Intel Partners: Otellini's Successor Must Continue Mobile Charge3:32 PM EST Mon. Nov. 19, 2012
Intel President and CEO Paul Otellini is set to retire in May, leaving the chip maker's crucial transition to the mobile market in the hands of an unnamed successor.
According to solution providers, that successor, who Intel said could be tapped from outside the company, will have big shoes to fill, as Otellini has already helped Intel carve a space for itself -- even if it's a space that's overshadowed by rival chip maker ARM -- in the lucrative smartphone and tablet markets.
"The industry is changing rapidly and obviously Intel is being affected by it, with the transition to mobile and all the dominance ... of ARM chips in phones and tablets and everything lately," said Todd Swank, vice president of marketing at Nor-Tech, a Burnsville, Minn.-based solution provider and Intel partner. "It will be really interesting to see who they choose."
In the mobile market, Intel faces an uphill battle against U.K.-based chip licensor ARM, whose low-power architectures are used to fuel over 90 percent of the today's smartphones and tablets. Still, during Otellini's eight years at the helm, Intel has started to fight for a slice of that share; the company has recently gone to market with its Atom "Medfield" and "Clover Trail" processors for smartphones and tablets, the latter of which has already nabbed over 20 tablet and convertible PC design wins with OEMs including Lenovo and Dell.
Maintaining this momentum must be a priority for Intel's new CEO, partners believe, as tablet and smartphone adoption soars, and worldwide PC sales continue to stall. Intel's PC Client group last quarter saw an 8 percent year-on-year revenue drop, with its fourth-quarter outlook looking equally as grim.
According to Nor-Tech's Swank, Otellini's replacement needs to be somebody who can build upon Intel's mobile strategy, without losing focus of the chip maker's bread-and-butter markets, such as high-end PCs and servers.
"It's hard to believe that [Intel] would hire somebody from the outside. They've never done that before. But I mean, it's different times," Swank told CRN. "I mean, look at their stock price, it's down pretty low right now. So I imagine they want to get some new blood, new ideas and new focus. But, then again, they don’t want to lose what's made them strong and made them the great company they are today."
Gary Bixler, founder and president of channel consultancy firm Bixler Enterprises, agreed that Otellini's retirement comes at a very crucial time for the chip maker, given today's shift toward mobile computing.
"The transition to mobile is having such an impact on the industry, and that creates an interesting inflection point for Intel. Even without a leadership change, it was going to be interesting times," Bixler told CRN. "So I think everyone will be watching closely. It will be an opportunity for them to maybe take advantage of that inflection point and transition to a leadership team that is even more capable in that mobile arena."
NEXT: Partners Hope New Intel Head A Channel Advocate
Douglas Grosfield, president and CEO of Xylotek Solutions, a Cambridge, Ontario-based Intel partner, agreed that Otellini's successor will need to maintain a keen focus on mobility, as Intel pushes on with its charge against ARM. That said, he doesn't anticipate any major impact to his business, or Intel's, upon Otellini's departure.
"From our perspective, it isn't likely to have much impact unless someone very young and aggressive was granted a miracle in [being] selected," Grosfield said. "Most of the folks who could be reasonably expected to fill the big shoes are highly unlikely to make sweeping changes in a company like Intel, so I imagine it will be business as usual."
Randy Copeland, president and CEO of Velocity Micro, a system builder and Intel partner based in Richmond, Va., also expects Otellini's retirement to have minimal impact on his business. He also suspects Intel will tap a new CEO from within and will remain a dominant player in the chip market, despite the new era of mobile computing.
"I'm very sure that the current technology market dynamic is nothing more than part of the cycle Intel has thrived in over the past 45 years, and they are perfectly capable of thriving in this environment, with or without Paul," Copeland said. "For Intel, they have a tremendous depth of talented candidates inside the company, and I would be really surprised if they found anyone outside the organization that would be a match for the senior management that is already in place."
In addition to leading Intel's mobile charge, Otellini's successor will also have big shoes to fill related to the channel, partners said. Otellini has long been an advocate for the channel, and solution providers hope his successor will do the same.
"Otellini has been a big channel guy. He always has been very supportive, he has come to some of our channel events, and he was definitely a friend of the channel," said Nor-Tech's Swank. "So hopefully the next person will have the same feel."
John Convery, executive vice president of vendor relations and marketing at Denali, a Redmond, Wash.-based Intel partner, agreed that Otellini's strong relationship with the channel will be missed. "As for the retirement of Paul Otellini, I am not surprised," Convery said. "Under his leadership, he has been very channel friendly and has positioned Intel as a major leader in the market."
Lyle Epstein, president of Las Vegas-based Intel partner Kortek Solutions, agreed with Convery, noting that, under Otellini's direction, Intel has not broken into new markets like mobility but has always urged its channel partners to come along for the ride.
"Paul [Otellini] has helped Intel dive into new and diversified fields that I think Intel might not have got into," Epstein said. "He has always respected the channel and worked with Intel channel partners, keeping us as an extension of Intel."
PUBLISHED NOV. 19, 2012