An Iconic American Technology Firm Looks To Reshape Its Destiny, But Can It Deliver?
Alvin Nguyen, Sr. Analyst | Hewlett Packard Alum
JT Thykattil, VP, Research Director | Google Alum
What We Expected
After the announcement of Intel’s new CEO Lip-Bu Tan and the decision to keep both Products and Foundry businesses, Forrester went to Intel Vision 2025 looking for more details about the company’s turnaround plan. Specifically, we wanted to see:
Lip-Bu Tan’s ability to clearly and persuasively communicate a holistic direction for Intel after the abrupt departure of Pat Gelsinger.
How the company plans on addressing the data center market after losing market share to AMD.
What progress has been made with the Foundry business in terms of customers and capacity.
The impact on Intel employees.
Intel’s messages to investors, customers, and partners.
Any new or modified pivots coming out of Intel’s recent Public Sector Summit (IPSS) in March, which emphasized a “return to silicon” with more system-on-chip capabilities and a clear optimism as espoused by David Zinsner (CFO and interim CEO) and Cristoph Schell (CCO). During that recent IPSS event, there was also mention of keeping manufacturing in the US.
The messaging from Intel’s core senior leadership, including leaders in data center, AI, cloud, sales, engineering, and product.
What We Got
What we heard from Lip-Bu Tan’s keynote was an admission of some deep-rooted issues at Intel that he intends to correct. He specifically highlighted:
Loss of talent.
Lack of innovation.
Lack of customer focus.
Lip-Bu Tan (left) and Karin Eibschitz Segal, interim general manager of the data center and AI (DCAI) group at Intel (right), speak at the main-stage presentation during Intel’s products update and go-to-market event at Intel Vision 2025 in Las Vegas (credit: Intel Corporation).
It is clear the new CEO sees these issues as related and that he needs to change the culture at Intel to solve them. Lip-Bu Tan then explained why he is the right person for this job, discussing:
His experience with the semiconductor market as a venture capitalist and as CEO of Cadence.
His time on the Intel board.
His focus on customer experience.
His intention to see this change through.
This ties in with the additional points he made in the keynote, that:
Intel needs “brutal” feedback to help the company become more engaged with its customers.
Intel is behind in AI and needs to develop a competitive system.
Intel will empower engineers to drive innovation, which will help to attract and retain the talent it needs.
Intel will leverage its ISV partners and x86 application ecosystem as an advantage.
This was a measured, understated speech, very different than the showmanship that we see and expect from others, such as NVIDIA’s Jensen Huang or Lip-Bu Tan’s predecessor, Pat Gelsinger. Gone are the on-stage demonstrations from last year and the hype around a bullish new strategy. This was a look at a company laid bare, acknowledging its faults and promising that it will do better.
Fortunately for Intel, it has a strong bench of senior leaders, including David Zinsner (CFO), Christoph Schell (CCO), Karin Eibschitz Segal (GM, DCAI), Michelle Johnston Holthaus (CEO of Intel products), and Kevin O’Buckley (GM, Foundry Services). The sense of optimism we heard at the Public Sector Summit in March continued to resonate in April as well. Lip-Bu Tan has a strong bench, one that arms him well.
Lip-Bu Tan himself during his keynote came across as authentic, but the expectations surrounding his keynote were not going to be satisfied unless he provided answers for everyone, from investors to employees to customers to partners. His coverage of the fundamental corporate issues and promise to address them lacks the details needed to satisfy the different audiences. After two weeks in the CEO role, is this fair? No, but becoming the leader of Intel or really any tech firm that wants to stay relevant and drive investor confidence requires being comfortable with unreasonable expectations. Does Lip-Bu have that certain swagger to be bold and drive innovation for this very iconic American and global semiconductor blue-chip titan?
What Else We Got: A Beautiful And Well-Crafted In-Person Experience
In addition to the explicit content and conversations, we wanted to share what we saw and perhaps the signal to the open market as leading technology firms continue to invest in in-person experiences.
Intel Vision held at the Virgin Hotel in Las Vegas: Intel’s event effectively took over this “off-strip” site with a well-organized event, while allowing for peer networking and social experiences
As a precursor to Vision, the Public Sector Summit in Washington, DC, was held at the DC Wharf. Attendees appreciated a very boutique experience and the attention to detail of the experiential side of this event.
Keynotes: Core ELT @ Intel as well as customer and partner leaders presented with energy and optimism.
Breakout sessions allowed for interactive capabilities, including Jason McGee (GM, public cloud platform, IBM), Anil Nanduri (VP and GM, DCAI sales), and Steven Huels (VP of AI engineering).
The exhibitor experience area provided demos of key technologies.
Executive and leadership one-on-ones and small group sessions were available, including with Rakesh Mehrotra (VP, GM DCAI strategy and product).
Social gatherings enabled customers to speak with each other as well as with Intel and partners, meet informally, and share candid expectations and experiences.
What Tech Leaders Need To Do
The impact of what Intel does cannot be understated: It is a historic and significant technology company with tremendous influence on global enterprises. The new CEO plans to change the culture of Intel to attract and retain more talent, to be more innovative, and to be more customer focused. This is not something that will happen overnight. Tech leaders need to take Lip-Bu Tan on his offer — provide Intel with the brutal truth so it becomes better. Tech leaders also need to watch Intel closely to see if and when it is able to turn around the company and provide competitive solutions across all of its markets.
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