Intel's focus on X86 backfired on Paul Otellini

BANGALORE: After a decades-old tenure wtth Intel, Paul Otellini recently announced his retirement as Intel CEO. As always, it prompted media and industry analysts to speculate who would be the new CEO.

Whether the new CEO will be from Intel or an outsider, industry analysts can justify it. While some say an insider is a good option for Intel, others feel an outsider can bring in relevant changes to Intel.

In an interaction with Abhigna NG from CIOL, Ganesh Ramamoorthy, Research Director, Gartner India, shares his views on Paul Otellini's exit and how Intel can tap into the growing smartphone market

CIOL: How do you see the tenure of Paul Otellini as Intel CEO?

Ganesh Ramamoorthy: During Paul Otellini's term, Intel had a very strong focus on X86 platform. If you look back, Intel made investments on ARM technologies (XScale), which was sold to Marvell, and the chipmaker shifted its entire focus to the X86 platform. I think this move backfired on Intel because with sole focus on X86 platform, Intel was not able to make much headway into smartphone space.

Later, realizing the potential in smartphone market, Intel did its best to tap the growing smartphone and tablet market, when they were doing pretty well in PC industry. I think that's where the actual competition started when ARM tried to encroach into PC and server market.

The biggest thing for Intel in the past was that the company had to compete with Advanced Micro Device (AMD) and today it has a bunch of companies which are with ARM technologies.

CIOL: Do you think Intel's lack of growth in smartphone market led Paul to step down?

GR: I can't really speculate the reasons for his step down. But if you look at the consequences, the effects are all there to see. As said earlier, Intel was really not doing well in smartphone space and the same applies to tablets. The recent Ultrabook also faced the same due to high pricing and PC market decline and growing competition in server market. Considering all this, it looks like Otellini had tough time at Intel.

CIOL: How do you see the progress of Intel and competition among its competitors.

GR: When the overall PC market was declining, Intel didn't make any progress in Ultrabook or Tablets space. And, if you see now, the competition has grown, where Intel is facing competition in server space with AMD backing ARM technology.

The competition got bigger when companies like Microsoft started backing ARM technology and today I feel Intel is concerned that has not adopted the ARM technology.

CIOL: Who do you think is the best to succeed as Intel CEO? Insider or Outsider?

GR: With Paul going away, the supporters of X86 platform may support an outsider with revived interest. If Intel re-invests in ARM technology as a key technology for its next generation chip, I think this will help Intel in future.

CIOL: Why not an Insider?

GR: Yes, someone from inside definitely has a bigger advantage. They understand the company culture, they know the company hierarchy and other natural advantage will benefit him/her.

But the negative side is that breaking away from the X86 culture will be difficult for a person from inside. Given today's requirement for Intel to ward off the threat from ARM technology and compete with ARM technology in various different market segments, especially in mobile phone space and to defend its position in server market, I think Intel has to come up with some big strategy.

And what I feel is that kind of culture and thinking could come in more easily from an outsider.