The Zen CPU microarchitecture has been a resounding success for AMD, and that winning streak is likely to extend with the release of the company's third-generation, 7nm Zen 2-based Ryzen 3000 processors. However, although AMD has been making inroads by carving deeper into Intel's share of the processor market, it hasn't been a knockout punch.
According to HP Inc. CEO Dion Weisler, much of the trepidation in shifting to AMD processors comes from its commercial customers that tend to be more on the conservative side with respect to processor choice. These customers have been reliant on Intel for so long that they are pretty much programmed into thinking that there is no other comparable solutions on the market that will give them the performance and reliability that they need in a corporate environment.
"It's hard to change commercial behavior because for the longest time Intel has done an incredible job in the commercial space of selling the value proposition of Intel," said Weisler while speaking at Bernstein's 35th Annual Strategic Decisions Conference. "And in many cases, it may be a superior product."
According to Weisler, many PC manufacturers -- including HP -- are still experiencing Intel CPU shortages, which means that it's a prime opportunity to educate its customers on AMD platforms and what potential advantages they could have over Intel. "But commercial customers had made a decision, in times of extended shortage, a customer then has to choose between do I have nothing or do I give this a try," said Weisler. "And when, I give it a try and that’s good experience, barriers have now been broken."
He went on to add that persuading regular consumers to pick a system with an AMD processor is relatively easy as they "don't really know, really often care what's inside", but it's a harder sell for commercial customers.
But here's the kicker according to Weisler, "It’s not impossible to convert commercial customers, it’s a lot easier doing times of shortage, but when they convert, they become a big part of your mix."
HP has had success shifting its commercial customers to AMD Ryzen systems, and that push should be even easier with AMD's value-laden Ryzen 3000 processors, which officially hatched last week. AMD is promising big IPC gains with Ryzen 3000 compared to its Ryzen 2000 processors, and is offering up to 12 cores in the form of the Ryzen 9 3900X. AMD's pricing on its chips are still undercutting Intel by a fair margin, translating into lower overall systems costs which is always a contributing factor to commercial customers that are going through big upgrade cycles on workstations.
Intel isn't expected to get a firm handle on its CPU shortage situation until well into the third quarter, which means that AMD has a prime opportunity to gain more market share. According to Mercury Research, AMD had a 13.3 percent unit share of the overall x86 market in Q1 2019, which was up from 8.6 percent in Q1 2018.