Market forces Dell to use AMD Processors

After years of rumors, Dell is finally using AMD’s processors in a small segment of their offering. While it is true that the number of units shipped will be small the processors will be used in two of the most profitable segments: servers and high end gaming (via Alienware). Before this, Dell made a point of using a single provider for all their processors. It is fair to think that Intel was giving good discounts to Dell, but using a single provider can also have tremendous operational benefits because it simplifies the qualifications and testing process. What has fundamentally changed is that AMD is now a technology leader that simply produces processors with a very good value that even Dell can’t ignore. Simply put, it was hurting Dell’s business to ignore AMD’s technological advantage. Now the question is: can AMD continue to expand within Dell’s offering? I think that they will.