SAN JOSE, Calif. – For 45 years, Intel Corp.’s succession plan has been so orderly it was boring. With this week’s unexpected announcement that Paul Otellini will step down in May as CEO, the field to replace Otellin is wide open with a strong possibility of the first chief executive coming from outside the company.
Speculation about Intel’s next CEO cover the waterfront with the least predictable being the most likely. At this stage in its history, some think Intel needs its Lou Gerstner, a savvy star-CEO from outside its industry who can shake up the chip maker’s model and get ahead of a rapidly changing industry.
It’s anyone’s guess who can transform the x86 giant the way R.J. Reynolds’ exec Gerstner re-made the struggling IBM into a modern day services giant. But there’s a broadly felt sense that change is needed.
Intel’s core PC business is slowing. The Wintel duopoly that dominated it has fractured. Microsoft embraced ARM in Windows 8 and Windows Phone; Intel rides Linux and Android in servers and smartphones.
More importantly, the old Intel formula of following Moore’s Law looks like the wrong prescription for the next era. Increasingly, systems need greater energy efficiency, not raw horsepower. And new semiconductor nodes are coming more slowly and offering less bang for the buck in process technology investment.
“Intel still sees its advanced processes as key to its continuing success,” said Will Strauss, principal of Forward Concepts (Tempe, Ariz.). “It'll be interesting to see if Otellini’s successor is a physicist [like Gordon Moore], engineer [like Qualcomm CEO Paul Jacobs] or business manager [like Otellini]. I vote for an engineer with business experience.”
Otellini gets kudos for many accomplishments in his eight-year reign. His big shortfall has been failing to better position Intel in mobile markets that have supplanted PCs as the clients of choice. Intel’s latest Atom chips have a handful of design wins in smartphones and tablets, but they represent a few drops in a barrel full of ARM-based designs.
In the short term, Intel’s Ultrabook—geared to stem the rising tablet tide—has been a disappointment. Analysts said they will probably not reach even half of Intel’s target of becoming 40 percent of client shipments in the last quarter of the year.
Otellini, 62, was expected to serve until Intel’s mandatory retirement age of 65. The announcement that he will retire in May comes a year ahead of expectations, a sign of concern about the company’s future.
Paul Otellini's decision to retire at age 62 was unexpected.
So what’s next will probably be something and someone new and unexpected to chart a fresh course. Intel must re-think its mobile strategy. It probably will rethink its manufacturing strategy as well, including how it approaches the foundry opportunity.
They MUST find the new CEO outside.
The inside culture is just too strong to allow any change.
The "we've always done it this way" arrogance syndrome will not allow the necessary changes if not driven very strongly by an outsider.
What to do is actually not so difficult. Intel has fabulous assets and can leverage them to win and become even stronger than they are now.
Those unique assets are :
- Process technology. They are years ahead of TSMC on 3D finfet.
- They "own" the cloud (ARM is nowhere in servers) and they can drive its
future more than they even realise themselves. In particular, if they were
a little smarter and humbler, they could drive the cyber-security resolution
much much harder and define a security de-facto standard that the world
(including the ARM camp) would have to follow.
- Manufacturing capacity. Qualcomm went through hard times this year
because of TSMC. This industry learned a hard lesson. Apple MUST be
looking at using Intel's fabs to secure its future. The industry is struggling
to ramp up 28nm when Intel is already ramping up 16nm (more or less
equivalent to everyone else 20nm). They have 1 to 1.5 process node
advantage and they have HUGE capacity. The PC decline is freeing up this
very advanced capacity. Intel must open up to fill its fabs.
In fact, the next CEO should have a lot of fun if he/she is smart enough !
crazy thought but what if Elop is brought in to secure flagging wintel and flagging Nokia share of mobile. It goes without question that noone can displace Intel from the PC world as we know it. even if Sylvia Summer runs it (remember Trident Microsystems..)Whether PC as we know it will continue to grow or not is the key question - If one agrees with this, then the new CEO needs to be one that can win mobility & the internet of things.
I think a manufacturing or tech honcho, internal or external, can only save Intel by restructuring it as foundry, where it can utilize fab tech strength and not worry so much about defining key products, which go from fad to commodity pretty quickly these days.
to conclude, intel is doomed.
deeper reason is it's board structure.
it's made up with some non-interested, non-professional, retirement fund managers.
you can keep on dreaming they can save intel.
if by some way intel could shake up its board by including me(chair), irwin jacobs, maybe also bill gates it might get a chance of revival...
Intel needs new technology to get itself out of the current mess. Remember when they were getting crushed by the japanese in the DRAM market, it was their processor technology that gave them a second chance.
A marketing or sales ceo cannot solve their issues. Intel has succeeded for so long because it is a very engineering focussed company all the way to the top. During Intel's heyday, all the ceos were engineers. Only lately have their ceos been non-ceos and they have started to slip - co-incidence?
I think Mitt Romney is looking for a job. :)
My guess is that Andy Bryant will step in as interrim CEO. (He's already Chairman of the Board and has been the corporate conscience since the Andy Grove days.)
Intel can't go back to an Engineering CEO; Otellini led it out of the wilderness from an engineering company to a marketing company. That was necessary when the PC industry went from a growth market to a replacement market.
They are already competitive with ARM in the cell phone market, they just didn't do it on 4G, so you won't see them make inroads against ARM until next year. Unfortunately, the stock price and stockholders (and thus the board) ran out of patience with Otellini.
The company needs to fix it's cycle time if it has any hope to survive. 6 years to plan, design and implement a processor is a non-starter in a competition with ARM. They highly vulverable and will lose massively in a war of manuever. (That's how they ended up on 3G instead of 4G for smartphones today. Took too long to get to market.)
Intel also needs to quit running the company on the basis of everything they learned with PCs over the last 3 decades. That's the innovator's dilemma in spades. An external leader that can shake up Intel's top management, clean house, reinforce Intel as a market company, and fix the cycle time by moving the company to 100% SoC (even for it's mainline x86 processors) is what's needed.
That's a hell of a job description and challenge. Any sane person would look askance at the challenge. There doesn't appear to be anyone within Intel that fits the bill (although it's possible that, like Harry Truman, there is someone that can grow into the job). There are some Intel alums that might work: Luis Machuca, Pat Gelsinger, Abhi Talwalkar, Anand Chandrasaker, Mike Fister -- but they also have baggage from their departures.
It will be an interesting search.
Join our online Radio Show on Friday 11th July starting at 2:00pm Eastern, when EETimes editor of all things fun and interesting, Max Maxfield, and embedded systems expert, Jack Ganssle, will debate as to just what is, and is not, and embedded system.