Intel CEO Brian Krzanich finally announced on Tuesday the obvious message which has been circulating in earnings calls, speeches, and analyst presentations. Krzanich noted that Intel is not a PC company anymore and is transforming “from a PC company to a company that powers the cloud and billions of smart, connected computing devices.”
“New” Intel based on five pillars
Krzanich noted that the PC is just one of many other connected devices, and the “new” Intel will be built upon five pillars: the cloud, which includes data centers, servers and virtualization; connected “things,” such as autonomous vehicles, sensors or PCs; the memory business, which includes everything from 3D XPoint memory to advances in data center infrastructure and server; connectivity, or more specifically, 5G networking; and the underlying fab technology and manufacturing.
Last week when the chip making giant started signaling its new focus publicly, Krzanich said about 40%of its revenue and 60% of its margin come from outside the PC.
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“It’s time to make this transition and to push the company over all the way to that strategy and that strategic direction,” Krzanich said last week. “That’s why we wanted to do it now.”
On Tuesday, Krzanich added, “We will also lead by becoming a company with a broader focus, and with sharper execution,” and in doing so, the company will achieve its mission of leading in a smart, connected world by creating a lasting value for its partner, shareholders, and customers.
Similar to Microsoft
In August 2015 at Intel’s Developer Forum conference, Krzanich focused on the Internet of Things and barely mentioned the Skylake PC processor. Before announcing the first quarter earnings, the CEO divulged that all its IoT and PC projects were being evaluated for possible cancellation.
For Intel, the microprocessor has been its single foundation, and it powered most of the world’s PCs, and then servers and notebooks. Intel’s evolution appears similar to Microsoft’s, and the chip maker also sees the cloud as the driver of its business.
The chip maker can charge thousands of dollars for a Xeon processor that powers a server, but for a standard Core chip, only a fraction of that can be charged. Intel will attack the data center from two key fronts: Virtualization and analytics, wrote Krzanich. Also the CEO vowed to drive “more and more of the footprint of the data center to Intel architecture.”
Krzanich has surely taken one of the most important steps in Intel’s history, but he still has to decide about a few rough edges, like what the role of the McAfee security business will be in the new Intel.