Intel Corporation’s drive to refocus its business activity.
“The biggest opportunity in the internet of things is that it encompasses just about everything in our lives today”
IT giant, Intel Corporation, announced earlier this year that it was undergoing a massive shift in strategy. While jobs fall by the wayside, Intel has its eye firmly on what analysts are calling ‘new frontiers in technology’ and there were signs that the other tech behemoths are set to follow suit.
In May this year, Intel CEO Brian Krzanich outlined his strategy for the chip giant in the years ahead, as it struggles to move away from its dependence on the waning PC market.
The thrust of the new strategy was: ‘transforming Intel from a PC company to a company that powers the cloud and billions of smart, connected computing devices’ and this, says Krzanich, encompasses five core beliefs:
- The cloud is the most important trend shaping the future of the smart, connected world – and thus Intel’s future.
- The many “things” that make up the PC Client business and the internet of things are made much more valuable by their connection to the cloud.
- Memory and programmable solutions such as FPGAs will deliver entirely new classes of products for the data centre and the internet of things.
- 5G will become the key technology for access to the cloud as we move toward an always-connected world.
- Moore’s Law will continue to progress and Intel will continue to lead in delivering its true economic impact.
For Intel, these core beliefs form a clear virtuous cycle – the cloud and data centre, the internet of things, memory and FPGAs are all bound together by connectivity and enhanced by the economics of Moore’s Law.
Delving further into Intel’s strategy, the company believes that virtualisation and software are increasingly defining infrastructure in the cloud and data centre, with analytics key to unlocking the full potential here. Intel plans to accelerate the power and value of analytics by continuing to innovate in high-performance computing (HPC), big data and machine learning capabilities.
Key to this is the “internet of things,” every device, sensor and console that has potential to connect to the cloud. This means that everything that a “thing” does can be captured as a piece of data, measured in real-time, and becomes accessible from anywhere.
Krzanich believes that: “the biggest opportunity in the internet of things is that it encompasses just about everything in our lives today – it’s ubiquitous. For most areas of industry and retail – from our shoes and clothes to our homes and cars – the internet of things is transforming everything and every experience. At Intel, we will focus on autonomous vehicles, industrial and retail as our primary growth drivers of the internet of things.”
Memory and programmable solutions are also fundamental to Intel’s new strategy. Rack Scale Architecture, 3D XPoint™ memory, FPGAs and silicon photonics are just a few examples of technologies that Intel has spent several years developing and which are now on the cusp of production.
Threading Intel’s virtuous cycle together is connectivity,“the fact that providing computing power to a device and connecting it to the cloud makes it more valuable”, says Krzanich. “A great example is an autonomous vehicle. It must have connectivity to the cloud, and the cloud must have machine learning capabilities to constantly be guided by the most up-to-date algorithms and data sets that allow the vehicle to operate safely. In this way, connectivity is fundamental to every one of the cloud-to-thing segments we will drive. As the world moves to 5G, Intel will lead because of our technological strength to deliver end-to-end 5G systems, from modems to base stations to all the various forms of connectivity that exist today and will exist tomorrow.”
Gordon Moore was an Intel co-founder so Moore’s Law is ingrained in the company’s psyche. The 50-year-old law holds that we can shrink transistor dimensions by roughly 50% at a fixed cost, thus driving twice the transistors for the same cost (or the same number of transistors for half the cost). Despite forebodings about the sustainability of Moore’s Law, Krzanich believes that there’s plenty of life left in it yet: ‘Intel’s leadership in Moore’s Law has driven the products delivering massive computing power growth and increasingly better economics and pricing,’ he says. ‘In my 34 years in the semiconductor industry, I have witnessed the advertised death of Moore’s Law no less than four times. As we progress from 14 nanometer technology to 10 nanometer and plan for 7 nanometer and 5 nanometer and even beyond, our plans are proof that Moore’s Law is alive and well. Intel’s industry leadership of Moore’s Law remains intact, and you will see continued investment in capacity and R&D to ensure so.’
New frontiers in tech come at a cost
In a time when technology is valued not just for the devices it produces, but for the experiences it makes possible, Intel is banking on the fact that a broader focus, and sharper execution will enable the company to take a lead in a smart, connected world. However this ambition also comes with a price. In this case, its to be paid by the 12,000 Intel employees who learned last month that they will no longer have a job by the end of the year. Many of these soon to be ex-employees will be the PC experts that, until recently, worked on the company’s core business.
There are signs too that Intel’s restructuring, and the shedding of what it obviously believes to be dead wood, is likely to be happening across the larger reaches of the tech industry. According to “frontier technology” experts, we are likely to see a lot more restructuring for major technological corporations in the coming months, with analysts explaining that companies that are currently startups may turn into the giants of the future, so today’s giants need to stay one step ahead.
Several major corporations have already taken the initiative to push frontier technology, such as Google with its Google Cardboard and Apple’s eventual (maybe?) 3D printer. Layoffs are the inevitable result and, in many cases, are already happening, as more and more companies find themselves having to look in new directions.
With Apple’s iPhone production on the decline comes more evidence that companies’ defining products won’t be what sustains them into the future and that Intel and Krzanich’s new focus on experiences rather than the devices that make these possible is the way to go.
Such an approach may also lead to innovation and technological breakthroughs in areas hitherto not part of a company’s core business.
For one Intel employee, for instance, there is a personal story behind his interest in using cloud computing and artificial intelligence to provide pharmaceutical companies with the tools to develop drugs faster and with greater chance of success.
Eric Dishman, founder of Intel’s first health research and innovation laboratory in 1999 was diagnosed with a rare form of kidney cancer at the age of 19 and endured 23 years of trial-and-error treatment before the sequencing of his genome helped to identify the faulty gene causing the cancer and identified the drugs that were likely to be the most effective.
Now cancer-free, Dishman’s desire is to give other cancer patients access to the same treatment he had. In order to speed up the process, he helped found the Collaborative Cancer Cloud (CCC), launched last year by Intel and Oregon Health and Science University (OHSU). The CCC enables hospitals and research institutions to share patient genomic, imaging, and clinical data securely for potentially lifesaving discoveries.
The plan is to extend the cloud platform to other institutions and countries as well. It could also be used for researching other “faulty gene” illnesses, such as muscular dystrophy. It also aims to show exactly what drugs should be used with which patients.
There are many more philanthropic aspects to the cloud: the discovery of new drugs, for instance. So-called “in silico” research involves using computers to model and test potential molecules and compounds before they ever make into a real world lab. Specialists are excited by the “enormous potential” to improve healthcare services. However, Intel may have a tougher time convincing its investors that its pioneering new strategy is the right one, its share fell 2.67% at the end of the announcement week, making it one of that weeks’ worst performers. For the tech giants, sustaining their leadership is a drama waiting to play out over the coming months.