Intel Marks 10th Anniversary of Channel Programs

While the anniversary marks an opportunity for Intel's channel executives to reflect on past achievements, they're also serving notice that they plan to aggressively move the new group forward. Intel's channel organization will play a big role in selling the company's new platform-oriented technologies, such as its upgraded Centrino wireless platform announced last week, its Vanderpool virtualization technology and an upcoming 64-bit-capable Pentium 4 processor.

Marketing efforts on tap for 2005 will be particularly aggressive in emerging markets, though domestic reseller efforts won't be neglected.

"We grew from one channel customer in China to about 160,000 around the world today, as well as 1,000 distributors," says Sophia Chew, vice president of Intel's Reseller Channel Organization. "We have a presence in more than 110 countries."

"If you go back 10 years ago, about 85 percent of the CPUs we sold [in North America] via distribution went through about 15 accounts," says Steve Dallman, Intel's director of North American distribution and channel marketing.

Today, that model has been turned on its head.

"We ship to between 12,000 and 15,000 of our Intel channel members each quarter in North America alone, and we touch about 40,000 customers, either through mail, phone, training or events each quarter," Dallman says. "That has caused us to reshape how we bring products to market. Ten years ago, we'd come out with a new product, and it didn't get to the channel for several months. Today, we try to stock products into the channel a week or two before we launch them."

Now, with the formation of its new channel group, Intel is intent on maintaining momentum in market areas that aren't saturated. A case in point is the recently launched Internet Cafe PC aimed at the Chinese market.

"In 2004, we added about 20 new countries to Intel's channel program," Chew says. "For 2005, a key goal for us is to grow deeper -- improving our relationship with the customer in countries where we've established new programs."

Chew points out that Intel can't have personnel stationed everywhere to call on every single account. So the idea is to draw on the company's experience in North America to roll out programs that can train its resellers in sales, distribution and account relationships.

Chew's strategy is seconded by Bill Siu, who was appointed last week to head up the new Channel Products Group. Siu moves over from his current position in charge of desktop processors and platforms as vice president of the Intel Architecture Group.

"We want to continue to strengthen the technology, training, sales and other capabilities in mature markets while continuing to expand globally, in terms of the reach of the program and the products we'll bring to specific geographies to meet their needs," Siu tells VARBusiness.

Domestically, Siu says he doesn't plan any major tweaks of Intel's channel programs. However, he vows to be a hands-on manager who will meet with VARs and help drive forward Intel's new "platformization" strategy.

Under that approach, Intel hopes to break away from a marketing story that's only about faster processors. Instead, it is emphasizing nonprocessor technologies, such as faster memories and I/O interconnects. The idea is that such features will drive overall increases in system performance beyond what can be accomplished simply by boosting the speed of the processor.

In that regard, Intel is preparing to introduce its first multicore processors later this year. Intel is also moving swiftly to deliver a feature, called virtualization, which was previously available only in software. Virtualization allows a platform to run multiple operating systems and applications in independent partitions on a single processor. Intel last week said it plans to offer Vanderpool in desktop processors to be introduced later this year. (Vanderpool will also appear in server-side Itanium systems in 2005.)