AMD's Ryzen 3000 Fight Against Intel Opens Big Channel Opportunities

'Intel no longer just dominates in every aspect,' one system builder says of AMD's new Ryzen 3000 processors for the client market, adding that they provide 'an immense amount of value at any price point' against Intel's ninth-generation Core processors.

AMD's new Ryzen 3000 processors give the underdog chipmaker a new edge against semiconductor giant Intel and will create new opportunities for the channel in the client market, solution providers said.

The Ryzen 3000 family brings price-performance advances that are bringing AMD some attention against its larger, market-leading rival, according to solution providers.

"Intel no longer just dominates in every aspect," said Wallace Santos, CEO and Maingear, a Kenilworth, N.J.-based system builder that sells Intel- and AMD-based PCs for the enthusiast market. He added that the new 7-nanometer CPUs from the third-generation Ryzen desktop lineup provide "an immense amount of value at any price point."

[Related: What To Expect From AMD's 7nm Roadmap In 2019]

The increased competition Intel is facing from AMD hasn't been lost on Randy Copeland, CEO of Velocity Micro, a Richmond, Va.-based system builder that sells Intel- and AMD-based PCs and workstations for the enthusiast and commercial markets.

"It's no longer a foregone conclusion that people should buy Intel anymore," he said.

Copeland said he expects AMD’s new CPUs will steal workstation market share from Intel's X-series CPUs and AMD's own Threadripper, both of which target workstations with higher core counts at premium prices. Overall, Copeland expects AMD's share of Velocity Micro sales to soon reach more than 40 percent, which he said, "is obviously a huge shift."

AMD's rising tide isn’t lost on Intel either. In an internal analysis that recently leaked online, Intel called AMD a "formidable Intel competitor" that poses a larger threat to the company than it has in years, in part because of the new Ryzen 3000 series.

"We will be facing tough competitive challenges," Steve Collins, a director in Intel’s Performance, Power and Competitive Analysis group who monitors the competitive environment, said in the June 24 analysis, which an Intel insider told CRN was posted to the company's intranet as a blog post.

Intel declined to comment on the blog post.

While AMD's new processors are largely aimed at the enthusiast market, the broader channel should pay attention as it could give them a new way to compete with other resellers, according to Patrick Moorhead, president and principal analyst at Moor Insights and Strategy.

"This is a huge business opportunity for the channel, and there's going to be a tremendous amount of business to be had between now and the holidays," said Moorhead, a former AMD executive.

But perhaps more importantly, solution providers said, AMD's new desktop products are creating more competition in the client market, which will ultimately benefit everyone, even Intel, which is targeting a much larger addressable market with its data-centric platform strategy.

"I think AMD and Intel pushing each other is a good thing for everybody involved," said Kent Tibbils, vice president of Fremont, Calif.-based ASI, an authorized Intel distributor that also resells AMD parts as a partner. "I think the channel does its best when the technology is moving forward and they have the opportunity to go in educate their customers on the value of that technology and why it's needed. It becomes much harder when it's stagnant," the executive added.

AMD Challenges Intel On Core Count, Price

AMD's Ryzen 3000 processors are challenging Intel's ninth-generation Core processors mainly in two areas: core count and price. Comparing their top CPUs in their respective lineups, AMD's Ryzen 9 3900X comes with 12 cores for $499 while Intel's Core i9-9900K comes with eight cores for $488, which puts AMD ahead of Intel from a price-per-core perspective.

"We are thoroughly impressed and really happy with Ryzen 3000, especially the 3900X. That's right in the wheelhouse of what our customers are looking for," Velocity Micro's Copeland said. "It finally gives customers a viable choice to the 9900K, so we like that there's some competition here."

Where the Intel Core i9-9900K still shines is single-core performance, with its single-core boost clock speed of 5.0 gigahertz, which is well-suited for gaming, Copeland said. But the AMD Ryzen 9 3900X isn't far behind with its 4.6-gigahertz boost clock speed, and by having more cores, it can serve as a better processor for multi-tasking and workstation applications that benefit from higher core counts.

"So many cores at a comparable clock speed to Intel is just a real game changer," Copeland said.

The other processors in the AMD Ryzen 3000 lineup range from the Ryzen 7 3800X, which comes with eight cores and a 4.5-gigahertz boost clock speed for $399, to the Ryzen 3 3200G, which sports four cores and a 4.0-gigahertz boost clock speed for $99. Aside from the two lowest-entry models, the Ryzen 3000 series comes with higher caches and support for PCIe 4.0 connectivity, an industry first.

"You're no longer buying AMD because it's cheaper; you're buying because there's more value in buying it overall," Maingear's Santos said.

Ryzen 3000 Will Help Drive 'Tremendous Refresh Cycle'

The launch of the Ryzen 3000 series, as well as new graphics card lineups from AMD and Nvidia, is renewing excitement in the client space, particularly on the enthusiast side, which solution providers said will drive a major refresh opportunity for the second half of the year.

"It's going to drive a tremendous refresh cycle," Copeland said, adding that the newly released products prompted Velocity Micro, which has $25 million in annual revenue, to increase its internal forecast for 2019 by up to 15 percent.

Moorhead, the analyst, agreed that AMD's Ryzen 3000 launch will give a big boost to the client space.

"I think that everybody would agree there's a lot more excitement in the consumer desktop space than there has ever been in years," he said.

But it's not just the consumer space that is getting a boost.

In the commercial space, Moorhead said solution providers will see opportunities to tout AMD's Ryzen 3000 processors to customers seeking meaningful performance improvement to video editing, software development and even mainstream productivity software.

Between the consumer and commercial markets, the analyst said Ryzen 3000 presents an opportunity for solution providers to differentiate themselves in an Intel-dominated market.

"I think it’s an opportunity for smaller system builders to lean into AMD to pick up incremental business" against other resellers that lead with Intel, Moorhead said.

AMD Still Has A Lot To Prove In The Channel

While AMD is building excitement in the field, the company has a long way to go in order to win broad support in the channel, according to solution providers.

Intel has built up a strong history as a channel-friendly vendor, a reputation that AMD simply does not share, solution providers said.

"Intel has always maintained a good channel structure and support level, even for smaller resellers," Tibbils said. "So no matter who you are, your size, your volume, you have a good support structure from Intel."

Tibbils said AMD should "fully embrace distribution" as distributors would be key partners in building support within the channel, an area where Intel has a strong track record.

One of AMD's challenges is that it is a smaller company than Intel, whose recent leaked blog post boasted that its team of 15,000 software developers alone is larger than AMD's entire workforce.

"Candidly speaking, they have limited resources. They don't have the sales structure of Intel," Tibbils said of AMD.

AMD declined to comment on its channel efforts, citing a quiet period before its second-quarter earnings on July 30.

According to AMD's website, the company works with four of the largest U.S. distributors — D&H, Ingram Micro, Synnex and Tech Data — though D&H is listed as not selling AMD's processors for servers and PCs. The chipmaker also distributes through Exxact Corporation, Intcomex and New Age Electronics. AMD's online Partner Hub lists several resources for partners, including sales tools and marketing materials, training and webinars, merchandising kits and case studies for commercial markets.

Tibbils said another area where AMD will need to prove itself is longevity, which has been another strength of Intel. The executive said since the Ryzen product line is still only a few years old, AMD may still have some difficulty getting in with enterprises who have long relied on Intel.

"I was just on a conference call last week and was surprised how many times I heard that come up," Tibbils said. "Someone mentioned that nobody ever got fired for buying Intel."

How Intel Plans To Position Itself Against AMD

As Intel sees it, its rivals are going to have to do a lot more than add a few flashy chips to their portfolios in order to have a compelling story to tell channel partners and customers.

"There's a lot of noise in the market about point technologies or 'this benchmark.' We are telling a much more comprehensive platform story that we think is critical to where the market is going," Kimrey, Intel's general manager of U.S. channel scale and partners, told CRN in a recent interview.

Intel's expanded portfolio now addresses a nearly $300 billion market opportunity, Intel CEO Bob Swan told investors in May. That dwarfs the $50 billion market opportunity the company had touted a few years ago.

Intel’s “fully integrated platform strategy” paired with its decades-long channel commitment is an unbeatable combination, Kimrey said.

“It's the underlying foundation for our partners' data strategy,” he said. “I may be biased, but I wouldn't place my bets anywhere but with Intel.”

In Intel's recently leaked analysis, the company said its "secret sauce" to competing against AMD "is not a single ingredient" but rather six pillars of innovation — process, architecture, memory, interconnect, security and software — which were introduced at Intel's Architecture Day last December.

The chipmaker's competitive analysis said that comparing Intel's offerings to AMD's offerings isn't "just a chip-to-chip matchup" because of the "unequaled breadth" of its portfolio across business, mobile, desktop and gaming, as well as its platform technologies like Optane memory, Wi-Fi and Thunderbolt.

Industry observers are also wondering about the possibility of price cuts.

A June 21 report by Taiwanese news outlet Digitimes said Intel was mulling price cuts for eighth- and ninth-generation Core processors by up to 15 percent in response to the Ryzen launch, but the adjustments have not appeared so far. Intel has said that it "does not comment on rumors or speculation."

With AMD becoming more competitive from a price point perspective, Intel should respond by making price cuts, said Santos at Maingear. "If they make the correct price adjustment, I think they'll do very well still," he said.

Cutting prices could be a risky move for Intel, according to Moorhead, because if they were done in the channel, the cuts would ripple out to everywhere else, including tier-one OEMs, which he said would "dramatically impact [the company's] profitability and margin."

"Financially, you're better off losing market share," he said, adding that he thinks Intel will instead opt to use its marketing programs to continue pushing products.

Tibbils, the marketing executive at ASI, doubted that Intel would make price cuts but said he would expect a response in the form of new processors.

"I see Intel introducing higher [clock frequencies] and more cores," he said.

Santos said he believes Intel should take notes from Nvidia, which released its new price-competitive GeForce RTX Super graphics cards less than a week before AMD's Radeon RX GPU launch.

"I hope Intel Is going to be as aggressive as Nvidia to react [to AMD] and make sure they keep gaining the enthusiast mindshare," Santos said.

Making Inroads

Moorhead, the analyst, said AMD has made inroads with Dell, HP and Lenovo on commercial offerings that run on AMD processors. The company also offers a commercial version of its Ryzen processors —the Ryzen Pro lineup — though Intel's vPro platform is still very competitive, he said.

"What's hard to do is ship to a customer who has been using Intel for 10 years or is using vPro," he said.

While Intel remains dominant in the client space, market data shows that AMD is carving out more share for itself. According to Mercury Research, AMD's share in the desktop market grew by nearly five points to 17.1 percent in the first quarter, which contributed to its sixth consecutive quarter of share growth. That compares to Intel's 82.8 percent share in the first quarter.

For Velocity Micro’s Copeland, the Ryzen 3000 processors will help continue AMD's forward momentum.

"I don't expect Intel is going to stay flatfooted forever, but there's a window right now where AMD offers tremendous value for the money," he said.