Intel Touts Gains, Improved Competitiveness At Partner Event

A more humble but clearly energized Intel kicked off its annual partner event, under way this week in Las Vegas, with promises of more marketing support and better technical offerings ahead.

The company also touted its recent gains in the market and conveyed to the 420 Intel Premier Provider executives representing 280 different companies assembled here that the foibles that upended it last year are largely behind it now. Those, of course, related to the about-face Intel did with much of its product strategy in mid-2004, which subsequently led to what some Intel insiders now say was the single largest reorganization in the company's history.

Gone in an instant were plans to aggressively pursue 4-GHz microprocessor technology and other things. In their place, Intel launched plans to better align the company with its customers and business partners. That effort culminated in a January reorganization that created five new business units to complement its technology, manufacturing and other business units. They are the Mobility Group, the Digital Enterprise Group, the Digital Home Group, the Digital Health Group, and the Channel Products Group, led by Bill Siu, a 24-year company veteran.

"For the first time in the company's history," Siu noted on Wednesday, "the name of our five business groups do not describe the product that they make or the technology that they drive; they describe the market that they serve. I think this is a major change in the mindset of the company, the psyche of the company."

In an interview with VARBusiness, Siu, vice president and general manager of the Channel Platforms Group, said the change was more than a symbolic evolution inside Intel -- it represents an inflection point for Intel and its partner program, which recently celebrated its 10-year anniversary, and reflects the company's shift to a customer-oriented company from a pure technology-oriented company, he says.

Siu's colleague, Steve Dallman, director of Americas distribution and channel marketing, went ever further in describing the impact of the Intel reorg, at least as far as the channel is concerned. When Intel president and COO Paul Otellini named the Channel Products Group as one of the five platform groups in the company, Dallman said, "It was probably the largest commitment of any president of any company [in the industry] to the channel."

As a further proof point that speaks to the company's commitment to the channel, Dallman noted that when results of the company's own internal partner satisfaction surveys hit a certain goal, every single employee at Intel gets a bonus.

Feel-good sentiments aside, Intel was quick to point out the measurable gains it has made in the past year at the event. Dallman, for one, noted that the past year was the single best in the channel since Intel created its Premier Provider program, and that the past quarter was the single best for Intel for business partner sales.

While the changes at the company may not have disrupted VARs' businesses, they may have disrupted their confidence, Dallman acknowledges. That's why the company has made sure to showcase the many growth opportunities for partners that it believes its products provide. That includes its forthcoming dual-core technology, advances for the digital home-entertainment market and, of course, mobility market.

Tom Kilroy, vice president of the Sales and Marketing Group and co-president of Intel Americas, pointed out just haw fast Intel has been growing of late during his keynote address to attendees. Kilroy said 2004 was not one of Intel's proudest in terms of execution, but noted that in North America, the company broke new records. Sales of desktop CPUs, for example, grew 13 percent last year. Motherboard sales were up 14 percent. Servers products were also up: Server CPUs grew 10 percent, and server motherboards grew 35 percent. Mobile products demonstrated even better growth -- mobile CPUs increased 70 percent, alone.

Kilroy, too, reflected on the company's maturing outlook on the channel and its relationship with business partners. For years, Kilroy said, Intel has equated the channel to its cadre of white-box assemblers and systems builders. Now, he says, the company has a much broader view of partners.

"We are evolving our overall channel focus to include systems integrators, traditional VARs, etc., that are representing solutions that are not white-box solutions," he says.

That said, many of the partners assembled this week are systems builders. And they are here eager to see new innovations and get answers to tough questions. Chief among them: What is the company doing about the disparity between the prices smaller systems builders pay for Intel products and what larger OEMs pay for products? During a keynote session that featured questions from CRN reporter Edward Moltzen, Siu tried to tackle that very issue. He explained that the issue isn't about pricing, but rather creating value.

"Keeping channel healthy is important to us," he said. "We would be mortified if channel were not healthy."

He went on to say that the business models of smaller partners were very different than OEMs. However, it remains a fact that many partners create value for their customers, but still must compete on price.

While that answer left some flat, Intel's technology id not. At the event, the company showcased new Pressler technology, which is part of the Bridge Creek family of products. Intel also highlighted some from its Sonoma, Napa, Lyndon, Averill, Irwindale, Glidewell and other product groups.

Center stage, of course, was the company's new dual-core technology, which it believes will provide partners unrivaled sales opportunities in the months and years ahead.