Would you say supporting the UK channel has always been one of Nvidia's strengths?
CA: Yes, we've always been focused on the channel, and I think we've started to do that more so in the last two years. We've set up channel focus programs over the past couple of years which really look after the channel in a number of ways. This includes our Partner Force programme, which is our global reseller operation across Europe.
Do you have any plans to boost marketing and your commitment to the channel with any specific campaigns or initiatives this year?
CA: We do a lot of work with distributors offering rebates and such to distributors. So indirectly there's quite a bit of money going to them via those programmes.
However what we're going to do now is actually move some of the spend down the channel, which will have more of an impact on resellers. We're going to be introducing a loyalty scheme to some of our premier members. It's called Partner Force Rewards, and is aimed at the next tier down from the customers that our direct sales team talk to.
We're going to incentivise on certain products; this has been done in the past where vendors have been offered prizes and such things. However we're going to be unique in that we will offer a debit card solution.
There will be a card that a reseller will have in the name of the company, and money will be approved to that card, which they can go out and spend. It's a debit card so they can use it online, they can use it at machines and anywhere with a chip and pin machine. We're going to put the spend right in their hands.
We think this is very exciting. It's going to be a pilot at first rolling out in the UK, Germany and France. Assuming that it takes off we'll move it to a larger base of resellers.
When will that arrive in the UK?
CA: We're going to announce it in May and we'll start measuring unit sales in May/June/July time. We'll send the [debit] cards out first and put a little amount on their as a teaser, just to make it interesting.
In terms of other marketing in general, we're spending a lot more time on actual hardcopy marketing materials. When resellers join the partner force program they get a welcome kit, which contains posters, mouse mats, a DVD with logos, various marketing collateral. We're going to be looking to increase the frequency of that with a refresh pack, to update some of those posters with new themes.
We're also looking at increasing the type of collateral that we'll send out; we know that we have quite a base of customers that have retail stores, so we're looking into the possibility of more retail focussed materials such as window stickers, flags, totems, things like that. That's going to be something you're going to see more of in the second half of the year.
AMD and ATi consolidated their CPU and graphics operations, and Intel continues to look to make advancements in its in-house graphics technology with Larrabee. What can a graphics only operation such as Nvidia offer that more holistic chip firms can't?
BB: You've got to ask the question why Intel and AMD are placing much more resources into their graphics sides. It's something we've been campaigning since Nvidia first started over 15 years ago now. I think it's pretty much undoubted now that in terms of graphics solutions we are the market leader.
Far more people are using our graphics cards now for more than just games. What we've done internally and with the software development community is design something called CUDA, which is a very easy set of development tools to use. The implementation of parallel architecture like GPUs for such things such as Google Earth and music file transfer can also dramatically speed things up.
This is really what AMD and Intel are seeing in the future as well. You've really got to wonder why Intel is pushing Larrabee so much and why they're bringing forward development. I'm sure they realise as well that massively parallel architecture is the future. And this is something that we really want to push now.
The future is designed for GPUs, as stuff becomes more visual, as you transfer photos onto a computer and then published online on Facebook, we can give that a makeover and really make it a 3D application so you can scroll through all your photos in 3D and real time. That just can't be done on a CPU.
This is clearly a sector you're strong in, but how much of threat do Intel and AMD pose to you considering their intent to move in and the sheer weight of money they can throw at the project? Is this an area you're always going to lead?
BB: I have absolutely no doubt that Intel and AMD can come out with very impressive hardware, but that isn't the whole story. You need the development tools, you need the drivers, and you need the support there in order for the software to be created. Intel's tools are still a good 18 to 24 months away from being released. Parallel processing is here right now, and developers want to be able to use that power available to them.
Obviously Intel does have a lot of money, but you also have to think about what developers are used to and what we've put in place in the past. All you have to do is look on our gaming side, 'The Way It's Meant To Be Played' programme across the world. We by far have the number one relationship with games companies across the whole world which is why when new games come out they have the Nvidia logo on them – when these games are designed they have Nvidia chipsets in mind.
Equally we're pushing CUDA in a similar manner. This isn't something that you can just throw money at and suddenly get support,; it takes a long time to build up the relationships and the trust from the developers that when you release new hardware it will be supported immediately. It's going to take a lot of that from Intel's side, for example, to get people to suddenly abandon what they're used to and start developing for Larrabee.
Using the games as an example, imagine how much money someone like Epic has ploughed into the Unreal engine, to all of a sudden be told they've got to reprogram this because we've decided to do something slightly differently. This isn't going to make them very happy as engines can take them upwards of three years to produce.
So thanks to these relationships, could AMD and Intel become unstuck if they try to encroach in the area?
BB: We have led it for many years now and we do have those relationships there. I don't think it's the case where you can give people loads of money and they'll suddenly switch. I'm sure you will find some development houses that will switch to the Intel side and I guarantee the first generation and even the second generation stuff that they release will not be anywhere near as good as the stuff that's being developed with CUDA in mind right now. CPUs are important but GPUs are about to take on a much greater significance.
Everything that Intel and AMD have come out with over the past few weeks has just confirmed what we've been saying for past 18 months. So it's quite nice from my side to see that confirmation coming and I'm sure you'll be seeing a very exciting next few year's in that market.