Intel CEO Gelsinger and his lieutenants acknowledged that Intel had fallen off in execution in recent years, but has taken aggressive steps, including internal reorganization of the company and building out its supply chain, to make these non-issues going forward.
Tuesday afternoon, Intel CEO Pat Gelsinger and multiple members of his leadership team sat down with media and analysts to discuss the company’s strategy going forward, and emphasized that success will be all about executing on that strategy.
Gelsinger did not shy away from the issue that Intel’s problem since its glory days has been trouble executing on its strategies.
“Even the perma-bears think that we have the right strategy,” Gelsinger said. “However, Intel is all about execution. The issue is whether we can make this a great execution machine again.”
Gelsinger said that Intel’s aggressive building out of its supply chain is one of the measures that it has been taking to improve its capability to execute.
“The biggest issue that we had around our supply chain was that we didn’t have enough capacity – so we are building more capacity,” he stated. “We are also rebuilding how we manage our supply chains, and leaning into our supply chain providers much more aggressively than we have for decades.”
Gelsinger said that the supply chain issues were at the heart of loss of share to competitors over the past several years.
“Due to our capacity limitations, we didn’t lose market share – we gave market share away,” he said. “We also didn’t always have the best products. So we built more supply, and are building better products. I also reorganized the company into six business units, which are tasked with taking every point of share. We will be more aggressive in edge, focus and execution. We are on or ahead of schedule for all of our building products at this point. The next two big ones are Ohio and Germany, and we expect ground breaking events on both in not too distant future.”
Gelsinger also said that the time he spent leading VMware, a software company, has better prepared him for dealing with the modern challenges facing Intel.
“The role of software has become dramatically more important and we don’t believe that will change, but the magic of solutions and software together will create magic for customers – if we can do that at scale,” he stated.
Gelsinger also emphasized that Intel remains committed to the open source ventures within the semiconductor industry, that it once pioneered, and that it intends to be even more aggressive on this front going forward.
“Like with PCIe, we will have our proprietary implementations of some of them but within the context of the open source that we are driving,” he said. “We still make 90% of the WiFi that goes into PCs. Some of our competitors are very closed and proprietary, and that is because we didn’t show up there. We will look at fixing that as we move forward.”
“You will see us embrace open source and open standards as way to innovate and unlock value,” said Sandra Rivera, EVP and GM of Data Center Solutions
“The investment we are making in committing to standards will be incredibly important to contributing to our development of AI,” added Eitan Medina., Chief Operating Officer of Habana Labs, an Intel Company.
“We are going to do more SaaS acquisitions, to pull our silicon’s differentiation through SaaS services,” Gelsinger stated. “Services plus SaaS equals solutions. Christoph is building out more of a solutioning capability.”
Christoph Schell, who joined Intel from HP two months ago as EVP and Chief Commercial Officer in what Gelsinger joked was the most expensive hire he had ever made, explained his plans as what amounts to the company’s head of sales.
“Our strategy is very unique, in that we can come to solutions from different angles,” he said. “Making sure we don’t offer multiple products to a customer from different business units is very important.
“Even though we have six business organizations, we have one face to the customer – the sales organization,” Gelsinger emphasized. “Christoph is the face to the customer and all the business units have to align with that. We have large markets that we are in but we have to stitch them together in meaningful ways for the customer. In our last earnings call, we broke down financials for each of the units for the first time.”