One thing is for sure Intel is now
one of only about handful of companies that can afford to manufacture
digital chips at the leading-edge, essentially the members of the G450C
group – IBM, Intel, Globalfoundries, Samsung and TSMC. And with capital
expenditure plans of $13 billion in 2013 alone Intel is already betting
the company's future on manufacturing. So the other side of the concern
about design expertise is that Intel is going to focus on its
manufacturing expertise and pursue the foundry market to the detriment
of chip product definition and delivery.
In addition, the
yin-yang position begs questions about how the dual-leadership is going
to work in practice. The concern here would be that the Intel board felt
neither Krzanich nor James had the credentials to lead the company on
their own. Rather than appoint a single person to lead the company has
decided to yoke two candidates to pull side-by-side. There is clearly a
risk of policy made by committee and a lack of clear vision.
has become quite normal for the role of president to become a nominal
one that is also held by CEO. Where they are split both are usually on
the board of directors and the president reports to the CEO but usually
there are clear lines of demarcation and seniority; often in terms of an
age difference with a president serving as a CEO-in-waiting. That does
not seem to be the case here, although Krzanich is about five years
older than James.
However, Renee James should not be
underestimated. Like Krzanich she is a long-time Intel employee. She
joined in 1987 as product manager for the 386 family of motherboards and
systems. That is just about the time Intel was defining what the IBM PC
should be in terms of its component bill of materials just as Microsoft
had defined what it should be in terms of software. It marked the
beginning of golden era for Intel.
James has done a good
managerial job at software and services and helped expand the business
ten-fold since 2010, largely through the acquisition of McAfee and Wind
River Systems Inc. Those companies were turned into subsidiaries and
left largely to continue the work they were doing before while adding to
Intel's software research base.
But it is clear that application
knowledge and software is a key part of the future of any company that
is in the business of selling software-programmable integrated circuits.
Such companies need to provide system-defining firmware, middleware and
application software to their customers. Some customers will require
less but many will demand complete end-to-end platforms so that they can
focus on one small piece of differentiation and get to market quickly.
system knowledge part of the equation was true in the days of the
desktop PC and something that Intel exploited well. It is a trend that
has been apparent in the mobile device space that Intel has found it so
hard to penetrate. The fact that Renee James holds a seat on the board
of directors of Vodafone Group plc (Newbury, England), the world's
second largest mobile phone service provider, should be noted.
conclusion: the board of directors appears to be saying: "Brian, don't
mess up the good manufacturing engine we got going and lean on Renee to
work on the future, which is going to be soft." It could work if they
don't get in each other's way but the question-mark remains as to
whether this, with its lack of external culture, is enough to shake up an Intel that right now is living on
its past momentum.
Related links and articles:
Intel CEO, president to implement undisclosed strategy
Intel names insider Brian Krzanich CEO
Intel, Samsung to dominate chip capex in 2013
Intel's 450-mm wafer spend starts in 2013
Rethinking Intel's greatest asset