IDF - Spring 2005 (page 3: Intel 3.0)

Intel 3.0

Not so long ago, Intel’s product development was split into two main divisions. The Architecture group dealt with standard processors and chipsets, and then there was the Communication Group for flash memory, processors for handheld peripherals, (PDA, GSM…) and network products. Today Intel’s product divisions have been split into five parts: the Mobility Group (laptop platform and handheld), Digital Enterprise Group (professional platforms), Digital Home Group (general public platform), Digital Health Group (for health, medical research etc.) and the Channel Products Group (deals with product localization and Intel’s product adaptation to specific markets).

Craig Barrett

Some analysts qualify this reorganization as a Intel 3.0 version. Intel was initially a memory manufacturer, then delved into processors and now is a platform manufacturer. Each division is relatively independent in terms of technology and marketing, which could lead to contradictions. Intel’s marketing strategy could also become more aggressive and specific to cover the market and technological aspects, which were put on the backburners. These changes could be very beneficial for the final user with products closer to their requirements and may better fit the evolution of needs. 2005 and 2006 will be the years to evaluate the efficiency of this new organization.

Besides this reorganization, Intel’s CEO will also be replaced. Craig Barrett has decided to give the chair to Paul Otellini, who will in May become Intel’s 5th CEO after Robert Noyce, Gordon Moore, Andy Grove and Craig Barrett. Unlike the previous CEOs which all had brilliant engineering pasts, Paul Otellini, the current president and COO, comes from sales and marketing. Major changes in perspective? Not at all, according to the new CEO, who insists on the fact that next to the changes there will remain 20 years of Intel history. This change in CEO leads, of course, to other modifications. Above, Craig Barrett will replace Andy Grove for the Chairman position

. Nothing else has been said for positions below. Who is going to take the President and COO position? The charismatic Pat Gelsinger? The reorganization has eliminated the Chief Technology Officer position formally held by him, and he is now General Manager of the Digital Enterprise Group. With this position his field of action has been reduced.

You may have understood the broader context. Intel is currently changing at a crucial technological turn, which is the abandonment of processor speed for the possibilities of platforms. This 180° turn is difficult to make, but Intel has intended to succeed starting from today.