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Partners: New Intel CEO Bob Swan Needs To Focus On The Channel

‘The channel is oftentimes overlooked. We're hoping for good things,’ CTL’s Erik Stromquist says of Intel’s new CEO, Bob Swan, among a chorus of partners calling for the leader to put a greater focus on the channel.

Intel partners applauded the company's appointment of financial chief Bob Swan as CEO but said it's important that the new leader put a greater focus on the channel.

"The channel is oftentimes overlooked. We're hoping for good things," said Erik Stromquist, president of CTL, Portland, Ore.-based system builder that supplies computers to schools and one of many companies that relies on Intel for components to fulfill orders.

[Related: 5 Key Points About Intel Permanent CEO Bob Swan]

That feeling was shared by Bob Venero, CEO of Future Tech Enterprise, a Holbrook, N.Y.-based solution provider and top Intel enterprise partner.

"My hope is that Swan can right the ship, which is not on a great course right now as far as the channel is concerned," he said.

His company has taken a hit from Intel's CPU shortage, which has lasted several months and cost Future Tech $4 million in lost sales at the end of 2018. (Intel expects the shortage to end mid-2019.)

"We were not able to fulfill those orders for desktops, servers and notebooks as a result of the processor shortage," Venero said. "Fifty percent of those orders were lost because that budget for those purchases did not roll over into the new year."

The issue has created an opening for AMD, Intel's rival that has a small but growing market share for processors in client computers and data centers. Venero said he has been approached by AMD to carry its CPUs as an alternative to Intel. But the CEO thinks Swan has what it takes to turn things around.

"With Bob Swan, Intel has chosen someone that has domain knowledge and knows what is going on in terms of the delivery issues, security issues like Spectre and Meltdown vulnerabilities, and the financial issues associated with those problems," said Venero. "Having someone with that kind of knowledge is a huge benefit to the channel."

In the seven months Swan served as Intel's interim CEO, he directed $1 billion in new expenditures to improve the company's manufacturing capacity, reorganized the company's manufacturing leadership team, supported the build-out of Intel's new GPU team and signed off on three acquisitions while a mega-deal to buy data center vendor Mellanox is reportedly in the works.

With Swan coming into the permanent CEO role with decades of CFO experience, Randy Copeland, CEO of boutique PC builder Velocity Micro, said he's "not always excited to have finance people in charge rather than product people," but he's happy to see the CEO search come to an end.

"He's been in place for 7 months, so I'm hoping to just see continued progress on the execution of the roadmaps, increase customer engagement, and some innovation would be a nice bonus," Copeland, whose company is based in Richmond, Va., said in an email.

For Dominic Daninger, vice president of engineering at Nor-Tech, a Burnsville, Minn.-based system builder in the high-performance computing market, Swan needs to lead Intel in an increasingly competitive market for artificial intelligence workloads.

"They're making some progress in AI and [machine learning] areas, but they've got some interesting challenges coming from Nvidia," whose GPUs are increasingly being used in place of general-purpose processors for such applications, Daninger said. "They also have AMD nipping them at their heels."

On the channel organization side, Daninger said Intel has had some communication issues with partners, but he's recently seen signs that the company is improving.

"It does seem to be getting better, even before this announcement," he said. "Talking to our marketing person, she mentioned she got a call from one of Intel's folks to review the status of market development funds. They've had some issues in that area. We were pleasantly surprised."

Michael Tanenhaus, CEO of Mavenspire, an Annapolis, Md.-based Intel partner, said Swan just might be the key ingredient Intel needs in 2019, which will be a critical year for innovation and execution.

“[Swan] will be put in an interesting place. If you talk about product launches, most of the Intel people are pretty excited because there’s as much new stuff coming out in one year across multiple, different product lines as there has been over the last decade. So it’s a really interesting, pivotal year where they’re bringing to market stuff that has been in R&D for decades,” said Tanenhaus. “So there’s all of this new technology that’s world changing coming out of Intel this year.”

Tanenhaus said Intel likely made the right move in choosing a longtime CFO who knows the Intel ropes.

“When an operations or finance person goes to the big seat, there’s always that question, ‘What are they going to bring to the table?’ If [Swan] can bring the stability and financing to really drive an opportunity for them – that’s amazing,” he said. “Think what happened when Tim Cook took over for Steve Jobs. Everyone spent a couple of years saying, ‘Are they going to lose their way?’ I think a lot of people were pretty negative about it. But they crossed the trillion dollar [market valuation] mark. It’s sometimes getting your house in order operationally, is the thing you need to win.”

Mark Haranas and Steve Burke contributed to this story.

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