the software unit would have to add large customers if either was to be successful. PalmSource had some minor wins but never was able to capture any large players to a degree that either Microsoft or Symbian had, and PalmOne stayed exclusively Palm. Then Sony, PalmSource’s other big player, failed in the market and exited, effectively putting PalmSource on deathwatch, forcing them first to sell their name and then their independence.

PalmOne became Palm and they finally adopted the second platform choosing Microsoft, at least initially, over the other two. With the decline of PalmSource, PalmOne had increasingly been doing the value-add work on the OS anyway and realized that they could take the Microsoft platform, use their existing skills and suddenly get access to Microsoft’s extensive sales network and its resources.

With Apple’s most successful product to date, the iPod, representing the company’s first true Windows offering, you can’t help but look at Palm’s path and wonder if it will be representative of the path not traveled by Apple. In the end, for me, that’s what makes this so interesting because by watching both Palm and Apple you can likely see the outcome of both sides of a decision and we don’t get that perspective very often — in fact, almost never.

All in all, last week was a powerful one, and included the most powerful blended attack on Intel’s dominance I’ve seen yet, as well as the news that two mortal enemies were becoming partners. After the Sun/Microsoft announcement, the Apple/Intel announcement, and this most recent Palm/Microsoft announcement, this was starting to sound like a very warm and fuzzy year. Now, AMD is clearly reminding us that not everyone is feeling that way. Doesn’t all of this make you wonder what’s still to be announced this year?