Dell Picks Up AMD-Based Line With Alienware Purchase

The Round Rock, Texas-based vendor said Wednesday it plans to acquire Alienware, a maker of high-end desktop and notebook PCs that use processors from both Intel and Advanced Micro Devices. Dell is a long-time Intel partner that offers Intel's processors exclusively in its line. Alienware, Miami, has a strong AMD line-up but will operate independently from Dell and will keep its existing brand identity separate, the two companies said.

Terms of the agreement were not announced.

Andy Kretzer, director of sales and marketing at Bold Data Technology, a Fremont, Calif.-based system builder, said the deal shows just how quickly the IT space is changing. "Intel in Macintosh, AMD in Dell," Kretzer said. "It's a strange new world."

The most interesting part of the deal, said Kretzer, is Dell finally tying the knot with AMD despite pressure from Intel. "This is a back-door in for AMD," he said.

Dell's acquisition of Alienware also brings that vendor into the gaming space, an area it has been trying hard to enter for the past year-and-a-half. But the more disturbing side of the deal to some system builders comes from the continuing trend of smaller companies either being acquired or quietly disappearing.

"This is something that will make it even more difficult for system builders to have any leverage with the vendors," he said. "Now we're getting larger Tier Ones dictating to the Intels, AMDs, and Microsofts of the world, not like a couple years ago when those companies dictated to Dell, HP, IBM, Acer, Bold Data."

Dell said Alienware will operate as a wholly owned subsidiary following completion of the transaction and will maintain its own product development, product marketing, sales, technical support and other operations as well as brand. The management and founders of Alienware will continue to operate the Miami-based company as a standalone unit of Dell, according to Dell officials.

"Alienware's products are an excellent complement to Dell's own line of high-performance computers designed for gaming, enthusiast and media content customers," said Dell Chairman Michael Dell in a statement. "In addition to offering high-quality, high-performance products, Alienware has tremendous brand appeal with consumers and creative business professionals."

In a statement, Alienware CEO Nelson Gonzalez said management of both companies agreed that the acquisition could only succeed if Alienware is structured as a separate division that will continue to make its own product development and other operating decisions.

Rumors on the Web and from financial analysts had suggested that Dell was seriously looking at Alienware as a way to beef up its offering on the higher end. Alienware has a following among consumers and gamers. It also would mark Dell's first use of processors from AMD, another rumored transition.