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Costing tax payers in the hundred millions of dollars, is the premium worth the cost? AMD says no

Government bodies are starting to become more strict about buying specific brands of computer equipment -- notably Intel-specific hardware. Recently, there has been much talk about software coding with specific features for one processor and limiting something else for a different processor. Skype was on the front page for giving more features to users who used Intel processors than those who were using AMD processors. AMD itself has been handing out subpoenas to companies that it believes to be unfairly favoring Intel.

Now, AMD says that some government bodies are buying Intel-specific products for big price premiums but technically, the products offer identical or less features and performance. AMD says that being brand-specific costs more tax payers' money. In fact, AMD says that a whopping $563 million could have been saved in taxpayer dollars, had the government been brand-neutral in its purchases. AMD's press release claims:

Governments around the world have recognized the problem of closed procurement in the IT sector and the Argentine, Austrian, Belgian, Canadian, Finnish, French, German, Irish, Italian, Japanese, Swedish, U.K., and U.S. governments have all issued guidance calling for neutral specifications and the elimination of brand names in contracts. The European Commission noted in a 2004 study that application of its new procurement rules has reduced prices by approximately 30 percent.

Some analysts say that if AMD was more competitive, it wouldn't need to be raising these issues. Others disagree, and say that companies with a market dominance similar to Intel, use their considerable size and resources to "buy" customers. Interestingly, AMD's market share has grown significantly in the past year while Intel's has dropped. Both companies performance in the stock market also reflect the change in market share. 





"We can't expect users to use common sense. That would eliminate the need for all sorts of legislation, committees, oversight and lawyers." -- Christopher Jennings
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