AMD Channel Support Strategies

Advanced Micro Devices (AMD), was founded in 1969 and is based at Sunnyvale, California, US. AMD designs and produces microprocessors, flash memory devices, and other solutions for clients in the communications, computer and consumer electronic industries. The company has global operations in the US, Europe and Asia. In 2006, Fortune magazine ranked AMD among the ten most admired companies for innovation.

AMD believed that one of the best ways to enhance business was through channel partner support strategies with the objective of adding greater value to its customers. The other objective was to enhance and extend the longstanding partnerships with both hardware and software partners. AMD's channel support initiatives were based on three principles: create new customer value, complement existing partnerships, and localize the execution.

AMD implemented a tiered program structure as part of its channel support strategies. It included services and resources for partners at different levels in the channel. They included direct market resellers (DMRs), systems distributors, dealers, value-added resellers (VARs), solution integrators, and information technology outsourcers (ITOs). AMD emphasized the development of both transactional and collaborative relationships with its channel partners. Transactional relationships were developed through the AMD RetailPro and AMD Solution Provider Program. Collaborative relationships were developed through the AMD Commercial Channel Access Program that provided resources and collaborated with channel partners to identify and develop new opportunities and bring them to the market. The channel support programs were primarily web-based and aimed to improve the level of business of channel partners all over the world.

AMD RetailPro program was aimed at AMD retail partners who sold PCs, PC components and peripherals, and PC software. The program also targeted AMD retail partners who were in store management and technical support. AMD retail partners included ABC Warehouse', Amazon.com, Best But, Sears, Staples", Wal-Mart, and many others. The retail partners associated with the RetailPro program could access the latest AMD product information, training and sales tools. They could also participate in online promotions and win prizes for themselves.

The AMD Solution Provider Program was developed to meet the needs of resellers and reward them for their commitment to AMD. There were three membership levels in the AMD Solution Provider Program Member, Gold, and Platinum. Any reseller who delivered AMD processor based solutions to customers was eligible to become a 'member' in the program. Gold and Platinum membership was by invitation only.

The membership levels were determined by AMD based on criteria like the level of commitment and business development with AMD, the extent of alignment with AMD product and brand strategies, competency levels in selling AMD products, loyalty to AMD, etc. All members of the AMD Solution Provider Program were given additional benefits and privileges that helped them gain recognition and competitive

It is an online store in the US that sells products ranging from consumer durables, furniture, games & toys, computers to power tools.

² Best Buy, is a US-based online store that sells electronics, televisions, DVD players, home

audio, car audio, computers, cameras, music, movies, software, games and more.

Staples is a US based supplier of office supplies, office automation and office furniture products.

AMD Channel Support Strategies

differentiation. These resources could be accessed through the AMD Market Builder Web portal. The resources delivered to the channel members included e-news updates, quarterly marketing updates, product collateral and merchandising material, and online product training. E-news updates delivered the latest information on AMD products, programs, and promotions to the members. The quarterly marketing updates invited Gold and Platinum members to participate in Web-based communications with the AMD marketing team to evolve strategies for the next quarter. The product collateral and merchandising material provided by AMD assisted sales staff in explaining and promoting the key selling points of AMD processors and technologies. Gold and Platinum members enjoyed toll-free telephone access to AMD's technical service center. They also had access to evaluation samples and were given priority over other channel members. The other benefits of the program included resources for sales promotions and marketing as well as PR support. AMD also had an online technical support system, 'Ask AMD' that provided access to technical information for the channel members. The 'Commercial Systems Channel Portal' (earlier known as the 'Commercial Channel Access Program') performed various functions such as educating, communicating and acting as a collaborating forum between AMD and its channel partners. AMD constantly updated the portal with industry publications, market insights and customer success stories. The program also aimed to help AMD's partners in customer-centric innovation. AMD collaborated with world-class technology companies mainly to provide end-users with a greater array of technology solutions for their business. AMD had technology collaborations with Microsoft, Oracle, IBM, HP, Sun Microsystems, EDS, Novell and a host of other companies.

In 2001, HP decided to expand its collaboration with AMD to build better and more powerful servers and workstations. The collaboration resulted in HP introducing the new industry-standard ProLiant servers featuring the AMD Opteron processor. According to Paul Dodd, worldwide commercial marketing manager for AMD, "The combination of Hewlett-Packard's superior ProLiant brand and the technologically advanced AMD Opteron processor has eliminated many performance and technical bottlenecks and opened up new opportunities for the customer to solve their toughest business challenges. ⁴

Similarly, in 2003, IBM introduced the eserver 325, the first AMD Opteron processor based server, followed later by the second generation eserver 326, and the AMD Opteron processor based workstation the IntelliStation A Pro a powerful workstation suited for tasks such as product design and chip manufacturing. Later, in April 2005, the second generation IntelliStation A Pro 6217 was also introduced.

Sun Microsystems' and AMD's strategic partnership led to Sun Microsystems launching its first AMD Opteron processor-based product, the Sun Fire V20z server, in February 2004, followed by the Sun Fire V40z , its second AMD Opteron processor-based server, in July 2004. The server featured up to four Dual-Core or single-core AMD Opteron processors, and provided excellent performance, reliability, flexibility and serviceability. Commenting on their relationship with AMD, Paul Read, Director of Outbound Marketing for Sun Microsystems, said "We wanted to integrate processes all the way through the product life cycle. We wanted to move from a supplier relationship to a strategic alliance. ⁵ According to AMD's commercial marketing manager, Frank Varela, "AMD is able to expand sales, Sun is able to produce superior products and customers receive greater value for their IT investments. ⁶

Carter F. Smith. "HP Driving Innovation."

Lara Hata. "Sun: Eclipsing the Competition".

⁶ Lara Hata. "Sun: Eclipsing the Competition".

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AMD followed a similar strategy of focusing on channel development through channel support strategies in India. When AMD entered India in 2001, it did not have a strong distribution. The early years were spent on developing a sound distribution network through channel partnerships. The company organized several meets targeting the Chief Information Officers (CIOs) of companies in partnership with its channel partners. With this, AMD grew by 100 percent in 2003 over 2002⁷. In early 2004 , AMD rolled out the AMD Authentic Associate Program (AAA) targeted at more than 1000 system integrators, resellers and dealers across India. As a part of this initiative, AMD provided web-based training, technical support and after sales service to its resellers along with incentives depending on the sales. In July 2005, AMD conducted a training program for all its channel partners and system integrators in 19 cities across India. The objective was to develop a network of well educated system integrators by sharing of resources and information. According to Haresh Bharia, National Distribution Manager, AMD India, "This event aims to bring together various AMD partners, who along with AMD will help empower the channel to broaden their service offerings. As a part of our India mandate, AMD interacts with the channel on a regular basis, to provide better support to channels and broaden the scope of the AMD64 adoption in India."

Question for Discussion:

1.Discuss AMD's efforts to maintain and improve transactional relationships with its channel partners.