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3/3/2006
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Q&A: Intel's Paul Otellini

The chip giant's CEO talks about the Pro, an enterprise system to be launched this year that focuses on manageability and security, and technology to watch at this week's developer conference in San Francisco.

It's been more than one year since Intel famously reorganized its business around several key platforms. Working to ensure there is a channel component in each of these divisions, Paul Otellini, Intel's president and CEO, talked to CRN Hardware Editor Kristen Kenedy about channel opportunities in the company's upcoming managed desktop initiative, called Intel Professional (code-named Averill), and mobile. He also opens up about supply problems in the fourth quarter and technology to watch at this week's developer conference in San Francisco. The following are excerpts from that conversation.

CRN: How are you integrating the channel into your new platform model?

Otellini: Every platform we are working on without exception has a channel aspect to it that we believe offers the channel an equal opportunity to grow their business along with the OEM customers.

So, as an overarching statement, we are designing products with a holistic view of our customer base as part of it. For example, the Viiv product that was just launched at CES in January had over 50 channel customers at day of launch, 19 of whom showed their products at the Intel booth in Las Vegas, along with the Sony, Dells and Hewlett-Packards of the world. This product gives integrators … the ability to not just sell more stuff on the consumer side but also have ongoing service revenue stream.

 
  INSIDE THIS REPORT  
Intel Plans Managed Services, Mobile Initiatives For Channel
  Intel To Announce Channel Incentives, Discounts At ISS  
 


As we move this to year to launch [the Pro] platform for the enterprise I would expect the channel to be an equal full participant in that ramp. The products will benefit their customers as well as large enterprise customers. It focuses on manageability, security, lowering cost of ownership—this is something that is music to any buyers' ears.

CRN:: In what way would you look to enable that for the channel in particular? The manageability aspect really catches my ear because that is something many VARs and system builders are talking about these days.

Otellini: I'm not going to prelaunch this thing, so I need to be careful here. But like our other products, it is a combination of software, hardware and ecosystem partners.

The hardware and software ingredients, of course, will come from Intel, as they have in the past for the channel, as will info on how to sell, and so forth. There will also be arrangements with a number of ecosystem partners that have plug-ins to it to provide some of the things like down-the-wire manageability. It will be much like we did with Viiv, where there were a whole bunch of ecosystem partners and content made available to all players up front.

CRN: How would VARs plug in to those hooks?

Otellini: We've made our product robust in terms of being able to handle a variety of modular solutions for manageability and security.

CRN: Can you give me an example of one of those solutions?

Otellini: Not without launching it.

CRN: Mobile sounds like it is also another platform you think is important for the channel.

Otellini: Starting with Centrino, but even before Centrino, we were working to enable to the so-called whitebook marketplace through the ODMs [Original Design Manufacturers], and I suspect that for the Napa launch for Centrino core duo last January—I don't remember the exact numbers—there were as many channel SKUs as there were OEMs SKUs at launch. There were over 200 SKUs in total at launch. You will see us continue to work with the industry to improve the selection and quality and availability of solutions from the ODMs, but also increasingly the interoperability of components.

One of the big issues for the channel is service. If the customer moves outside of their immediate customer base area and the notebook breaks, how do they get service? So we want to be able to use Intel—the Intel ecosystem—from both an infrastructure and local support capability for people to be able to offer, say, cooperative service arrangements. Part of that would have to include interoperability of [spare parts].

CRN: That would mean system builders would partner with each other to do service. So if someone was regional, they might partner with another solution provider in a different region?

Otellini: Yes. How do you connect an Intel partner in Thailand with an Intel partner in Indonesia? If a Thai customer travels in Indonesia, how do you get your PC fixed while you are on the road?

CRN: Is that also true for the United States—if you are on the West Coast and need to get your PC fixed on the East Coast?

Otellini: Hopefully.

CRN: Are you saying you will try to launch it internationally first?

Otellini: No. I'm just saying it is very natural for us to have these kinds of capabilities, to enable these kinds of capabilities using our network. I mean, our network isn't just what Intel does, it is what we enable around it. So this allows channel customers to take advantage of the fact that they are all off of a common base.

CRN: I think one of the things system builders have been saying about the whitebook issue is they would like to see Intel do some kind of branded whitebook initially.

Otellini: That's an oxymoron, isn't it? A branded whitebook is not a whitebook. It would be an Intel Book.

CRN: Well, something along the lines of what you are doing with your server platform.

Otellini: With the servers we enable chassis, motherboards and power supplies. We don't build them all. We don't assemble them all. And we don't do that for desktops either, by the way. I think the notebook model will likely evolve more like the desktop model than the server model because you want the volume characteristics. In servers everything is unique, right? Everything is more expensive, more robust. In PC space you want interoperability, you want cost, you want scale, economics, and you want ease of integration.

CRN:Is there anything Intel can do to maybe alleviate some of the perception from customer that whitebooks are not as good a products as branded notebooks?

Otellini: Work to make them better. I don't think the perception is one of quality. The issue today is it competitively costed, is there service outside of my immediate adjacent area, those kinds of things, which address how people use notebooks.

CRN:What I hear from system builders—and I recognize that this may not be what you think is Intel's job—but what I hear from them is that they want Intel to guarantee that there is a certain supply of whitebook chassis.

Otellini: I appreciate that, but [we] are not going to be able to tell people how to run their business. What we can do is make the market, right. The way we can do that is we can drive standards, which is what we just talked about, the interoperability and interchangeability of parts. We can ensure that we are working closely with the ODMs to have the most recent technology from Intel available as close to launch as possible, very often at launch.

That is how we built what is today the desktop business. The key change in the desktop strategy back to the Pentium days was the best technology with zero lag in the channel. Once we did that, once we were able to enable that, it really made the channel much more competitive. And that hasn't changed. I think the same business model applies here in the notebook area.

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