A Few months back, Intel pushed CEO Brian Krazanich out the door for a relationship discretion that happened before he became CEO. However, many of my sources tell me that there was a lot of other things that forced him out the door beside this publicized reason. I won’t get into what sources tell me about his leadership breakdown, but suffice it to say that his days were numbered for many purposes and it was only a matter of time before he would be fired.
Now Intel has a significant CEO search in the works, and whomever they pick will have one of the enormous challenges of this era of Intel’s future. There is little growth in PC’s any more, an area that has been their bread and butter for the last 40 years. While they are playing in IOT, ARM processors are much better suited to use in these devices. Through Mobile Eye, Intel has a play in self-driving vehicles, but NVIDIA has such a lead on them that I do not see them as being highly successful in this space. Add to that the fact that Tesla is doing their super-computer processor for their cars and some of the big automakers tell me they have various internal projects in the works to use their specialized chips on some critical aspects of their self-driving programs.
Their entry into the 5G and cellular modem space is interesting but might not be long-lasting. Sources tell me that the Intel cellular modem that will be used in Apple’s new phones has a lot of proprietary Apple IP inside and it is plausible that Apple could eventually do their cellular modems in the future if this is true. While their commitment and investment in 5G were essential to Krazanich, it might not be strategic to a new CEO who will want to put their stamp on Intel’s future.
Indeed, one key thing to watch for in a new CEO will be what their background and focus have been on. Chips are driving the bulk of Intel’s revenues and profits for the data center, and that seems to be where Intel’s future is headed. That is not to say they won’t keep doing chips for PC’s, IOT, etc. However, if the bulk of their growth and revenues come from data center and memory chips, any new CEO will want to bolster that side of the business.
Intel is notorious for investing in new areas and then abandoning them when they no longer seem strategic to their future. If a new CEO comes in whose background and experience has been in data centers and understood this is their future, then current business such as their cellular modem business could be sold off as they have done with other investments that would be not viewed from a new CEO as crucial to Intel ’s future. Same goes for their investments in self-driving cars. While I think that they could and would still want to provide embedded processors for smart vehicles, given the competition, their Mobile Eye investment might not pass the strategic vision of a new CEO that would be data center and memory processor-centric.
This is perhaps the most critical CEO search Intel has ever done. All of the CEO’s from the past were from inside of Intel. Replacing Gordon Moore, Intel’s co-founder was complicated, but Andy Grove stepped in and guided Intel through the PC revolution. I liked Craig Barrett, who followed Andy Grove, but his decision to rely on Intel’s Israel team and their promise to create ultra low powered processors, put them in a bind when they did not deliver as planned by the beginning of the smartphone revolution. This left Intel without a chip for these mobile phones, and they missed this tremendous opportunity.
Paul Otellini, who followed Barrett, was the first non-technical CEO as he came out of their marketing division. He is the one that built up the Intel Inside program and made Intel a household name. He as the most media and analyst savvy and he was a joy to talk to and interact with. As an analyst, these were the best times we ever had with an Intel CEO, and while he made some mistakes, he was loved inside and outside of Intel and during his time, he convinced Apple to use Intel chips in the Mac, a decision that has been good for Intel.
Finding a CEO that can lead Intel into the future is very important. Whomever they bring in needs to be technical and marketing savvy and be willing to drive growth around their new bread and butter, which will be via data center and memory technologies. Yes, they need to continue to innovate on Moore’s law at the CPU level, but the future growth will come from how they participate in this vast industry shift to data centers and the cloud. This new CEO has to drive this and possibly cut out investments and other divisions that are not strategic to their future.
I expect them to announce a new CEO relatively soon as they need a dangerous leader who can help them navigate the future sooner than later. For their sake, I hope they hit this one out of the park!