AMD had a busy week last week, launching three significant new offerings across their ecosystem. First, they released their new EPYC enterprise-class of processors, which appear to more than double performance in some implementations. They refreshed their Mobile Ryzen line to address the hot laptop market, and finally, they brought out a new Radeon solution into a market hungry for greater graphics power.
This combined effort in one week has investors excited, server buyers excited, and gamers would be more excited if there weren’t still a shortage and very high demand for the graphics cards. People are paying almost twice the list price for these cards.
This week was an impressively powerful week for AMD—how the heck can AMD execute at this high level?
Well Trained Executive Team
What makes AMD very different from its competitors is that an IBM-trained executive team leads the firm. IBM is recognized as having what is considered the best executive training program in the tech industry, and Lisa Su, AMD’s CEO, is a showcase of just how well-trained an IBM executive can be.
IBM provides their executives with the needed breadth of informal training and experience to create a pool of CEO quality executives, most of which will never lead IBM but will likely have successful careers in the right kind of company. IBM-trained executives are best in industries they have experience in, either serving that industry or specifically in the tech segment. For instance, you can’t drop them into healthcare or hospitality and expect success. Still, in an IBM adjacent technology business, they can stand ahead of the pack, and a Lisa Su is a perfect example of that.
IBM also does a better job than most in terms of diversity and inclusion, particularly when it comes to women and minorities. Their ex-executives are unusually well trained. A lack of diversity in most executive ranks has often led to women and minorities holding executive titles underprepared. This lack of training is a problem for the CEO job and often for the job they currently hold. While this inability to perform often reflects poorly on women or minorities, it more likely reflects the lack of diverse mentoring and companies’ support.
Focus, Focus, Focus
Another unique aspect of AMD is that it doesn’t seem to get distracted. As a company, it focuses mainly on the same markets it has always known well. AMD isn’t constantly looking for the next big thing; it constantly tries to figure out how to advance in its current markets. Part of this is that AMD is only dominant in game consoles, and, as a trailing vendor, it isn’t unusual to focus on the leaders in their market.
Market leaders have to plow the field, but AMD, as a market challenger, can look at what the market leaders are doing and capitalize on their mistakes as they seek out new adjacent opportunities. These different opportunities come with significant risks that AMD avoids by slipstreaming their larger competitors.
Staying focused is never easy; companies often lose focus as they are attracted to new and different opportunities. Netscape tried to become Microsoft and failed catastrophically; Yahoo tried to be Google and failed catastrophically. AMD is focused on being the best AMD it can be, and, frankly, being the best at something you know is a ton more manageable than trying to even be mediocre in a market you don’t know or are new to you.
Lack of Churn
Technology companies often seem like they have revolving executive doors. This constant change in the staff makes it very difficult to maintain a consistent strategy, let alone maintain relationships with customers and investors. AMD has been relatively stable, particularly with their executive staff, giving the company a level of consistency partners and technology buyers appreciate. This stability means the company doesn’t change directions unnecessarily, can be reasonably expected to execute against their stated plans and goals, and has fewer mistakes due to staff disruptions.
AMD is executing exceedingly well now, and their recent Epyc, Ryzen, and Radeon efforts are a showcase of that execution. The fact they outsource their manufacturing is becoming a bit of a problem. Still, that problem exists across the industry at the moment, making the “Fabless” concept embraced by most of the industry somewhat problematic. But when it comes to things they have more control over, AMD is most of the industry’s envy right now, and their essentially IBM-trained executive team rightly deserves much of the credit.
Our expectations of great things coming out of AMD haven’t been misplaced, and there is no indication that AMD is reaching the end of its impressive winning streak.
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