Dell and HP ain't down with the GPP

Subject: General Tech | April 12, 2018 - 04:29 PM |
Tagged: transparency, nvidia, npp, dirty pool

Curious about the state of NVIDIA's new GeForce Partner Program?  There is definitely news as both Dell and HP do not seem to have joined up, though neither will confirm nor deny this.  The evidence comes from the availability of AMD GPUs in both of their current gaming lineups.  The new HP Omens do not offer AMD but this is theorized to be a supply issue, or it could simply be down to the better performance offered by NVIDIA's current mobile parts.  Lenovo as well still offers AMD in their Legion gaming systems so for now it seems they are not interested either.

This is very good news for the consumer, if these three big suppliers are not signing on, obviously the supposed benefits to joining the GPP simply are not that attractive to them, in much the same way as the 'transparency' offered by this program does not appeal to enthusiasts.

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"Since we found out about NVIDIA's GeForce Partner Program, aka GPP, a couple of months ago, we have seen changes implemented by NVIDIA's partners, but what has not happened is far more important to point out at this time."

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Source: [H]ard|OCP

April 12, 2018 | 05:07 PM - Posted by Stef (not verified)

AFAIK GPP don't prevent them from selling AMD gaming systems, it just ask for differen branding which I find hard to be of any (real) concern for consumers.

April 12, 2018 | 09:15 PM - Posted by Anony mouse (not verified)

If branding is not of any (real) concern to consumers maybe you should let Nvidia know this. The description of the GPP in their blog is that the current landscape as they see it is too confusing for the gamer consumer and that the GPP would provide transparency?

April 18, 2018 | 10:10 AM - Posted by Stef (not verified)

They talk about the value of their own branding which is, clearly, very important as if I propose you a GTX 1080 by naming it GQY MegaForce 2 you would not be able to recognize what you are buying but calling it ASUS AREZ Strix GTX 1080 instead of ASUS ROG Strix GTX 1080 would not make any real difference.
The couple NVIDIA-GeForce and AMD/ATI-Radeon can't be directly compared to a sub brand of one of the OEM.

April 18, 2018 | 01:48 PM - Posted by Randall Smith (not verified)

We have to remember that humans are simultaneously the most and least intelligent animals on the planet. The best evidence of that is marketing. Peripheral manufacturers discovered quickly how powerful the word "gaming" is in marketing. You can sell two identical products, but the one with gaming will sell more. It is what it is.
The AIB partners recognize this, and decided to build a gaming sub-brand. They have put a ton of money into building these brands and their reputations. The implication in the realm of graphics cards is that cards branded this way have higher quality components. Sometimes this is the case. The gaming sub-brands get the better binned GPUs, beefier cooling solutions, and RGB. People have come to see these as a mark of quality.
Nvidia recognizes this as well. That is why they are taking this step. Now these AIB partners have to develop a new gaming brand for AMD cards. These sub-brands will not have the same warm, fuzzy feeling for consumers that the established brands have. That will lead to hesitation, and some lost sales on the AMD side (at least once the crypto craze has calmed down).
This leads to other headaches for the AIB partners as well. Many of them sell RGB solutions that are branded under their gaming sub-brand. There are enough people out there who are ignorant of how things work that will think that their RGB controller will only work with like branded boards and cards (Aorus comes to mind for me first here). Some people do think that if you have a Gigabyte board, you need a Gigabyte video card, and a Gigabyte RGB solution. It is just the nature of the beast.
Now, you are throwing another wrench in the works. Not only do the AIB partners have to rebrand their graphics cards, but also any gaming focused motherboards. The issues here are two fold. First, you have the money that has to be put into designing the new branding for boxes, advertising, the board itself, and more. Second, you now have duplicate products that are branded differently for support purposes making it harder for less savvy consumers to seek out the support section of the website. I'm sure there are other issues, but those two were the first to come to my mind.
In short, not everyone is brand or hardware savvy. Marketers count on this to sell products. Frequently things like this are bought without doing proper research. So yes, the branding is extremely important.

April 12, 2018 | 06:30 PM - Posted by CNote

I wonder if the recent Intel+Vega team up has anything to do with this

April 12, 2018 | 09:39 PM - Posted by DellAndHPAndNvidiasProGPURevenueDependendOnThoseTwo (not verified)

Dell and HP(HP Inc) do not make enough of their total revenues from consumer gaming so that's probably why. Nvidia has plenty to lose as both Dell and HP Inc sell plenty of workstation class Nvidia quadro products and in Dell's case Tesla products also. HP Eenterprise(seperate company from HP Inc now) also has a large server related business so that's Tesla using also.

Nvidia can not afford to alineate Dell or HP Inc what with the markups Nvidia's professionl GPU SKUs demand in those Dell and HP professional PC/Laptop and server SKUs. Dell and HP Inc sell plenty of PCs/laptops to larger enterprise customers and that's really not a line that needs Nvidia's gaming oriented GPUs as much. HP Inc sells plenty of Business Class laptops with AMD Radeon GPUs and PCs that make use of AMDs Razen Pro Branded CPU SKUs. HP Inc has that printer business also so HP Inc is also in printers and has also now acquired Samsung's printer business so that's a large market that's not dependent on Nvidia also.

HP Inc and Dell are not as dependent on Nvidia as Nvidia is dependent on these two companies for Pro GPU revenues.

And Kyle, Big Blue in not Intel, Big Blue is IBM.

"The other unknown in this is Intel. Big Blue is very much aware of what is going on, and GPP could very much impact the sales of its Kaby Lake-G part that contains a GPU that was built by AMD specifically for Intel. I would expect we are going to see legal action initiated on NVIDIA GPP by Intel at some point in the future. " [see [H]ard|OCP article linked to by PCPer above]

The MB chipset makers(AMD and Intel) and their MB/partners could do very bad things back to Nvidia as Nvidia's GPUs are very dependent on AMD's and Intel's CPU/MB ecosystem platforms to even be able to run and Intel and AMD could very well respond in some manner to place Nvidia between the Devil and the Deep Blue Sea also. Nvidia's continuing that GPP risks actually giving the others adversly affacted enoug rope to legally tie up Nvidia and force the regulators to step in to resolve matters

April 13, 2018 | 06:27 AM - Posted by Jabbadap

Yeah I agree, Dell and HP are both in Quadro Partner Program as OEMs. It's more like HPs and Dells main market, so I can't see reason to leave that program anytime soon.

But in the GPP, how is their gaming brands Dell's Alienware or HP's Omen are they independently operating entities or tightly bonded to mother company. So can i.e. Alienware join to GPP while Dell does not?

April 13, 2018 | 04:27 PM - Posted by MathsPredictTheMarginPotentialBeforeTheQuartStatmentsArrive (not verified)

Nvidia is not likely to try and force Dell/Alienware regarding GPP as that's too risky for Nvidia's Quadro/Tesla revenues if Dell is displeased. Nvidia is too extended into the consumer gamimg market for over half of Nvidia's Revenues but gaming SKUs do not contribute as much towards Nvidia's total sales gross margins percentages(markups). Over all Nvidia's higher gross margins are a the result of Nvidia's Quadro/Tesla high margin markups sales and Nvidia can not afford to offend either Dell or HP and risk its over all gross margins being reduced.

The stock price of any company rides mostly on those total gross margins being above around 45% and any company with Nvidia's total market cap can not afford for its over all gross margins to slip as the stock analysts and big brokerage houses pay very close attention to any company's gross margins in those analysts' stock valuation process. Nvidia's Gaming GPU unit margins are rather small compared to Nvidia's unit markup/margins Tesla/Quadro branded professional SKUs. AMD has such a small share of the discrete gaming GPU market that AMD is not as exteded into the discrete GPU gaming market yet so that's Nvidia's problem currently.

AMD is in a good spot because of that Unusual Mining Demand so increasing the damand for Polaris and Vega and that AMD's margins/markup pricing are remaining high! So AMD's rather low gross margins are even being pushed higher for its Polaris/Vega SKUs but AMD's overall gross margings are still to low currently and that's a big part of the reason that AMD's stock prices fluctuate between $9 and $15 a share.

Nvidia is so much more dependent on the consumer gaming market than AMD, and AMD's Epyc sales revenues will dwarf any of AMD's consumer/gaming sales revenues and gross margins comapred to any of AMD's consumer margins. AMD's Epyc/Radeon Pro WX/Instinct higer margins and markups will allow AMD to get its overall gross margins above the 45% rates that will attract more investment for AMD.

Nvidia is the GPU market share incumbent and thus is more dependent on those gaming revenuse to keep its stock prices higher and that goes doubly so for Nvidia's Quadro/Tesla sales margins where Dell may make use of those valuable high margin Nvidia professional SKUs in Dell's server line of SKUs.

The Quants working for wall street know this and so do their Brokerage House employers and there is plenty of PHD level Maths made use of by those Quants(quantitative analysts) that specifically targets gross margins and how a campany's Individual Product Lines(Pro or conmsumer) weigh against any company's total gross margin potential. Nvidia is a rather large Market Cap company and the more market cap the bigger the dollar valuation market cap loss if those overall gross margnins fall. AMD is relatively small as far as market cap but watch out if those AMD gross margins get around 45%+ and start drawing in more investment.

April 13, 2018 | 12:52 AM - Posted by Don D. (not verified)

Guys,
When I go to McDonalds, they only sell Coca-cola products and when I go to KFC, they only have Pepsi cola products.
Where is the outrage?

April 13, 2018 | 12:55 PM - Posted by ThatGuyInTheComments (not verified)

Big difference, AIB partners are all about branding, gaming branded cards outsell non gaming branded cards in a ratio of 3:1 (even being the same chip)

NVIDIA knows that giving marketing funds, privileged allocation and others benefits is an offer they can't refuse

April 14, 2018 | 08:52 PM - Posted by Yojimbo (not verified)

Branding is important everwhere. That is why companies make brands. NVIDIA does not want to be held responsible in consumers' eyes for the quality of someone else's GPUs, and so they want separate brands. The big difference between the OP's Coke and Pepsi example and the NVIDIA GPP is that board partners have the choice to sell both AMD and NVIDIA cards, whereas McDonald's and Burger King sign exclusive deals. So the big difference is that the NVIDIA GPP is much more watered down than your average branding deal. McDonald's signing an exclusive deal with Pepsi does not force Coke out of the market because there are plenty other places for Coke to sell their product. Even if NVIDIA demanded that the only discrete GPUs their board partners sell are NVIDIA GPUs that would not be uncompetitive or harm consumer choice as long as they didn't snap up all or almost all the available board partners. NVIDIA aren't even looking for exclusivity, they are looking for separate branding in gaming lines. It would be like Coke signing an agreement with Burger King that says Burger King can sell both Coke and Pepsi products, but if Burger King names their drink dispenser machines then the Coke products must be from a differently named machine than the Pepsi products. You mean I can't get Pepsi from the Fizzly Fun machine?
I need to use the Frosty Fantasy machine? BLOODY MURDER!! Evil, evil, evil Coke.

April 14, 2018 | 10:16 PM - Posted by whosdownwithOPPyeayoukknowme (not verified)

This is absolutely Nvidia trying to cut Intel off before they ever get their first consumer GPU out the door.

April 13, 2018 | 01:19 AM - Posted by JohnGR

For ASUS, Gigabyte and MSI that rushed to be part of GPP, the gaming market is a big deal. For HP and Dell who also sell a ton of servers and professional equipment, gaming is a significant part probably, but not that important. Also they are huge OEMs, they can even demand new products, even if they are simple rebrands and we see this every year. I don't think Nvidia wants to try to play it a dictator on them, because in this case, they are the dictators.

April 13, 2018 | 04:30 AM - Posted by Aparsh335i (not verified)

I must be wrong, but is this whole article nonsense? Does GPP even have any target at system manufacturers? I thought it was only aimed at the companies that build graphics cards using their gpus.

April 13, 2018 | 05:47 AM - Posted by Prodeous13 (not verified)

as Aparsh335i mentioned, GPP is about GPU makers, not system builders like Dell/HP and others.

It would be too dengerous for Nvidia to bite the hands that feed them.

Just like Asus and others, it is too dengerous for them not to get behind GPP.

Is GPP legal, that would be interesting to see.

April 13, 2018 | 09:07 AM - Posted by Anonymously Anonymous (not verified)

Contrary to what you might think, this whole GPP business/shadiness is Nvidia sweating at the idea of a third discrete GPU maker, one that could potentially take away a LOT of market share.
See, the AMD/Intel collab is not the end goal, it is really only the beginning for Intel. And the product of this collab has very good reviews, especially since this is aimed at SFF and mobile devices, which is a huge portion of the market. Think about that, consumers see reviews and adverts about NUCs and mobile products that are good at gaming, and it's branded as Intel inside and no mention of Nvidia?

Take a good long hard look, Intel is hiring a LOT of engineers for the graphics side, and it has also been revealed that Intel is going to do consumer discrete GPUs. Intel's discrete GPU's don't have to be great, they've just got to be "just good enough" to compete and possibly take over the low end market, this is what Nvidia is worried about.
TL:DR - OEM's are not interested in signing GPP, not when Intel is going to make the push into discrete GPU's in the very near future, probably about 2 years

April 13, 2018 | 09:44 AM - Posted by Prodeous13 (not verified)

Interesting perspective.

Though Intel is trying, they tried in the pass and failed. I really hope they succeed this time, with Raja on board, there might be a good chance.

As for OEM's, DELL HP and the likes they dont' have major gaming segment, they are more business, workstation and server market first. So GPP has no impact on them.

I definitely see how Nvidia is using GPP to fight AMD/Intel partnership, but they way they are doign is borderline illegal, and Intel already did that.

Though i guess for INtel it was a major success, by forcing companies to go INtel Only during the P4 area. And even with the ongoing EU litigation (and settling with AMD in USA) that is pocket change now to Intel..

Like you, I to see hope that Intel gets into GPU's and bring some needed competition. Feels quite stale lately, and all thanks to AMD's lack of competition.

But to me one thing stands. Only when AMD started to eat away at Nvidia market, only then Nvidia reasoned with a illegal action. Was hopign more from Nvidia, but then in the end it is a company that wants to make money, even if it might be shady/illegal... :(

April 13, 2018 | 11:30 AM - Posted by Anonymously Anonymous (not verified)

Here is a much worded explanation:

https://pbs.twimg.com/media/DanTcJ-XkAE94Pi.jpg

April 13, 2018 | 11:36 AM - Posted by Anonymously Anonymous (not verified)

forgot to add this part:

that part of the reddit thread was deleted, however, the screenshot does include Kyle's input as well.

April 13, 2018 | 03:30 PM - Posted by rick0502 (not verified)

here's a link to the source. why wasn't it in the story?

https://www.hardocp.com/article/2018/04/12/dell_hp_resist_nvidia_gpp_lea...

April 13, 2018 | 07:42 PM - Posted by Jeremy Hellstrom

if my link or brain fails... it is always at the bottom  - Source: [H]ard|OCP

April 14, 2018 | 08:35 PM - Posted by Yojimbo (not verified)

If some companies are not joining the GPP that is evidence that the conspiracy theories about it, that it is some sort of evil empire "join us or die" ultimatum, are false. What exactly is wrong with the program? How will consumers supposedly be hurt by it? From what I have seen, none of these articles stoking the flames of panic have bothered to put forth any sort of logically sound argument as to why there is a concern about the program. I don't mean a conspiracy "well what if NVIDIA really has evil plans" argument,
I mean one based on facts and real world case and effects. Board partners or OEMs that choose to sell both AMD and NVIDIA cards choosing to put those cards in different brands in order to promote the NVIDIA-based brand in a partnership with NVIDIA is not illegal or unethical. What exactly is unethical about it? Explain it using the facts and real world cause and effects. Don't say "well maybe NVIDIA will..." or some vague statement like "brands are important". What is going to happen, how can you be sure, and why is it unethical?

April 15, 2018 | 12:56 AM - Posted by WalksLikeAnAntitrustViolationTalkslikeAnAntitrustViolation (not verified)

"brand in a partnership with NVIDIA is not illegal or unethical."

IT sure is both illegal or unethical if Nvidia is coercing the independent third party AIBs/OEMs to join or lose benifits/be excluded from benifits in they do not join GPP. And Nvidia seeks to take over those INDEPENDENT Third Party AIB's/OEM's long known to the consumer third party AIB/OEM Gaming Brands that are the indipendent Third parties' Brands and not Nvidia's brands in the first place.

Nvidia is trying to enforce an illegial(Antitrust violation) vertical integration/alignment of those indipendent third party AIBs/OEMs and their long standing branding to the exclusion of AMD and others that have historcially had access to those indipendent third party AIB's/OEM's long known by the consumer gaming brand names.

Nvidia is abusing its GPU gaming market monopoly to exclude the competition under that Third Party AIB/OEM gaming branding and that's hurting AMD's, Intel's and any others market mindshare under that Nvidia Branding Land Grab that is there to reduce in an unfair market manner AMD's and others gaming market awareness among consumers who have come to Know and Assoicate with gaming those Third Party AIB's/OEM's gaming brand names over the years.

That align with Nvidia or lose/not be quilifed for support Ultimatum is corecive by nature and that's going to result in fines after the Regulators get wind of what's going on. Nvidia under the antitrust laws/regulations will not get away with what it is doing in the long run!

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