AMD Reorganizes Business Units; Names Dr. Lisa Su as COOby Ryan Smith on June 13, 2014 11:00 AM EST
In a move that will mark a mild shake up in how AMD operates, AMD has announced that they will be undergoing a company reorganization next month. Come July 1st, AMD will be consolidating their various business groups into just two groups, and overseeing those groups will be Dr. Lisa Su, who will become the company’s new Chief Operating Officer (COO).
AMD is citing the reorganization as the latest step in their efforts to transform the company, a process that started in earnest over two years ago in 2012. Since then the company has been making changes to move away from its traditional cost-heavy PC CPU and GPU roots and towards a structure that is focused on mobile (x86 and ARM), semi-custom silicon, and other market areas with lower margins but also lower costs that are more sustainable for a company of AMD’s size and capabilities. AMD is nearing the end of that transformation – after years of losses they’re now approaching profitability at their desired margins – with AMD realigning their business groups ahead of some of their final steps, including becoming a fully ambidextrous company through designs such as the K12 CPU.
As part of that general transformation AMD’s business groups have already begun to overlap some, so now AMD is taking the next step by making it official and consolidating the relevant groups. AMD’s client, consumer graphics, and professional graphics groups will now be combined under a single group, the Computing and Graphics Business Group. By bringing together those three groups like this, this change effectively consolidates all of AMD’s core technology teams in to the same group, CPU and GPU alike. In this case in particular the lines between CPU and GPU have already been blurring for some time, with the bulk of AMD’s “CPU” business having shifted to APUs (CPUs with integrated graphics), so in a sense this is the formalization of the fact that AMD cannot build complete CPUs without technology from their graphics group.
Meanwhile AMD’s second group will be the Enterprise, Embedded and Semi-Custom Business Group. This group consolidates the server, embedded, and semi-custom groups under one roof. This structure does mean CPUs are essentially split – an Opteron sale is now an Enterprise sale rather than being kept with the Computing group CPU sales – but otherwise this marks the combining of AMD’s “fringe” groups such as SeaMicro and the semi-custom groups, which in contrast to the core technology focused Computing group are focused on building designs and applications around AMD’s core technologies.
Both of these new groups will also see their relevant sales appendages integrated into them. AMD currently has a separate sales division, which will no longer be the case after the reorganization.
Heading up these groups both directly and indirectly will be Dr. Lisa Su, who is getting a promotion from Senior VP and GM of Global Business Units to the C-level position of Chief Operating Officer (COO). AMD has not had a COO for a few years now, so this marks the return of that position to AMD’s executive organization and arguably makes Lisa AMD's second-in-command. Meanwhile AMD’s Chief Sales Officer, John Byrne, will also be getting a promotion of his own, which will see him move up to SVP and GM of the Computing group.
In regards to AMD’s new structure, Lisa will be taking direct control of the Enterprise group on an interim basis. Meanwhile Lisa will have indirect oversight of the Computing group, with John serving as GM of that group and reporting to Lisa. Lisa in turn will now report directly to CEO Rory Read.
Ultimately the consolidation of AMD’s businesses is not unexpected, especially on the core technology side where APUs and AMD’s HSA initiative has greatly worn away the distinctions between CPUs and GPUs. Meanwhile the shifts in leadership bring with it new mangers and new reporting structures, so although things will be changing at AMD it doesn’t sound like AMD’s development processes will be affected on the whole – though management shifts often come with smaller internal changes.
But perhaps the single most visible change from this may end up being how AMD reports their financials. Currently AMD separates their CPU and GPU businesses as the Computing Solutions and Graphics Solutions respectively, with Graphics also including semi-custom business and game console royalties. If AMD changes their financial reporting to match their new businesses then we’d be able to more easily see how AMD’s semi-custom and console businesses stack up, but AMD’s CPU and GPU businesses would be indistinguishable. AMD hasn’t commented on the matter in their press release, so we’ll have to see what they do for their Q3’14 results later this year (where the combined groups will have been in effect for a whole quarter). Update: AMD tells us that we can expect an update on how they'll be reporting financials in their Q2 earnings call next month.
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lmcd - Friday, June 13, 2014 - linkYeah and the selling price was over their value, since all deals end up like that. AMD if purchased would probably cost closer to 3.5 Billion.
LaughingTarget - Saturday, June 14, 2014 - linkAMD had a market cap of $30 billion in 2006.
TheJian - Sunday, June 15, 2014 - linkthis^^^ Most here seem to be missing the point of your posts and others. They are forgetting what they WERE and how they keep shrinking what they ARE today.
The 3dfx point was spot on. AMD didn't learn from watching 3dfx go down I guess. AMD is forgetting DX/OpenGL for their own API which has ZERO dollars to push it on anyone. It is difficult and COSTLY to woo people to your API while others exist that serve everyone. IF you have the cash to blow, sure its great to add features your competition doesn't have to make you stand out. But when you're broke, and everyone around you is 3B+ rich, you should stop this nonsense. Most of the vidcard/driver problems of the last 2yrs were due to basically the same thing happening with diverted funds to make console custom chips. That money, had it been used on GPU/CPU might have put out something to compete with INTEL again, and also avoid GPU/driver problems on the gpu side. People don't seem to understand what is really going on here.
Also no matter how you slice up the data above, you should be on SOC rev4-5 by now like NV. Again funds from the diversion crap (console/mantle) could have been spent here, getting a modem company bought so they could at some point get into a phone etc...
ShieTar - Friday, June 13, 2014 - linkQuick question: Why would a tech-site report on this kind of management-mutation?
Please don't get me wrong, I highly appreciate the AT special coverage on AMD progress, I believe in progress by competition, and I understand that communicating the technological considerations of all competitors even in the face of a commercial domination of a single competitor is in the best interest of the overall tech community and the average customer.
I mean it, I enjoy the equal opportunity communications going on at AT, even when it seems asymmetric sometimes at pairing Intel tests versus AMD ideas. But thats all for the better, we all have decades to live and should be interested in tomorrows products almost as much as we are in todays. So go on with all of that, I like it.
But now you go and babble about Business Units? Honestly, how and where will that ever turn up in your benchmarks? Does anybody really believe that an army of thousands of highly educated engineers and scientists will suddenly come up with ground-breaking new ideas because they are now grouped into a new business unit with a new shiny Mastermind?
Maybe it is time for AT to stop being paid by advertisers, and start being paid by the readers? I for one would not mind to give my money directly to an independent source of tech-information, rather than have it trickle down through the commercial departments of the companies I happen to buy stuff from.
Honestly, guys, please think about who your customer is, what your customer cares about. Me, I'd rather be your customer than your product to be sold.
Egg - Friday, June 13, 2014 - linkThis hardly reads like a press release. It's not like AMD really wants to announce to the world that we won't be able to find out how their individual units are doing, which is a major change; I remember reading Anandtech's reporting on how Nvidia and AMD were doing market share wise. Changing market share isn't going to create innovations, but it's still nice to note.
HigherState - Friday, June 13, 2014 - linkI agree that an independent tech review website supported by its readers would be a theoretically ideal business model for AT. I just don't see how not having partnerships with vendors would somehow result in more product coverage. AMD's sponsorship with this site CAN lead some to be suspicious of the selection of content like this article, however it isn't like this is a top tier story. Its a pipeline story after all, not a major news article. The title is clearly defined, so I knew what I was getting when I clicked the link. I'm not at all worried about AT thinking that its readers are just a marketing opportunity like some of the other major "tech" websites (looking at you big C.)
Ryan Smith - Friday, June 13, 2014 - linkHi ShieTar;
To answer your question we report on it because it's important. I believe that it's impossible to fully understand the decisions technology companies make without understanding the financial situations and people behind them. A change in management doesn't mean that AMD is going to suddenly figure out how to change the laws of physics, but it does signal what AMD considers important and what technologies they're going to be investing in for the future.
For example, to understand AMD's current product lineup and why they aren't falling over themselves to try to build a Intel-killer high-end CPU, you have to understand AMD's intentions to transition towards a smaller company that is focused on markets that AMD considers high growth, such as semi-custom silicon and dense servers. That is a management directed change that has directly impacted the kind of products AMD chooses to develop, and knowing something about Rory and Lisa along with AMD's financial situation helps to understand why AMD has gone that direction.
Similarly, AMD's decision on how to organize their business units indicates just what AMD considers important and how AMD expects their revenue to be aligned. The fact that they've gone from dividing the business between the GPU and CPU to dividing things up between core technologies and fringe technologies indicates that AMD expects a significant portion of their revenue to come from the latter. Which is to say that direct sales of products like Radeon and Athlon are no longer going to be the vast majority of AMD's business as they once were. This is immaterial to how many frames per second AMD's next GPU gets at 2160p, but it's material to understanding why AMD builds a GPU so powerful and charges that price, etc.
At the end of the day just looking at benchmarks and dissecting pipelines isn't enough; it tells us what happened but it doesn't tell us why. Understanding the business, the people in it, and the goals is the final piece of the puzzle that makes our understanding of these products complete. And in turn is what allows us to write better articles and offer better advice (do we suggest a CPU if we know the platform is at a dead end? etc).
As for advertising, that's above my pay grade. Advertising is handled by a 3rd party and whether to rely upon it or not for funding is something that's up to Anand. I just write about the things I'm interested in and collect a paycheck for it.
TheJian - Friday, June 13, 2014 - linkSo why not report on something like Grid and K1 winning awards at computex (highly sought after gold award for K1)? With grid probably because over the last 3 quarters they went from 100 testing grid, then 200 testing grid, and this last Q now having 600 major companies testing grid. Interest like that doesn't make the news here...No need for an Nvidia portal and understanding NV products that are gaining some massive interest (especially grid, and car tech for K1)?. Where is the Nvidia portal? Where is the shield update coverage which added a LOT of features, causing tomshardware etc to re-review it and test the new features. They have the largest gpu market share in discrete/workstations buy far but you ignore them, grid info etc. I just went through the 3 pages of computex stories, and nothing on Nvidia. Nothing on Supermicro pitching grid. etc. Made it to tons of other booths, nothing on NV. IT's like they don't exist on anandtech...LOL.
NVIDIA Gamers day at computex...Nothing from anandtech...WOW. They gave away a Titan-Z, Shields, Tegra Note7's.
Supermicro grid info from computex
lmcd - Friday, June 13, 2014 - linkHonestly, the K1 isn't interesting because everyone got burned by Tegra 4. AMD has been far more open about failures than Nvidia has.
Nvidia ticks the most boxes... but that doesn't mean they're the most innovative or interesting. Maxwell is interesting, but it's not like we got to see anything. If Maxwell had been showing we'd have seen something. Titan-Z is overpriced, Shields are a flop, and the TNote7 loses to Snap 800 devices.
Sorry about that.
Oh, and I'm waiting for Maxwell coverage so don't count me biased. I'm in the Nvidia boat.
Egg - Saturday, June 14, 2014 - linkI'm with lmcd... what's the only shipping K1 product? http://www.anandtech.com/show/8022/xiaomi-announce... this?