Exclusive: Intel Boosts 2025 Partner Funding, Cuts Direct Partner Coverage

In his first interview as Intel’s new global channel chief, Dave Guzzi explains how the chipmaker is increasing partner funding in 2025 as well as why it’s reducing direct partner coverage, changing its market development funds model and narrowing its ISV focus to AI.

After exploring cuts within Intel’s global partner programs last year, the semiconductor giant is increasing funding for partner incentives and investments in 2025 while reducing its direct partner coverage, Intel Global Channel Chief Dave Guzzi told CRN.

Guzzi disclosed the changes to Intel’s partner programs, which will also include a forthcoming shift in how it deploys market development funds, in his first interview as the new vice president of Intel’s Global Partner Scale organization.

[Related: Intel’s US Channel Chief To Lead New North America Partner Group: Exclusive]

“We’re actually increasing our funding for partners in 2025 over what we invested in 2024. That's a massive commitment to the channel,” said Guzzi, who took over as Intel’s global channel chief from Trevor Vickers in October as his parent division, the Sales and Marketing Group (SMG), underwent deep spending cuts and a reorganization.

“I think that will give us and our partners some wind in our sails at the same time that we've got some really cool products coming out,” he added, citing products like Intel’s Core Ultra chips for AI PCs as well as the Xeon processors for data center inference workloads.

However, the funding increase is happening at the same time Guzzi’s group reduced coverage by an unspecified amount of channel partners and non-AI ISVs. For impacted channel partners, this means they will no longer work with an Intel salesperson for Intel-related matters and will instead have to rely on distributors for such things.

“It’s very much just a financial expansion of the existing programs, in some cases, with a smaller number of partners, which means, of course, there’s even more money available to each of those that are still participating,” he said last week.

Guzzi also disclosed that Intel about a year ago reduced the number of authorized distributors it works with by an unspecified amount in the company’s Europe, Middle East and Africa (EMEA); Asia-Pacific Japan (APJ); and China regions.

The changes in partner funding and coverage were made after SMG was told to cut more than 35 percent in costs last August as part of Intel’s larger initiative to slash more than 15,000 jobs, or 15 percent of its total workforce, and over $10 billion in costs in response to worsening financial conditions, as CRN exclusively reported.

“We wanted to free up both our people and our money to be able to be more invested in things that we thought were the highest value and would give Intel the greatest return,” Guzzi said.

As Intel’s new global channel chief, Guzzi is a relative newcomer to the company, having only joined in 2021 as general manager of global channel sales before moving to become vice president of global distribution and partner sales early last year.

However, he previously served on Intel’s U.S. Channel Board of Advisors for more than nine years, including as its president, while he worked in leadership positions at solution provider companies such as Equus Compute Solutions and Dedicated Computing.

“I spent 30 years in the channel before joining Intel, and I have huge respect for channel partners, because their jobs, in many ways, are far more complex than any of the individual suppliers’ responsibilities,” Guzzi said.

What Increased Partner Funding Means

While Guzzi said Intel is increasing funding in 2025 for partner investment and incentive programs, he and a company spokesperson declined to say how much funding has been set aside this year or by what percentage the funding increased from 2024.

“All of our key partners know how difficult this has been for Intel as we invest in foundry, as we don't have the margins we used to have, etc. So we have less free cash to operate with, but at that very time, we've decided to increase our partner investments year on year,” he said.

Whereas Intel puts incentives in place to reward partners after they achieve certain outcomes with the company’s products, investments are made in partners upfront for co-marketing and co-selling activities, according to Guzzi.

“We believe they will go out and create demand for our products. So we commit that money to them up front, and then we are the co-investor in them and help make sure that they actually win, so that then we get a return on that investment,” he said.

How these funds are used depend on the partner type, according to Guzzi.

For distributors, partner funding is used in two ways: to help “drive the sales of CPUs into companies that manufacture PCs” and to encourage the sales of Intel-based systems from OEMs such as Dell Technologies, HP Inc. and Lenovo.

For systems integrators, the type of funding depends on their business model. For some, the funding may be used for non-recurring engineering funds to help them create products and solutions with Intel’s chips. In other cases, funding can be used for winning large customer deals through systems integrators when Intel is faced with a competitive bid.

Then there’s market development funds and sales development funds, which are used to create demand for Intel-based products and solutions, generate leads on customers and then help partners close deals for such products and solutions.

Guzzi said these kinds of activities are meant to help partners develop, market and sell Intel-based solutions in profitable ways.

“We recognize the importance of helping defray the investment cost to create the solutions in the first place, seek out the opportunities, drive it all the way through their own sales process, and then, in the end, meet the financial requirements for their customers to say yes, so we try to help along the way,” he said.

An executive at a national systems integrator said he is glad to see Intel increase partner funding because he has witnessed firsthand AMD’s growing influence in the channel.

The executive, who asked not to be named to speak frankly, recalled telling an Intel channel executive months ago, “AMD is paying significantly to basically gain influence with our sales teams, and you guys just don't want to do anything. So I don't know what else to tell you, either match it or don't, but that’s how this is going.”

“They're just waking up to the fact that AMD’s starting to eat at us, and it is working,” the systems integrator executive said.

‘Significant’ Change Coming To Intel’s MDF Program

As part of the changes Guzzi’s team is making to Intel’s global partner programs, the channel executive said the company plans to make a “significant shift” in how the company reimburses partners for MDF activities in the first quarter.

Historically, Intel’s MDF model has been compliance-based, according to Guzzi. This translated into the chipmaker reimbursing partners for spending a pre-approved amount of money on marketing activities related to Intel’s products.

With the forthcoming change, Intel is moving to an outcome-based MDF model, where partners must prove that they achieved certain goals, like generating customer leads, for pre-approved marketing opportunities before they get reimbursed by Intel.

“What we're looking at doing instead is holding ourselves and our partners accountable to, ‘Well, what do we actually get out of that spend?’ and being less worried about, ‘What vendor did you use for this, show me a copy of the receipt,’ and being much more focused on, ‘What result did we get out of it? How many leads did you generate?’” he said.

This change in how Intel reimburses MDF projects will shift the impetus on generating customer leads from Intel to its partners, according to Guzzi.

“Very specifically, we might move to a model where, instead of our partners expecting us to create leads, we supply funds to them so that—because they're experts in the markets they serve, whether it's geographic or segments—they then spend that money and they create leads with the money that we're investing with them,” he said.

While Guzzi admitted that it’s “going to take a little time for partners to fully embrace that” because large vendors like Intel have historically handled lead generation, he believes it’s a better way forward for both the semiconductor giant and the channel.

“My view is that they really know their markets, and we would rather invest in them where they think it's best, and then let's see what you can do to create leads for both of us,” he said. “Instead of this big Intel company that makes CPUs trying to create demand for a solution in a particular segment in a certain region or [geography].”

Multiple partners said this move falls in line with what they have seen at other vendors.

“Having this be outcome-based is a great move. They shouldn’t be spending their money on companies that just check the box,” said Christopher Cyr, CTO at North Sioux City, S.D.-based Sterling, which is No. 54 on CRN’s 2024 Solution Provider 500 list.

Asked whether this change will result in Intel partners receiving roughly the same amount of money for MDF reimbursements on average, Guzzi said it will “probably be comparable.”

However, the global channel chief said, he would like to see partners “think through entire campaigns rather than individual activities.”

“I would hope, as time evolves, that partners would do fewer bigger campaigns that were more comprehensive and then fewer individual activities that might be a bit one-off,” he said.

Intel Narrows ISV Investment Focus To AI

When Guzzi’s group was faced with a mandate to make cuts, his team decided to narrow the company’s investments in ISVs to those whose primary focus is AI.

“One of the things we did is in our ISV investments, we decided that we really needed to narrow [it] down to just AI,” Guzzi said.

This means Intel’s Global Partner Scale organization will stop investments in other ISV areas, like security, the global channel chief said.

“[It’s a] critical market, no doubt about it, but for our work, we felt that to execute against the best opportunities with our channel partners, AI today was going to make the most sense for us for some of the broader ISVs,” Guzzi said.

The move to focus on AI ISVs was celebrated by several partners, including Mike Trojecki, senior director of AI practice at St. Louis, Mo.-based systems integrator World Wide Technology, No. 7 on CRN’s 2024 Solution Provider 500.

“If they're saying they're focusing on the AI side of the house from an ISV standpoint, that's exciting for us, because that's a key growth area for us,” said Trojecki, who added that “some of these ISVs [will] be a critical part of the solutions we offer.”

Guzzi nor an Intel spokesperson declined to identify other ISV areas impacted by the company’s reduction in partner coverage.

“While security remains a cornerstone, Intel has moved away from one-off custom software optimizations for niche applications, focusing instead on scalable solutions that benefit a wider range of partners,” the Intel spokesperson said in a statement.

“On that note, partnerships for workloads with minimal growth potential or limited alignment with Intel's roadmap, such as legacy or highly specialized use cases, have been scaled back,” the representative added.

Intel Reduces Direct Partner Coverage

Guzzi suggested that Intel has also reduced its direct coverage of channel partners by an unspecified amount but offered few details.

“There's probably a fewer number of accounts that are covered when we had this downsizing. We certainly lost some sales folks, and so there may be some customers that were directly covered in the past that won't be now,” he said.

In a follow-up response, an Intel spokesperson said, “any adjustments in covered partners are part of a strategy to enhance efficiency and effectiveness across the ecosystem” when it came to systems integrators, channel builders and the broad channel.

“These decisions are made to ensure Intel and its partners are well-positioned for mutual growth and success in a rapidly evolving market landscape. After all, our partner and regional ecosystem— and how we drive their success—is a priority for Intel as we transform,” the representative added.

Guzzi did note, however, that the increased partner funding will help distributors cover gaps with some partners who lost direct coverage by Intel. For the past several years, Intel has funded programs for distributors to provide Intel-related resources to channel partners who do not have Intel salespeople calling on them.

“They cover all our customers, but what we ask of them for some accounts will increase because those accounts may have lost their Intel salesperson, so there's some additional incentives in place for distributors,” he said.

One partner impacted by Intel’s coverage change is Houston, Texas-based systems integrator Mark III Systems, according to its vice president of sales, Chris Bogan. However, the executive told CRN that the company hasn’t seen any negative impact on its business with Intel after getting moved to a salesperson at distribution giant TD Synnex.

“We’ve been able to get competitive investment funds where we need to. It’s always nice to have an Intel person, but I don't know that we've seen anything that's been concerning or like, ‘Hey, we've lost support that we used to have and it's costing us business with Intel,’” Bogan said.

Why Intel Cut Authorized Distributors Abroad

When it came to reducing the number of authorized distributors in the EMEA, APJ and China regions, Guzzi said two of the main reasons were complexity and overrepresentation.

“When you think about APJ and the number of countries and how disparate they are, some of the countries have multiple islands as their area of operation. It’s very difficult for distributors to cover a number of different countries,” he said.

As for EMEA, Guzzi said, “there’s all kinds of challenges with tax laws, languages […] and some of the non-industry challenges that they've had to deal with.”

However, he added, Guzzi’s team also determined using analytics tools that Intel had “too many” distributors in EMEA for the size of the region’s total addressable market.

“Some of that is just a little bit of the way EMEA has shifted to become more of a consumption market than a billings market. There are fewer companies that manufacture, so they probably needed fewer distributors to serve them,” Guzzi said.

Guzzi said it took roughly nine to 10 months for his team to determine where to make cuts in Intel’s distribution network and called the process “very difficult.”

“In some cases, we had to end long-time relationships with really good distributors [because they] just didn’t fit the model going forward,” he said.