The unique challenge before the Intel board
The challenge before the Intel board is very interesting and the firing of Pat Gelsinger was the easy part to show they were taking action, but the difficulty for the board is now on to figure out how its VBE model has changed and what they will need to do to change it. If they cannot do that it is clear Intel is headed for irrelevance like Kodak and Blockbuster. Intel was the company I grew up admiring from the Intel inside idea to Andy groves book " Only the Paranoid survive" It was a classic book which told Andy groves story of how Intel came around to gain Market leader position in the 1970s. In the 1970s Intel was competing with Japanese chip makers and Andy Grove found it very difficult to compete with the Japanese chip makers. As for every chip they introduced, within a short time the Japanese chipmakers would have competing chips in the market at a lower price points. This led the Intel team to develop the first 8086 chip. This created a product line for Intel that would take them to new heights along with Microsoft.The ecosystem that supported Intel's growth was an ecosystem that wanted Desktops and I was at the other end in India who contributed to this Ecosystem. The demand from our side was simple and it extended to the first Desktop I purchased in 1998. My friend sold assembled Desktops and my first Desktop specification was simple but clear, An Intel chip in the desktop with "free" Microsoft software.I had 52000 Indian rupees to cover the first desktop. Nothing more. I highlight the term FREE Microsoft software. That was the ecosystem push which propelled Intel to new heights, Indians and Chinese in millions like me buying Computer Hardware from Taiwanese companies who sold Motherboards with Intel chips and people who assembled these components together as a desktop and provided free Microsoft software to run your desktop. And after that Intel scaled new heights with Intel inside etc. However here lie the seeds of the challenge Intel is facing today. The Intel team committed to an Architecture called CISC architecture which meant Complex Instruction Set Computer Architecture. And this architecture required a larger power source for the Chips to work. The Alternative was a RISC architecture short for Reduced Instruction Set Computer Architecture. This type of Architecture resulted in chips that could work with a smaller power source. The Intel Ecosystem worked perfectly well till Desktops and Laptops were being purchased where you could plug the computer to a proper power source, but Mobility and mobile devices were becoming popular and they worked on RISC architecture chips like NVidia's chipsets. Intel did not look at the changing ecosystem for computer chips usage. While the Mobile devices markets outgrew, Intel's ecosystem remained stagnant or shrunk against the Mobile devices market. In this we consider Tablets, Mobiles etc. While it would not have seemed obvious to Intel then in 2000, the mobile Computing market was making gains and we now come to a situation where the demand for Intel products is not sustainable. Hence the slump in intel's profitability.
Summarizing, an equivalent description to the problem Intel has in simple terms would be the Pager Market today. Pagers were used in the interim period when the Mobile phones were just being introduced and people were mobile from their desk phones. During this interim period,(1995 to 2000) if someone called a person and they were not at their desk phone, they would have a pager which alerted them to the fact that someone who wanted to speak with them had called and his number was sent to them and they could call that number from any other land line phone they found near them. However once the Mobile phones became accepted the mobile phones addressed the problems of being connected on the move and the pager market vanished overnight. Who would buy a pager today? and even if there were a small set of people who use pagers , will there be enough revenue for pager companies to sustain them selves at 1996 levels of pager demand. Similarly the Intel teams Microchips are pager variety and companies will buy mobile chips like Nvidia's and not chips of Intel. Figuring out how the VBE model of Intel will be in the future wil be the key challenge for Intel board to decipher. Else they will follow Nokia's Mobile companies path to irrelevance.
A video explaining what VBE model are is attached here and it applies to all companies be it a hole in the wall local retailer or a global multinational like Intel. It stands for the Value Model, Business Model and ecosystem model of the company. https://youtu.be/2f5FXiRkAuc?si=qs2VCINy9mMNHHmc And the next video is of how Apple used the VBE model to bankrupt 4 existing market leaders in the Mobile Market (Namely Nokia, Motorola, Blackberry and LG Mobiles) These 4 companies went out of business as Apple had thought through its VBE model and Apple went from an outsider status to being a 1 trillion USD market cap company. https://youtu.be/sXiKeSmpLlQ?si=A5PDRhfwsvb681A1
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Dear Intel board your thinking of how your VBE model will evolve to starts now