2007's Top Innovators

When it comes to product innovation in the fast-moving IT market, no one comes close to Intel. That's the word from solution providers who gave the Santa Clara, Calif.-based chip giant the top grade for product innovation for the second consecutive year in the 2007 VARBusiness Annual Report Card survey.

Intel received a score of 82 in product innovation, well ahead of rival AMD, which finished in a three-way tie for second place along with Hewlett-Packard and Cisco, all of whom posted scores of 78. Xerox, IBM (System i) and Samsung finished in a three-way tie for the third spot with 77 scores.

Intel's Client and Server Processors victory came with the vendor receiving the highest scores in four of the six criteria that make up the

product innovation category: quality and reliability (Intel scored 87 compared with an average of 74); richness of product features/functionality (Intel scored 82 vs. an average of 71); technical innovation (Intel scored 85 vs. an average of 70); and, finally, marketability (Intel scored 82 vs. an average of 67).

Solution providers said Intel's impressive product blitz in the past year put the chip maker at the top of the product innovation pyramid. With a product onslaught that began with the Woodcrest Xeon 5100 dual-core chip and Core 2 Duo last summer and continued with the launch of the quad-core processor in November, Intel leapfrogged past AMD, solution providers said. Of course, AMD has just fired back with the release of Barcelona last month, calling it the industry's first native quad-core processor.

Joe Toste, vice president of marketing for systems builder giant Equus Computer Systems, Minneapolis, compares the contest between the two bitter rivals to a fight between boxing legends Muhammad Ali and Joe Frazier. "It's like an infinite boxing match," said Toste of the product innovation punches being thrown by the two vendors. "It gives the customers more choices and makes for a healthier channel ecosystem. It allows the channel to position itself against multinationals and allows new systems builders to enter the market."

Toste said Intel's product onslaught hit AMD hard. In late 2005, about 25 percent of the systems that Equus built went out with an AMD processor. That has shrunk to 7 percent in the last year, he said, leaving Intel holding a whopping 92 percent share of Equus' systems business. Dell's taking on the AMD line definitely impacted AMD's share, Toste said.

"AMD had everything going for it as 2006 started," Toste added. "Intel literally turned the tide in the second half of the year. The lion roared and came back, and we continued to see that in the first half of 2007. The AMD competition has made Intel a lot more empathetic and understanding toward their customers. Now it's up to AMD to battle back."

Intel is so highly regarded because of its outstanding product reliability, quality and world-class institutional support for the channel, with standard motherboards and advanced warranty replacement, Toste said, adding AMD has made gains in such areas, but Intel holds a decided advantage.

"What Intel has done over the last 10 years has made it a trusted and reliable partner," he said. "Intel is far, far ahead of everybody in terms of how they listen and support the channel. No one can touch them."

That said, Toste expects AMD's quad-core Barcelona product to have a big impact. He said that AMD could double its share of the Equus systems business to 14 percent by the end of 2008.

Intel is also taking it up a notch with a new innovative mobile motherboard program that could ultimately open the door to the same type of motherboard standardization that powered the astronomical desktop and server systems- builder business explosion, Toste said.

Right now, every notebook motherboard is tuned and integrated to a specific product. The standard motherboard being spearheaded by Intel could be used in different notebook chassis. "Within the next 12 to 18 months, we will be able to buy packs of Intel mobile motherboards and integrate them into various manufacturers' notebook PC shells. So instead of us going to the whitebook ODM and buying the whole thing, we can take the mobile motherboards and marry them to shells from different manufacturers, and give us more control," Toste said. That's a huge breakthrough, he said.

He praised Intel for its perseverance and continued investment to drive a healthy whitebook channel ecosystem. "The level of innovation Intel is providing for channel partners here is amazing," he said. "I am pretty surprised at how committed they are to this. I want to quadruple my notebook business. And I think it's possible over the next couple of years with Intel driving the notebook ecosystem like they did the desktop and server markets."

Next: Serving Up Innovation