There's a huge change going on at Intel that no one's talking about


Brian Krzanich, CEO of Intel, talks about the company's RealSense camera technology at his keynote at the International Consumer Electronics show (CES) in Las Vegas, Nevada January 6, 2015.     REUTERS/Rick Wilking

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Krzanich, CEO of Intel, talks about the company's RealSense camera technology at his keynote at the International Consumer Electronics show in Las Vegas

Most of Intel's sales has historically come from the PC business, where its chips are used to power personal computers.

But with a shrinking PC market, Intel has been exploring new ways to grow its business, making headways into other areas like chips for data centers and connected devices.

In order to accelerate this shift, Intel has also been making a huge change in its culture that's starting to show up more prominently these days: executive hires from outside the company.


"Intel historically promoted most its senior management from within but has recently shown an increase of pulling in folks from the outside," Moor Insights & Strategy's principal analyst Patrick Moorhead told Business Insider.

Moorhead said most of the new external hires have happened in areas Intel has struggled with, such as mobility, but also in new markets it's going after, like the Internet of Things, where chips power devices to connect with each other.

"Intel is taking a pragmatic approach in many of its newest areas where they are placing some people with the most experience in specific areas of expertise," Moorhead said.


The most high-profile external hire came in November when Dr. Venkata "Murthy" Renduchintala, the former co-president of Qualcomm's main chip unit, jumped ship to lead Intel's Client and Internet of Things (IoT) Businesses and Systems Architecture Group, a newly created unit that includes its PC, mobile, and IoT businesses.

That group alone represents more than two-thirds of the company's revenues, and some believe it even makes Renduchintala a front-runner to one day take over as Intel's CEO.

"[Renduchintala] is the most powerful Intel executive ever hired from outside the company and immediately becomes a leading candidate to succeed [Intel CEO] Krzanich," Linley Gwennap, principal analyst of the Linley Group wrote in a recent column.


Gwennap noted that Intel has historically been known for its "not invented here" attitude, and its PC-centric mind has often slowed the company's decision to move beyond its ailing PC business. But a series of recent outside hires will be "disruptive" to its internal culture, and "improve workflows whenever possible," he said.

Gwennap pointed out there have been a number of senior executive hires, such as Chief Marketing Officer Steve Fund (from Staples and P&G), President of Intel Capital Wendell Brooks (from Allen & Company), and Senior VP of Security Chris Young (from Cisco), but most of them have been focused on the VP level positions, including: Amir Faintuch (Qualcomm, mobile), Anwar Awad (from Synopsys), Amit Baruch (Samsung), Shawn Covell (Qualcomm), Mark Davis (Via Telecom), Charlie Matar (AMD), Ari Rauch (AMD), and Howard Wright (Qualcomm).

"Intel occasionally hired outsiders into VP positions in the past, but this broader wave of newcomers, with support directly from the top (Krzanich), is empowered to drive change throughout the organization," Gwennap wrote.


It's also worth noting that these moves have coincided with the departure of a number of long time Intel executives, including former president Renee James, former Intel Capital chief Arvind Sodhani, and Dr. Hermann Eul.

But don't expect these changes to make an immediate impact as these things tend to take a long time to grow. As Moorhead noted, "Don't expect [change] right now because these moves are recent. I do expect them to help make faster progress in some of their challenged areas."

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