As far as strategic partnerships like the one Intel has with SAP, are these strategic partnerships becoming more of a focus? Is there a sea change in how Intel is thinking about those?
We've always worked with the ecosystem, but to some extent, yes. I do think we're getting a little bit more strategic about it. And the reality is, we are a hardware company, and that's our foundation, and that's what a lot of people view us as providing. But over the last several years, we've invested incredibly in our software capability, and I honestly think it's been a learning curve that we've gone through inside of the company to view hardware and software as a combination, as so much more powerful than hardware alone. So we used to do the work to enable a new technology in the industry. Sometimes it would be very basic, like if we add this into the chip, it will not break XYZ application. That's a pretty low bar.
So now we're sitting there and stepping back and saying with these key partners and these leaders in the industry, if we add this into the hardware, it will totally accelerate the performance. An area where I think we saw this play out for us in a meaningful business way is the AI space. I've talked to you before about how generation to generation, our hardware improvements in Xeon drove a 2X increase in performance. 2X any time in a generation is phenomenal. Like you're happy as a product manager. You're pretty happy if you got 2X performance. That's not 2 percent. That's 200 percent, right? But then we got to 14X because of the software work we did. And that's like a real ‘aha’ moment for hardware people to say, ‘You know what? I got to make sure I'm investing for this.’
So now when we do product planning, we have software planning combined with the hardware product planning. One of our executives says, ‘leave no transistor behind,’ meaning no transistor on that piece of silicon will go underutilized. So when you said, ‘Is there kind of a mentality change?” I do think there has been.
So it's not completely new?
It's more serious is what I would call it. So we would always have software plans, and we would always have hardware plans, and I won't say never the two shall meet. But I would say we pulled our software planning earlier into the product life cycle, so it's more involved at the beginning. And there are times, honestly, where we look at things and say we could do this in hardware, but it's better done in software. And again, I know that sounds super illogical when you start with the base of us being founded as a hardware company—to admit that a capability might be better delivered in software? That's a cultural change that we've gone through. And I would say it is a difference.