Intel Needs VARs To Drive Next-Gen Product Lines To Market

In its pursuit of "higher ground," Intel provided XChange attendees a peek into its next-generation microprocessor architecture, officially to be announced later this week, that's based on multicore technology for improved performance and increased power. Where that takes Intel and the industry as a whole will depend largely on the channel, said Steve Dallman, director of channel sales and marketing at Intel.

The next generation of chips will include the code-named Merom for the laptop, Woodcrest for Xeon servers and Conroe for the desktop -- all resulting from the $36.5 billion Intel invested in research and development during the past four years. This follows suit with the company's self-prescribed transformation from a microprocessor company into a platform company, Dallman said, in an attempt to more adequately satisfy the full spectrum of customer demands.

"The meat of what we're talking about here is growth -- using the platform to get to the next plane," Dallman said. "We're concerned about establishing a balance."

That balance will be determined by the market, which, according to Gartner, is led by mobility, up 23 percent in the first half of 2005 compared with last year; and servers, up 6.5 percent in the same period. That's compared with desktop sales, which fell 1.5 percent in North America -- not good news, but what was predicted, Dallman said.

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"People always ask me -- is the PC dead? The answer is yes -- in its current form. The basic machine has to change into different usage models. This is wonderful for channels -- which do better when there's segmentation and when there are specific values that they can help the customers to understand."

And while a large chunk of large OEMs disappeared or merged together during the past few years, the channel increased to nearly 40 percent of the global business.

"When we add it all together, [VARs] become massively and unequivocally the largest channel Intel has," Dallman said. "With our latest offerings, we're going to rely on our standard approach of turning first to a reliable core group, and then scale it from there."

Specifically, Intel will turn to VARs to help promote the new product line around five areas: mobility, digital home, digital enterprise, channel platforms and digital health.

"Digital home is compelling -- the whole idea of PCs complemented by services, applications and devices," Dallman said. "The VAR community will have a real opportunity there. A million homes will want to upgrade to this -- they'll pick up the phone and say, 'Who do I call.' We're frozen on how to accommodate that on our own."

In the long term, the most opportunity for VARs and vendors alike may come from health care, due in part to a rapidly aging population. In 2002, some 10 percent of the world's population was over 60 years old, according to the United Nations; in 2050, 21 percent will be. Figuring that technology will be a central means of controlling health-care costs, Intel plans to drive standards in that area forward. Already, the company established a workforce of business-development managers to go into the field and figure out where industry can best contribute.

"We'll need a VAR community to support this," Dallman said. "The idea is that it's personal; it's intimate; it's one-on-one. It's things large companies can't do without an educated, technologically savvy sales force. As we keep saying, 'It's time to stop playing checkers and start playing chess.' Look for growth and innovation, ways to get complexity to customers, and ways to get business to move forward."