Intel's New CEO Plots a Course Forward with Atom

by Sean Michael Kerner

Brian Krzanich sees a bright future for Intel's data center server business.

Intel's new CEO Brian Krzanich is gearing up to take the silicon giant into the future. Krzanich took the helm from outgoing CEO Paul Otellini in May of this year.

In his first earnings call as CEO on Wednesday afternoon, Krzanich detailed his strategy for how Intel will move forward. During Intel's second quarter fiscal 2013, revenue came in at $12.8 billion, Intel CPUsup two percent on a year-over-year basis. Net Income was reported at $2 billion for the quarter, which is down by 2 percent over the second quarter of 2012.

Intel provided third quarter guidance for a midpoint revenue range of $13.5 billion.

While the second quarter was not a great one for Intel, the Data Center Group did better than the PC Client Group. PC Client Group revenue was reported at $8.1 billion, which is a 7.5 percent year-over-year decline. Data Center Group revenue, on the other hand, came in at $2.7 billion, which is flat year-over-year.

Krzanich has a plan to improve Intel and it's one he has been working on diligently during his first two months as CEO.

"The last two months have been exciting for me," Krzanich said during his company's earnings call. "I've spent the majority of my time meeting with customers, employees, and my executive team. I have heard a wide variety of views about our industry and Intel, how we’re positioned, where we’re strong and where we can improve."

One of the places where Intel is set to move the bar forward is with Atom and in particular the next-generation architecture codenamed Silvermont.

"The Silvermont architecture will deliver up to 5x reduction in power at the same level performance or up to a 3x improvement in performance over our prior generation of architecture," Krzanich said.

Intel's new CEO stressed that Silvermont is unique in that it spans the IT market from mobile devices to the data center. Silvermont-based products will include the Bay Trail, Merrifield and Avonton chipsets.

Krzanich admitted during the call that Intel was slow to respond to the ultra-mobile PC trend. To that end, he's reorganized Intel to focus more on Atom.

"We will move Atom even faster to our leading-edge silicon technology and focus on the SOC integration of key components like graphics, communications and other devices," Krzanich said. "This does not mean we will lessen the value or leadership of our Core product family, but rather make Atom an equal player in technology leadership for the ultra-mobile space, and both product lines will be driving Intel's future."

Data Center Business Poised for Growth

The data center server business is one that can benefit from both Intel Core and Atom innovations. Krzanich is confident that Intel's data center business will grow throughout the second half of 2013.

"We're seeing strong growth in the cloud, high performance computing, our networking and our storage," Krzanich said. "We think those will continue through the second half of this year."

Sean Michael Kerner is a senior editor at ServerWatch and InternetNews.com. Follow him on Twitter @TechJournalist.

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This article was originally published on Thursday Jul 18th 2013
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