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Intel plays it safe with new CEO

Promotes COO Brian Krzanich to replace Paul Otellini, ignoring calls to import new blood to meet the mobile challenge


Published: 3 May, 2013

READ MORE: People/Management | Intel | Semiconductor

After all the speculation about Intel's next CEO, the chip giant played it safe after all, sticking to its unbroken tradition of hiring its chief from inside. Current COO Brian Krzanich is a cautious choice at a time when Intel needs radical thinking to accomplish its faltering transition to a post-PC world.

The choice of Krzanich is disappointing, regardless of the man's undoubted strengths, because it does not send the signals the market needs - that Intel acknowledges that times are changing far more quickly than its own products and structures, and it needs some new thinking. The length of time it took to choose its new CEO suggests there was disagreement along the way, and perhaps some external candidates were approached but failed to come through.

Krzanich's strengths lie in manufacturing and operational excellence and his elevation suggests that Intel may be aiming to extend its fledgling foundry activities into a major business. Its cutting edge chipmaking processes have always been - and remain - its killer weapons, and there is logic in harnessing them for a new revenue stream. However, there is a big difference between developing processes tuned to the firm's own chips, and achieving the flexibility to make many different flavors for customers. Again, a CEO with experience of the foundry business might have been a braver choice.

And Intel cannot bet its future on foundry services. To maintain its current massive size and market position, and fend off challengers like Samsung and the growing breed of fabless giants like Qualcomm, it has to develop a credible mobile and embedded proposition, one capable of changing the rules, not just tapping at the door like current platforms. A CEO with specific mobile expertise and track record would have been a strong signal that Intel understands the scale of the challenge.

Krzanich will take over the reins from Paul Otellini on May 16 and outline his strategy plan after that. He is joined at the top table by Renee James, promoted to the role of president. This is a positive choice, since she was well regarded in her former role running Intel's software and services business. This will be increasingly important to differentiating the products and driving growth, and James has already increased software revenues by a factor of 10. She also has understanding of operators, being a board director at Vodafone.

Krzanich is as traditional an Intel star as could be - a former factory manager, with chip process in the blood. He will be only the sixth CEO in the firm's history and has worked at Intel for three decades. He joined Intel in 1982 as an engineer, so has seen almost the whole trajectory of the PC industry from within the firm which drove that platform, working his way up steadily.

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