The Travesty Continues . . .

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In the on-going Opteron famine, a small consignment of freshly-made 144s were distributed to a number of retailers. They started off being sold at around $160, and those who had them either sold out, or jacked the price up to around $200.

Mind you, this is an item priced at $111 by AMD.

Just for comparison’s sake, the Model 148, which is priced at $213, is readily available for $225-240.

Every indicator we have so far says this is a matter of shortage. Those who would like to sell you one at a vaguely reasonable price just aren’t getting any. Only those who are willing to pay a ton for them from a distributor have any for sale, and they pass the extra cost (and no doubt lump on a bit more for their troubles) on to you.

Yes, this is a classic situation of supply and demand, so in one sense, this is perfectly natural.

However, the way supply and demand is supposed to work is that the higher prices created by demand is supposed to increase the supply.

And you can’t blame a distributor for not making more CPUs. There’s only one place to point the finger for that.

SAY Something!!!

What is AMD going to do? You know, it doesn’t take an MBA from Harvard Business School or Wharton to figure out that when people really want to buy something, you ought to make more of them, or you’d better have a really good reason not to.

Go here (about a third down the page, the post is from “Tank Guys” and you’ll see this:

Interestingly, I got a call from the sales manager for the opteron division at AMD this morning. Apparently, we showed up on thier sales report as one of the top sellers of opteron’s this quarter.

Anyhow, he confirmed the story that retails are likely not shipping anymore, or at least will slow to a trickle. He also mentioned that OEMs will be all but impossible to find. He referred me to the recent cooperative agreement between supermicro and AMD, wherein supermicro is now making barebones server systems using the 939 opterons. Unless some of these chips leak to the grey market, it’s entirely possible that the only way to source them in the future will be to buy them in a barebones server solution.

That would seem fairly conclusive under normal circumstances, but look on the same page, and different people are being told much different things. There are ETAs for these chips at quite a few websites, and they’re all over the place.

What Is Going On Here?

About a week ago, we speculated about this shortage, and concluded that there was likely a little civil war going on between the Opteron and the A64 sales people.

Nothing that sales manager purported said contradicts what we said.

You know, that had to have been a pretty bizarre phone call. “Hi, I’m from AMD. Congratulations, you were one of our top sellers last quarter, but we won’t let it happen again.”

I mean, really, what kind of sales department would normally say, “Holy feces, Batman, our product is selling like hotcakes. We must put a stop to this!”

I mean, gee, who would ever guess that when you convert part of your product line to a mainstream socket, offer more than the mainstream line and charge less for it, mainstream people might want it?

No sales department would ever do this willingly. Somebody above them shoved this decision down their throats.

Comments like, “We’re not selling them anymore, or at least not too many,” sounds like somebody lost a fight, but is hoping to lay low and get around it later. Comments about Supermicro make it sound like they’re sucking the whole Opteron market dry (yes, the comment referred to only OEM chips, but retail chips are just OEMs with a fan and box).

Mind you, probably no more than some thousands of retail Opteron 939s have been gobbled up by hobbyists. The supplier cranked out close to ten million CPUs last quarter. What does this say about the extent or flexibility of AMD’s production capacity if they can’t handle Supermicro and a near-negligible retail market?

Under these circumstances, one can only recall Stroligo’s First Law of AMD Behavior: If they don’t, they can’t.

If I were running AMD, and if there were no production constraints, I would simply raise the “official” price of these Opterons to above A64 prices (while charging the server OEMs the same price), and crank out enough to meet demand. The extra revenue would go to AMD, not some distributor.

There’s no way I would cut off retail supplies, unless, and only unless, I couldn’t deliver the goods.

Of course, if that were the case, AMD would never admit that. “Ah Might Deliver” is not part of the AMD mantra.

If AMD gave a hoot about its retail customers, they would say, publicly, now, that they were pulling Opterons out of the retail market, and save thousands of people and dozens of retailers a lot of time, effort, and grief.

But they won’t. That’s why I always just laugh out loud whenever I hear Mr. Ruiz use the term “customer-centric” in one of his speeches. Not that he’s dishonest per se, but in his Motorola-trained mind, a customer is an OEM like Supermicro, or HP, or Dell.

It certainly isn’t any individual reading this. Think about it: if your local McDonald’s only sold Big Macs a couple hours a week and doubled the price when they did, would you think them your friend?

Speaking strictly for myself, I gave serious thought about buying one of these. I thought about spending the $230 or so for a 148.

But then I said to myself, “Why should I reward a company for botching the whole situation, then leaving thousands of customers and dozens of retailers scrambling and in the dark as to their future intentions?”

Not me. I didn’t introduce the product; I didn’t set the pricing. If you can’t deliver or make the necessary adjustments, or even tell me what your intentions are, then later for you.



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