Could be business as usual with Intel's new CEO
- 02 May, 2013 20:17
With Intel's new CEO ready to step up next month to lead the world's largest chip maker, industry analysts don't expect to see any big change in strategy.
Intel today announced that Brian Krzanich, the company's chief operating officer and senior vice president, will take over when current CEO Paul Otellini retires on May 16 during the company's annual stockholders' meeting.
Otellini has been with Intel for the past four decades and was CEO for eight of those years -- a time when Intel maintained its reign as the top computer chip maker. However, the company also has stumbled, struggling to get a footing in the burgeoning mobile market , facing strong ARM competition and enduring a sluggish PC market .
When Otellini announced last November that he would step down, industry watchers wondered if this would be a good time for Intel to rededicate itself to mobile and depend less on the sagging PC market.
Today, they're not sure that any significant change is coming.
"I think that Krzanich is a solid, but not spectacular, pick for Intel at this time," said Dan Olds, an analyst with The Gabriel Consulting Group. "While some were hoping that Intel would make a dramatic move and hire someone either outside the company or a dark-horse insider who might really shake things up, I'm not surprised to see them select a longtime insider who has manufacturing experience."
Most analysts agreed that they don't expect to see any startling changes from Intel's current focus.
"We won't see any big sea change in Intel's strategy in the short and medium term," said Olds. "They're going to continue to follow the same product road maps and stick to their stated plans. Despite the PC market woes and other challenges that Intel is facing in virtually every facet of their business, this is a very successful company that has a lot of advantages over competitors."
Picking a candidate from inside the company is a strong sign that Intel's board has faith in where the company is going and and how it's getting there. By picking Intel's 52-year-old chief operating officer with a background in manufacturing, the board seems content with the status quo.
"Krzanich has an obviously deep understanding of Intel's business and culture," said Charles King, an analyst with Pund-IT. "That's important given that many believed Intel would choose someone from outside the company, which would have implied that Intel needed a serious shaking up. In contrast, choosing Krzanich suggests that the company's board believes minor course corrections are what's required."
Choosing Krzanich also means that Intel's board is focused on continuing to drive their fabs hard and executing on new architectures. Intel has been focused on coming out with a new 14-nanometer Trigate technology, keeping the company ahead of other chip makers who are lagging behind Intel in the nanometer race.
Having someone like Krzanich, who has experience in manufacturing, at the helm should help the company stay on that schedule.
"Krzanich is a 'blue-blooded' Intel insider with the experience to steer a giant super-tanker like Intel," said Patrick Moorhead, an analyst with Moor Insights & Strategy. "He has manufacturing and technology experience, which are the two largest Intel investments. I expect Krzanich to attack issues like Intel has over the last 20 years -- fight with the fab."
He also noted that if Krzanich can push Intel to execute on its new mobile and 14nm architectures, the company could become a force in mobility and a challenge to ARM.
Jack Gold, president of J. Gold Associates, said overall he sees Krzanich's promotion as a good move for Intel.
"I see the promotion from within and the background he has as positive," said Gold. "It's a realization by the board that Intel does have some challenges and it must realign some of its businesses and focus. Longer term, Krzanich... could make them more competitive in a rapidly changing market."
Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at @sgaudin, on Google+ or subscribe to Sharon's RSS feed. Her email address is firstname.lastname@example.org.
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