Does Intel have the juice to carry them into the future and keep competition at bay? Intel just held their annual Intel Innovation conference to update customers, partners and analysts on their progress and latest technology. At their confab, Intel provided an update on how they have worked hard to address hovering over the company for several years now. In addition, they weaved in how AI is integrating into the work they are doing.
I have watched Intel for many years and have been getting the question: What is the score with Intel as compared to their competition? Have they turned the corner and how does it impact CIOs?
While they continue to be on the bubble, there are upsides and downsides to their current state. Here’s the breakdown.
Let’s start with the upside items. Intel is a well-known and continues to serve as a solid brand that customers and partners resonate with even considering the challenges. Here are a few areas that provide positive aspects for Intel:
Portfolio. This continues to be one of the single biggest opportunities and leverage points for Intel on multiple levels. It is more than just a collection of different products and SKUs. Between their CPU, GPU, FPGA, ASIC and custom silicon, Intel has a wide portfolio of products for an increasingly complicated customer demand. The integration opportunities with supporting chipsets, memory and storage are key. Custom packaging also plays a key role. Comparatively, competitors may only have one or a subset of these solutions which limit how far they can go.
Foundry. Intel has one of the largest silicon manufacturing footprints across the globe. They are not at the scale of TSMC from a foundry perspective but have the capability to go from research to design to foundry which could open the door for more co-innovation opportunities in the silicon manufacturing process.
Visibility. Intel’s broad portfolio provides visibility across the edge-to-cloud spectrum to potentially deliver edge-to-cloud solutions (think Intel SGX edge-to-cloud). In addition, visibility covers both edge-to-cloud as well as the silicon manufacturing process from research to end-user product. As customer requirements get increasingly more complex, so will the need to provide deeper integration across the value chain in these processes. In addition, Intel’s OpenVINO developer tools provide impressive capabilities to capitalize on Intel’s technology.
Intel is not without challenges, many of which are well documented. Here are a few that still challenge Intel.
Strong Competition. Companies like Nvidia, Qualcomm, AMD and ARM to name a few are eating into Intel’s business and not just at the edges. For example, Lenovo now offers a ThinkPad laptop using the Qualcomm Snapdragon CPU. There are also companies like Apple and Amazon that are using ARM and foundry services to supply their needs.
Responsive. Intel is challenged with ‘institutional arthritis’. This is a common side effect for very large, well-established companies and not unique to Intel. Process complexity starts to impact the company’s ability to perform and adapt at speed. As such, Intel has been slow to respond to the increasing velocity of changing market dynamics. As the needs of customers have changed dramatically in the past 3-5 years, Intel has struggled to shift gears fast enough to respond to the changes.
Intel is, however, making progress. Comparatively, companies like Nvidia, Qualcomm, Apple, Amazon have all needed to move faster than Intel can respond and took the opportunity to build their own silicon processes.
Operations. It is well known that a core metric in silicon manufacturing is yield. Intel has needed to produce at speed while maintaining quality. They have struggled to do this over the past few years which has led to questions in Intel’s ability to deliver the needed quantity in a timely fashion. This then forces customers to look elsewhere to keep up with their own demands. Intel has, in the past 1-2 years made progress. However, it will take time to regain customer trust and pull customers back to Intel.
Customer. Intel creates confusion about who their target customer is. Is it the CSP (AWS, Azure, Google Cloud, etc)? The OEM (HPE, Dell)? The enterprise end-user? The developer? In truth, it is all of those but for different reasons. Targeting all of them with a single message is impossible to do. Intel needs to clarify how they approach customers in different parts of the value chain. In a related thread, Intel needs their enterprise ‘Intel Inside’ moment.
Leadership. Does Intel have the right leadership team in place with a) the vision to right the ship, b) the capability to execute on that vision while addressing the current challenges and c) convince customers there is alignment and trust in their ability to execute. The answer is not as clear as it needs to be. Bringing Pat Gelsinger back to Intel was a good move. Gelsinger spent 30 years at Intel, most recently as CTO, before taking on the CEO role at VMware for almost 10 years. He is now back at Intel as CEO. Pat’s history and experience provides him with the ability to roll up his sleeves and get into the details. Even so, there are still questions about where Intel goes from here to address the challenges in front of them.
Today, do enterprises care whether their workloads are run on Intel or another provider? Generally, no. But that should not be the case as there are opportunities to engage the software and services value chain from the enterprise perspective.
The gap between the infrastructure supply chain and CIO interest is growing and becoming more abstract. However, two things could change that for companies like Intel. First, understanding the value chain and how leveraging the edge-to-cloud spectrum can provide unique and differentiated value would be key. Nobody is really addressing this today. Second, geopolitical instability and how it impacts players in the silicon manufacturing space may bring this whole conversation into sharp relief. Today, ‘trust’ in infrastructure is somewhat taken for granted. I suspect it is only a matter of time before that trust is violated and makes infrastructure and services a conversation point in vogue again.
Intel has a lot of potential and is starting to correct the challenges they have faced. However, they still are not out of the woods and need to continue to make significant progress. From a CIO perspective, don’t ignore your software nor infrastructure value and supply chains. These are critical to your success.