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AMD’s new CEO likes basketball and the chip maker’s future

Rory Read, an ex-IBM executive, wants to look past Intel

Since being hired as CEO of Advanced Micro Devices (AMD) last August, Rory Read has been reshaping the company.

In November, Read set plans to cut the company’s global workforce of 11,100 by 10 per cent. The company would use the savings to fund initiatives in new technologies and emerging markets.

Read is hiring new upper management. Of the semiconductor maker’s top eight executives directly under the CEO, Read has hired three to fill technology leadership roles. Two of the new hires have worked at IBM, similar to Read.

Read recently brought 500 of the company’s top managers to a forum in Dallas to launch an initiative for changing the corporate culture, which he calls “The AMD Way.” A lifelong basketball player, Read played full-court games with about a dozen of his fellow executives at 5 a.m.

The new CEO has also delivered a wake-up call to his chief rival, Intel, by acquiring SeaMicro , which makes highly dense servers designed for large scale data centers. In January, SeaMicro announced new products based on Intel’s chips. One month later, AMD bought SeaMicro for US$334 million.

SeaMicro’s intellectual property and engineering talent is “nothing but a positive” for AMD, said Nathan Brookwood, principal chip analyst at Insight 64. AMD now has “a nice solution for the ultra-dense server market and Intel doesn’t,” he said.

Read is bringing a muscular attitude to AMD that may not be so different from what he learned at IBM.

“Step out of the shadows and lead,” is the message that Read said he is delivering to AMD employees. “Don’t be in a duopoly following some other industry player,” he said, in an interview.

Late last week, Read was in Washington to meet with government officials, including the federal CIO, to talk about technology, cloud computing and the semiconductor market. Near the end of the workday, he was in a bar that is almost across the street from the White House explaining his plan for AMD and a little bit about himself.

Read’s father was a 38-year employee of IBM, beginning on an assembly line and moving up to the executive ranks. Rory Read, the youngest of four brothers (he also has a younger sister), graduated with a computer science degree from Hartwick College and took a job with IBM, overlapping employment with his father for about five years.

IBM’s intramural basketball league “was a big decision point” in his taking the job, Read said.

Read spent 23 years at IBM, moving up management ranks until he left to become president and COO of Lenovo Group, the company that acquired IBM’s PC division.

Read is bringing IBM’s muscular attitude to AMD. He doesn’t imagine his new company in a perpetual second place. Similar to IBM, he wants to focus on execution and innovation.

Read’s hiring of technology executives with IBM in their resume is something Charles King, an analyst at Pund-IT, took note of at AMD’s recent analyst meeting.

IBM “has pursued a level of excellence that unfortunately has been lacking at AMD over the last few years,” King said. “If we’re talking about thoroughbreds, these executives all have the right bloodlines,” he said, of Read’s management choices.

Recent key hires with IBM experience on their resumes include Lisa Su, senior vice president and general manager for AMD’s global business unit, who joined AMD in January. Prior to taking that job, she was a senior vice president and general manager at Freescale Semiconductor. Before Freescale, Su worked for 13 years at IBM.

Another IBM veteran, is Mark Papermaster, who joined AMD last October. He also worked at Apple and Cisco .

A third top hire is Rajan Naik as senior vice-president and chief strategy officer. Naik spent 11 years at consulting firm McKinsey, and before that as a senior engineer at Intel.

Read sees three big trends, consumerization, cloud and convergence, driving the market. The later trend, convergence, is about how data and applications will flow across all devices, which “will break down this idea that there is only a single operating system, or a single solution,” he said.

Consumerization will deliver “the next billion or two billion customers coming from emerging markets,” Read said. “They’re going to buy at entry and mainstream price points, where we play very strong,” he said.

Cloud computing is changing both the data centre and the client. Users want clients that can work with low bandwidth and still deliver a great experience, Read said. That involves building chips that combine the CPU and GPU technology, or what is called an Accelerated Processing Unit (APU), which includes AMD’s Brazos, low-powered chip. AMD has sold about 30 million of those chips.

“It’s the most successful platform we’ve ever had,” Read said.

The SeaMicro acquisition gives AMD access to a relatively new approach to server design that use lower power chips in a dense design on small motherboards and optimized for specific workloads, such as multimedia and search. The company, founded in 2007, received a $9.3 million grant in 2009 from the U.S. Deptartment of Energy to help in its development of low-power systems.

Read believes demand for SeaMicro’s technology will grow with the cloud, and its design will be able to support any number of compute core types made by AMD and others, such as ARM. Read is careful to point out that he’s not saying ARM will be in the mix.

Less than a decade ago, AMD rocked the server market with its release of the Opteron processor. This was the first 64-bit x86-chip, which had been previously limited to 32-bit processors. It forced Intel to respond with its own 64-bit chip.

But AMD also suffered delays in meeting chip release dates, an issue that Read is particularly interested in correcting.

What AMD customers want, Read said, “is a company that they can trust to deliver on its commitments and execute on those commitments every day, day in and day out.”

Read said customers see AMD “as a company that is innovative, creative that can do the next big thing.” At “the same time they want that company to be there every day, to be able to assist them and create the solutions that help them win.”

The SeaMicro acquisition caught a lot of people by surprise, King said, and overall Read “has done very well in the short term.”

“Out of the block he has done some pretty interesting and thought provoking things so far,” King said.