Intel Investors - An Interview with Intel's Sean Maloney
Some interesting tidbits - such as:
"We're going to be coming out with a lot of new products in the channel in the next six months. It's all going to be called e-business building blocks. . . . You'll also have continuous growth over the next six months of the Pentium III Xeon processor. We'll put loads more effort into PIII Xeon and it will get much, much faster. . . . There are three parts of the server infrastructure: front-end, midrange, and back office, which are typically multiprocessing eight-way systems. We're pushing that way very fast and we're going to have a lot of building blocks, very high performance solutions for ISPs and resellers to go into the back office of the dot.com space. "
"The Itanium has a number of features in it designed for secure e-business. A lot of that back-back office needs to be very secure."
"The outlook in the next three to five years is brighter than I can ever remember in the last 15. "
Paul
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An Interview With Sean Maloney -- Intel
(URL: crn.com
By Marcia Savage
Computer Reseller News
1:25 PM EST Fri., Jan. 07, 2000
Sean Maloney, Intel Corp. senior vice president and director of sales and marketing, talked with CRN Section Editor Marcia Savage last week about the rapidly evolving channel in the Internet age and Intel's channel plans.
CRN: What changes does Intel see in the channel and how does it plan to deal with those changes?
Sean Maloney: I think we have a justification for being more optimistic than at any time since the creation of the reseller channel back in the early 80s. We navigated through the millennium bug and we have a very clear investment cycle coming up for E-business. For our customers that are largely businesses that sell to business, there are immediately tangible benefits from aggressively investing in E-business. I think we ought to be looking at a three-to-five year heavy investment cycle where the reseller community is pivotal. The reseller community is not going to go away, it will only get stronger. That's the good news. The not so good news is that I don't see that the margins are going to return to low value add products . . . I think the channel has to start making friends with people it hasn't necessarily before. Last year, ISPs and resellers were on a collision path and I still very passionately believe that's what's happening, but you also have other players, you have what we call e-business solution providers, also the ISVs. All of those communities are necessary for the complete solution to arrive for these hundreds of thousands of businesses that are going to be spending a lot of money in the next five years on solutions. The classic reseller is going to have to partner with these people far more and that guiding thought is what's going to drive Intel's channel strategy in the next year and a half. We have established multiple programs: ISP, classic reseller programs, a formal ISV program, and now an e-business solutions provider program. We're going to start increasingly matching and brokering between all those four constituents. We will be looking to build across the whole channel a family approach for e-providers.
CRN: How are you going to do that?
Maloney: First of all, some very simple things. We're going to start co-holding our channel training events. We just started doing that and it's been wildly popular. So the ISPs meet with the resellers and meet with the e-business solution providers. And there's a forum where people can talk about business deals and get to know each other and build more complete solutions. Then during the rest of the year -- I won't go into details now -- we'll be rolling out a more formal structure.
CRN: Does this mean you'll be phasing out some of your older reseller programs?
Maloney: Not in the medium term. It means we'll be putting together common themes between all the programs far more than we have in the past. None of these communities are going away. What's happening is they're colliding with each other and they have far more common markets, more common problems, than they had in the past. ISPs aren't going away, resellers aren't going away. Maybe in three years you can redefine the topology of the channel but you can't do it now.
CRN: What do you think resellers have to do beyond forging these new alliances? Do they have to develop new capabilities?
Maloney: The traditional account base is going to want to implement E-business. That's going to mean they want, at the simplest level, to take and receive orders . . . some degree of personalization for their customers, a reasonable degree of mining capability, and good marketing. Roughly speaking, hundreds of thousands of companies across America are all going to want to do fairly similar types of things but they're not going to piece it together themselves. Your average business person can just about get their heads around a PC solution, never mind the ins and outs of e-business. So the reseller is clearly going to have to provide solutions, there's no debate about that.
CRN: How is Intel going to work to promote the Intel brand with the way the channel is changing?
Maloney: I think we have a fairly unique position in that we do have an extremely broad reseller program already. We have a very broad ISP program. We have good formal relationships with the ISVs. And we've also got an EBSP program. And behind it we have a lot of dollars going through the channel through products. So we have a very strong presence anyway. I think we can pull these various parts of the channel together and help provide solutions. That's the first part. The second part is we're clearly going to roll out a lot more products in the channel in the next year. You saw us with the IPivot product last year. We're going to be coming out with a lot of new products in the channel in the next six months. It's all going to be called e-business building blocks. . . . You'll also have continuous growth over the next six months of the Pentium III Xeon processor. We'll put loads more effort into PIII Xeon and it will get much, much faster. . . . There are three parts of the server infrastructure: front-end, midrange, and back office, which are typically multiprocessing eight-way systems. We're pushing that way very fast and we're going to have a lot of building blocks, very high performance solutions for ISPs and resellers to go into the back office of the dot.com space.
CRN: Regarding your Web hosting initiative, some VARs see it as pushing them out of the picture.
Maloney: It's not. This is going to be complementary to the reseller channel, not competitive with it. We're not putting in place a big sales force. Intel doesn't have a large consultancy, sales organization, along the lines of an IBM [Corp.] or Sun [Microsystems Inc.]. That isn't how Intel works. We'll be selling through partners. We are very heavily focused on the reseller community and that's not going to change.
CRN: What else can you say about what's ahead?
Maloney: We're also very interested in the cellular phone area. For many companies, cell phones with WAP [wireless application protocol] are going to be a big part of their e-business story and I think the reseller community needs to start thinking about how that fits in. . . . And in the networking area, you'll see us being much more appliance focused. . . . Itanium [processor] is in the second half of '00 . . . it will play an increasingly central role in that back-office area. Resellers should have plans for Itanium in place probably by the third quarter of this year. The Itanium has a number of features in it designed for secure e-business. A lot of that back-back office needs to be very secure. We will be doing training throughout our reseller channel to give resellers the information they need.
CRN: Some people question how Intel can handle all these different areas, such as wireless.
Maloney: The world has changed, and to be successful in the Internet era, you have be able to be successful in a number of different areas, not just one. As far as the reseller community is concerned, we'll be providing a broader range of solutions than we have in the past. And we have investments and the resources to be able to do it, and where we don't have the resources we will acquire through acquisitions. In the last nine months, we brought in substantial numbers of people with wide-area networking experience. We are in '00 with a much richer base of knowledge on WAN. . . . That doesn't mean that we're talking our eye off the PC, the PC is still extremely healthy, doing very well. In summary, we have every right to feel extremely optimistic. The outlook in the next three to five years is brighter than I can ever remember in the last 15. The business of the reseller has moved from supplying networking components and installing them to installing e-business solutions. As a supplier, Intel is going to respond to that by significantly increasing the breadth of what we supply and realigning our channel so the whole channel can provide solutions through partnerships.
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