Dual-Edged Sword

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Intel is banking on a retooled micro-architecture and two new channel initiatives—a managed services play and an improved mobile platform—to hold back advances from rival Advanced Micro Devices in 2006.

In an exclusive interview with CRN on the eve of two key conferences, President and CEO Paul Otellini; Bill Siu, vice president and general manager of the channel platforms group; and Steve Dallman, director of North American distribution and channel sales and marketing, laid out product and channel plans that Intel expects will be key for its partners over the next year. Intel executives will detail upcoming products at the Intel Developer Forum (IDF) this week followed by a channel update at the Intel Solutions Summit (ISS) for its Premier partners starting on March 12.

Solution providers say those executives will need to present a compelling lineup to demonstrate strength against AMD, which continues to gain market share while orchestrating a more organized push into the corporate arena. Last week, Intel said it would miss first-quarter revenue estimates “primarily due to weaker-than-expected demand and a slight market segment share loss.”

“AMD has a lot of momentum in the market,” said Fred Schlaffer, president of B3 Computers, a Gwinn, Mich.-based system builder and Intel Premier provider. “Intel needs something to counter the one-two punch of AMD.”

Intel’s efforts this year will be two-pronged. New brawny, but low-power, chips based on a redesigned architecture will start shipping in the second half and will be complemented by new channel initiatives, said Otellini. Intel feels so confidentabout the redesigned architecture, according to sources inside Intel, that the Santa Clara, Calif., company will reinstitute product benchmarking this year.

“By our own technologists’ estimates, this is the best product lineup we’ve had perhaps in a decade. In all segments,” said Otellini. “We have the factory lineup. We have four 65-nanometer, 300mm factories coming online.” Moreover, Otellini said Intel has spent the past year making sure each of its key platforms, around which Otellini reorganized the company last year, has a strong channel component. “Every platform we are working on, without exception, has a channel aspect to it that we believe offers the channel an equal opportunity to grow their business along with the OEM customers,” said Otellini.

‘NOT STANDING STILL’
Otellini may feel confident about Intel’s latest plans, but the world’s largest chip maker has clearly struggled to get to this point. It’s been nearly two years since Otellini’s predecessor, Craig Barrett, fired a public missive at employees admonishing them for failing to meet several key product release dates. As Intel worked to execute a retooled product schedule last year, AMD shipped the industry’s first x86 dual-core server processors. Intel’s rival ended the year with 16.4 percent of the server market, more than doubling its take, according to Mercury Research. Then, in the fourth quarter, Intel could not meet demand for some of its desktop chipsets, resulting in a shortage of motherboards for many system builders.

This came at the same time AMD was launching a push into the corporate market with its first stable image platform for desktops and a newly minted VAR program.

Next Page: Intel's Managed Services Play; New Channel Notebook Initiatives

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