I Love The Dead

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More than a few are getting wound up about this Fortune article.

In it, the IBM executive in charge of servers says he believes that in five years, there will be only two players in the high-end microprocessor business: IBM and Intel.

Obviously, that leaves out three letters: AMD.

This leaves its advocates wondering if IBM might be engaged in homocidal necrophilia, leaving AMD saying at some point, “Et tu, IBMus?”

They Didn’t Get Married

AMD and IBM made a business deal, not a marriage.

The business deal involves their two teams working together on chip technologies like SOI, copper interconnects, and low-k dielectric insulation. These are technologies they both have to work on, anyway, and two heads are better than one.

Then these technologies will be taken out of the lab, and used to try to beat the hell out of each other (and anybody else).

So? This is business, not high school.

Take any PC standard. Let’s say memory. The memory manufacturers get together in JEDEC, work together on new standards, take those standards, and then try to beat the hell out of each other.

Those memory guys don’t collaborate because they love each other. They collaborate because having a single standard benefits all the competing parties.

IBM with the greatest sincerity can work with AMD on the technology. They can later agree to fab chips for AMD, too. But why should IBM give up making its own chips into which they’ve poured in tons of money? It will certainly make a lot more money if their chips are very successful than anything they could possibly make from AMD.

The answer is: they wouldn’t, and if AMD insisted on all that, there would be no deal, and AMD would have to spend more money to do the same thing.

“I Think” Doesn’t Equal “It Will Be”

This IBM exec seems to think AMD won’t be around in five years in this business. I bet you know people you don’t think are going to be around five years from now, either. Does that mean you’re out to kill them?

Of course not. Homicide is not the only cause of death, you know. You just don’t think they’re in good enough shape to last another five years and that something else is going to get them.

Let’s say this person sells newspapers and magazines. Would you refuse to buy today’s or tomorrow’s paper because you don’t think he’s an outstanding longevity candidate?

If you sold computers, and he came to you to buy one, would you refuse to take his money because, “you’ll die before this computer?”

If you were the said short-lifer, would you refuse to buy from anyone who thought you weren’t going to be around a long while? Well, maybe, but would you think the believer is out to get you?

No, of course not. You can complete the transaction long before the Grim Reaper shows up, and in any case, nobody knows for sure he’s even going to be timely.

On the other hand, if you’re a ninety years old multimillionaire, and some twenty-ish Playboy centerfold wants to marry you, you have to believe she’s done some actuarial calculations first. At that point, you may not care because you’ve done them yourself and are going into this eyes wide open.

If you were sixty-five, though, you might wonder then if the proposed beloved might want to hurry those actuarial calculations along.

If you’re looking at the world from IBM’s perspective, you have some good reason to believe AMD isn’t going to make it. Just the escalating costs of fab plants alone would and should make one fairly skeptical about AMD’s continued survival.

But skeptical doesn’t mean certain. This fellow obviously thinks the world is going to go a certain way, but I bet he’d be the first to admit that he could be wrong about that, and if he turns out to be wrong, his first step is not to get corporacidal about it and start pouring in anthrax into the Opteron dies.

If you think that, you’ve been watching too many Hollywood movies.

There’s No Loyalty Here

Business deals are a matter of mutual convenience. They aren’t blood oaths, they aren’t marriages. There’s no pledge of allegiance or loyalty oath required. There’s no “till death do us part” or “for better or for worse” (well, not unless it’s spelled out precisely in the contract).

IBM signed themselves a business agreement, not into AMDroid slavery. The contract doesn’t require that IBM love AMD or even like them. The real world doesn’t work that way. If every business deal required unconditional love, we’d all be starving to death.

The only situation in which this fellow’s beliefs should really raise AMD’s cockles would be if IBM had become the one and only distributor of Opterons. If that were the case, these comments would be cause for more than concern, but that’s not the case at all.

There seems to be a sense in some of the commentaries that “IBM hurt AMD’s feelings,” like this were the worst thing in the world. Let me tell you something, when serious money is at stake, nobody in the real world gives a rat’s ass about your feelings, and you’d better not, either.

Any AMD employee who told his boss, “I can’t work with IBM anymore, they hurt my feelings,” would likely become an ex-AMD employee.

And if AMD’s feelings don’t count, AMDroid feeling count even less.

From what I see, the only chance IBM has to being the evil corporate suit to AMD would be for AMD to not have any alternatives for 65 or 45 nanometer fabbing, and IBM putting the screws to them. It’s doubtful AMD will let itself get into this situation if they can at all help it.

Because AMD knows IBM doesn’t have to love it, and so should you.

Email Ed

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