CRN Exclusive: Intel Exec On Why Its Small-Form-Factor Products Are The Next Big Opportunity For Partners

Small Form Factor Is The Next Big Thing

Although the PC market is experiencing sluggish sales, one segment of the market is defying gravity -- small-form-factor PCs, which squeeze desktop-like performance into small devices.

Intel has tapped into the small-form-factor segment through its own products -- the NUC, or Next Unit of Computing, and the Compute Stick ’PC on a stick’ dongle. These devices, which are on display this week at the Intel Solutions Summit in Orlando, Fla., contain an array of specialized applications, such as digital signage.

The small-form-factor segment contains ample opportunities for partners, and Intel said that more than 1,500 of its North American channel partners already are looking at applications for the Compute Stick. John Deatherage, director of product marketing at Santa Clara, Calif.-based Intel, talked to CRN about what partners can look forward to with Intel's small-form-factor products.

Intel's recently announced Skull Canyon NUC will contain better performance and graphics for the enthusiast and workstation segments. Why did you focus specifically on enthusiast customers with this NUC?

In general, we believe that small form factors are a growing category among the desktop segment, which is flat to down overall. We have a good balance of selling NUCs overall between the consumer space, small business and PC-like embedded spaces. It's pretty much going one-third in each of those directions.

But another way to look at the desktop market is that there's another really good growth area there -- the enthusiast segment. The thought was, can you go after two growth vectors with one product, and that's where we thought that small form factors geared toward enthusiasts would be something that would be well received. We tend to do better with small form factors in mature markets and we tend to see the enthusiast segment taking off faster in mature markets as well, so the thought is, could the small-form-factor model tie well with the enthusiast segment?

What particular type of enthusiast customers are you looking to attract with Skull Canyon?

There's a little push and pull with the Skull Canyon because enthusiasts like high performance, and physics will tell you if you take a larger form factor you'll get the best performance. But technology these days allows us to get strong performance from a small form factor. We know a lot of enthusiasts like to take their machines around with them, so we think the Skull Canyon form factor would be very easy to transport around and would have a good gaming performance. For your best gaming performance, users could also use Skull Canyon in conjunction with an external graphics module such as Razer Core. So we kind of see that there is a play with this product.

Do you see the Skull Canyon NUC being attractive to other markets beyond the enthusiast segment?

We've got this category going over the past few years, but now we're taking it to particular segments where we see growth, like the enthusiast segment.

We do have some secondary markets as well where we think this type of product could have a strong play. That would be more the ’pro-sumer’ type, a different type of enthusiast -- not the gaming enthusiast as much as the content management and video-editing type of enthusiast, who wants a clutter-free type of desktop. This NUC has the horsepower to do a lot of managing of more complex videos and such. Workstation is another secondary market we're looking at as well with Skull Canyon. For instance, it enables 3K or 4K monitors running side by side by side that engineers working on their projects could use. We looked at this product and said, not only does it hit a growth space where small form factor might be desirable for gaming enthusiasts, but there are also more opportunities with this product as well.

How do you see small form factors, like Compute Stick and NUC, as fitting into Intel's vision of workplace transformation?

My division's called the Channel Innovation and Solutions Division … and we used to be primarily the motherboard group for around 20 years. … We looked around us and said there are a lot of players in the motherboard business, and their quality is good, and they're there for the transitions of the processors -- but are we really adding a lot of value as a motherboard organization, or should we repurpose those resources to drive new categories and use form factor as our main vector to do that?

So we repurposed our resources to go from motherboards to the NUC, and the idea is that we think this new form factor will help drive workplace transformation, whether by making it more energy-efficient or a less cluttered workplace. Small can do what big power used to be required for, and we see a lot of advantages for that in workplace transformation.

Can you give us a specific application use case where the NUC drives workplace transformation?

A vending machine used to sit there and you would walk up to it, insert your money and something would fall to the bottom and you'd take it, and that was a decent purpose.

But now a vending machine could be a digital sign, so when it's just sitting there it could be advertising something. You could have a touch interface on it that might give you far more flexibility in terms of the options for the person that walks up to that machine. You could even potentially get social media involved on that machine. You have all these options that give more than a vending machine, that's a different type of workplace transformation where you're taking something, adding compute to it, and making it far more capable than it used to be.

How do you see the small-form-factor PC market in general as it continues to transform?

This is not exclusive to Intel -- as you know, mini PC has taken off with a number of our partners, whether they're ODMs like Gigabyte or MSI, or OEMs like Asus, Dell and Lenovo. Part of what we did with the NUC was we drove that mini PC category and we believe it has helped transform the workplace and create new opportunities in the marketplace where compute is getting to areas you've never seen it get into before. Compute takes it to the next level, so now we've got it down to gum-stick form-factor-scalable computing. As we migrate Core down at the lower power architectures and we get more capable there, we're scaling the Compute Stick up now from Core m3 to Core m5. Now we're taking compute power to even smaller form factors with the Compute Stick, enabling different types of capabilities than those of the NUC.

Talk about the use cases for the Compute Stick.

With Compute Stick, any monitor or TV with an HDMI port on it can be a transformed into a computer. Giving your TV a computer mode, and getting more out of your TV is a simple vector for the consumer. What we're saying to consumers with Compute Stick is to get more out of your TV and the vectors around that are to tweet, stream or play.

In the embedded space the Compute Stick is easier to pack away into a system that didn't have compute power before. Now I've got a Compute Stick embedded in there and a full capable device embedded into that system. So, similarly to the NUC and motherboards, we're bringing our fellow travelers along with us. We're showing the product and getting that feedback and working with other partners in the industry.

Can you talk about any specific business use applications where we're seeing the Compute Stick utilized?

We can't openly discuss some applications that are still being developed by partners, but the ones that are more obvious and less innovative for Compute Stick are mostly used in the home today, for Compute Sticks sold through Amazon and NewEgg.

We've also seen a number of digital signage applications we're looking at. It's more of an entry-level digital sign, the Compute Stick will do a fine job driving 1,080p on a monitor in a smaller business setting.

We've also seen some cool telco bundles come out of Asia-Pacific where Compute Stick will be bundled with the set-top box and advertise streaming capabilities, being able to go beyond what the cable box can do for you in return for a bump in the subscription price of their cable service.

At CES, Intel showed off new Compute Sticks packing the Skylake Core m3 and Core m5 processors -- what are the performance boosts for these new versions?

So we announced we would use two Skylake SKUs on the Compute Stick, one based on Core m3 and the other based on Core m5 with vPro. The Core m3 is being sampled today and will go into production in early May, and the Core m5 will go into production around two weeks after that.

They're out the second quarter, and we'll be in high-volume manufacturing for both of those SKUs. The other thing we announced at CES was the new Atom-based stick based on Cherry Trail processors. That is in high-volume manufacturing today and we've been in production with them since January.

We had a point product last year where we were testing in the marketplace based on the Atom Bay Trail processor and we got a lot of feedback on it, [and we learned] it was a great idea but we could improve on the Wi-Fi performance and the graphics, as well as use an extra USB port. We did all that and came out with a Cherry Trail version. We also said we're going to go beyond a point product into a road map [for Compute Stick].

How has Intel's Technology Provider base been in driving small-form-factor sales, particularly the Compute Stick?

The channel is fast and nimble and is able to take new things and bring them into production a lot faster than some of our bigger accounts. Our message number one is to keep doing that; we really appreciate that. Our commitment to [the channel] is that we'll keep bringing innovative building blocks to you.

Our channel is all about innovation. These are small companies… a lot of folks that worked for bigger companies that had great ideas and got off on their own with some cool creative new ideas. We think our innovation and our building blocks let our channel partners do that. We will commit to providing those building blocks, but in return we need feedback on what you need us to be doing. That's where our building blocks map into a couple areas where it's important that our channel's strong suits are being nimble and creative.