The Top 25 Newsmakers of 2006 – Number 1: ATI/AMD David Orton

Published: December 11th, 2006

Now that ATI is part of AMD, Dave Orton may finally be able to cut back on travel

“This is the first week I’m not on an airplane since the middle of September,” he told CDN in a late November interview.

It’s perhaps not the most pressing concern on Orton’s mind, but the former ATI CEO-turned ATI executive will soon be able to stop flying weekly from Silicon Valley to ATI’s Markham, Ont. headquarters. It’s even possible that the man that Orton replaced, K.Y. Ho, is racking up more miles. According to Orton, ATI’s founder and former CEO is now pursuing philanthropic ventures and visiting his native China.

Still, Orton is spending a lot of his waking hours in airports.

Chipset-maker AMD announced its intent to acquire the Canadian graphics card company for US$5.4 billion in July and the deal closed in October. There’s still work to be done on the integration front, said Orton, who now holds the title of executive vice-president of AMD’s visual and media business, necessitating that he still get on planes and split his time between his home in California and Markham.

“It’s difficult to finish integration quickly, even when you have blueprints and we’ve announced the organizations. You still have process differences, cultural differences that you want to bridge,” he said.

“Then you have roadmaps to complete the full integration – you have to integrate the SAP systems, you have to integrate HR systems and manufacturing systems. The systems integration can take up to a year.”

The combination of the two workforces is going smoothly, he said, and that part at least should be finished by the end of this year. The two companies will lose a combined 2.3 per cent of their employees through layoffs – a relatively small number considering the size of the merger and a number that Orton can live with.

The Intel relationship

When the deal was first announced, tongues wagged about ATI’s relationship with Intel, not to mention AMD’s relationship with Nvidia. Would these vital business partnerships survive? Orton insists that ATI is committed to working with Intel chipsets. In fact, it may be vital to the survival of the brand.

“We aren’t cutting the Intel platform off at all,” he said. “We are shipping a large number of Intel chipsets, but longer term, the R&D teams will be innovating on the AMD platforms at the chipset level.”

In other words, AMD won’t support marketing that puts the Intel name front and centre, but Intel will still be in the picture for ATI. Similarly, AMD will still work with ATI’s key graphics rival Nvidia in much the same capacity.

ATI also sewed up deals with Nintendo and Microsoft prior to the AMD merger, making sure its name is now associated with Microsoft’s Xbox 360 and Nintendo’s Wii, which was released only weeks ago. The relationships only strengthen the ATI brand, said Orton.

Despite joining the world’s No. 2 chipset maker, ATI still retains a measure of control over its future, he said.

“You have the autonomy that you need so long as you’re delivering the strategic goals that you’ve set out and the company has set out for you,” he said.

“The chipset really becomes a business to deliver AMD platforms. It’s much more synergistic with the microprocessor roadmap.”

Orton believes ATI and AMD are joining forces at a propitious moment in the overall development of IT: The launch of an operating system that Microsoft has called the most important since Windows 95.

A new Vista

With Microsoft’s Vista platform, Orton anticipates some growth in desktop and laptop computer sales, which can only improve the fortunes of companies like ATI.

“There’s no doubt that Vista is going to demand more and more graphics as applications develop within (that) environment. We see that as a great opportunity for an uptick in GPUs,” he said.

“But I think for the first years of Vista we’ll see a significant step up – not just in GPUs, but we’ll see the whole PC market pick up.

“As people try to get on the Vista bandwagon, we’ll see kind of a Y2K effect. People will start upgrading their platforms in order to leverage Vista.”

Orton said the sales organizations behind AMD and ATI are ready to take on this and any other challenge. The integration of those functions was simple, especially compared to the effort it takes to win channel partners post-merger.

“If anything, the channel requires you to be outbound focused immediately,” he said.

“I’d say we’ve done a good job of that, not a great job. We’ve got to tune that engine up, but I’ve no doubt that by the end of this calendar year, we’ll be a Ferrari kind of model running through the channel. Running hard.”

By joining with AMD, Orton has relinquished some of the tasks that were his responsibility as head of ATI.

He admits that some parties might be less interested in talking to him now than they were, say, six months ago.

But chances are that much that crosses Dave Orton’s new desk will still require him to leave home and get on a plane.


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