3 Big Points About New Intel Data Center And AI Group Leader Justin Hotard

CRN breaks down the most important things you need to know about new Intel Data Center and AI Group leader Justin Hotard along with the challenges and opportunities he will face competing against the likes of Nvidia, AMD and beyond.

The new leader of Intel’s Data Center and AI Group is coming to the prized business unit with experience in leading fast sales growth for AI systems and software-as-a-service, helping a server vendor embrace a consumption-based business model and overseeing several acquisitions.

This is Justin Hotard, the Hewlett Packard Enterprise executive who Intel announced on Wednesday as the incoming executive vice president and general manager of its Data Center and AI Group.

Hotard is set to take over the business unit—which encompasses Intel’s Xeon server CPUs, Gaudi accelerator chips and data center GPUs, among other products—from Sandra Rivera, effective Feb. 1. Meanwhile, Rivera has become CEO of Intel’s Programmable Solutions Group, which the company has turned into a standalone business ahead of an anticipated initial public offering in a few years.

The change in leadership is coming at a critical time for Santa Clara, Calif.-based Intel, which is fast approaching the third anniversary of Pat Gelsinger’s tenure as CEO and his aggressive comeback plan to restore the company’s leadership in chip manufacturing by 2025.

In the company’s most recent earnings call in October, Gelsinger said Intel remains on track to deliver five advanced manufacturing nodes in four years, which is key to his goal in surpassing Asian foundry giants TSMC and Samsung in process performance by next year.

“We are hitting or beating all our product road map milestones. We are establishing ourselves as a global at-scale systems foundry for both wafer processing and advanced packaging. We are unlocking new growth opportunities fueled by AI. And we are driving financial discipline and operational efficiencies as we continue to unlock value for our shareholders,” he said in the call.

What follows are three big points about Intel’s appointment of HPE executive Justin Hotard as the new leader of its Data Center and AI Group, including the challenges and opportunities facing his business unit, the experience he gained in growing AI system sales and transforming a server vendor’s business model at HPE and the software-as-a-service sales growth and acquisitions he led at an earlier employer.

Intel’s Data Center And AI Group Faces Multiple Challenges

Hotard is set to take over Intel’s Data Center and AI Group at a crucial time for the business.

As Intel’s second largest source of revenue, the group is not only facing fierce competition from AMD in the x86 server CPU market, it’s also far behind Nvidia in the fast-growing AI computing space in terms of revenue and market share, and it also has to contend with the growing influence of Arm-based chips designed by Ampere Computing and cloud service providers.

Six years after AMD re-entered the x86 server CPU market, the rival has continued to put the pressure on Intel’s historical dominance in the space. For the third quarter of 2023, AMD’s share in the segment was 23.3 percent with Intel making up the remainder, a 4.7-point increase from the previous three-month period and 5.8 points higher than a year ago.

By contrast, AMD’s server CPU market share stood at 1.6 percent in late 2018.

In the face of increasingly competitive chips from AMD, Intel has spent several years working to catch up with Xeon processors that can match or outperform its rival’s EPYC chips.

With the launch of the fifth-generation Xeon CPUs in December, Intel promoted the lineup with greater confidence than previous lineups, saying they can “outperform” AMD’s fourth-generation EPYC processors across various workloads despite falling far short of the rival’s maximum core count.

But when it comes to pushing higher core counts, Intel has been working on reaching new peaks with a new category of Xeon processors that will debut next year. Code-named Sierra Forest, these processors will offer up to 288 cores using Intel’s efficiency core microarchitecture that debuted as the counterpart to performance core microarchitecture with its 12^th-generation Core processors.

With these efficiency-focused server CPUs, Intel is not only going after AMD. The semiconductor giant is also looking to fight back against the high core counts of Arm-based server chips such as the 192-core AmpereOne, which was recently adopted by Google Cloud for new instances.

In addition to competing against pure-play chip designers, Intel has to contend with the growing efforts by cloud service providers to develop their own chips for new instances and services. This began several years ago with Amazon Web Services and its Arm-based Graviton chips. Just last November, Microsoft announced it has been developing Arm-based, cloud-native chips under the name Cobalt.

Then there’s Nvidia, which has been the central player in the AI computing boom in the data center and cloud markets. The chip designer has thrived because it has spent more than a decade building out capabilities that allow its GPUs to run AI workloads significantly faster than CPUs, and the company has also built out a significant software stack to aid with development and operations.

Intel is eager to grow in the AI computing space with its Xeon CPUs, Gaudi accelerator chips and data center GPUs, but it’s operating in a situation where Nvidia has soaked up most of the spending businesses have spent on chips for such purposes in the past couple years.

This is evident when comparing the data center revenues of Intel and Nvidia, the latter of which commands very high prices for its most powerful GPUs that are in high demand.

While Intel made $11.5 billion in sales for data center products in the first three quarters of its 2023 fiscal year, Nvidia generated more than 2.5 times higher revenue for the segment—a whopping $29.1 billion—in roughly the same period, according to a CRN analysis in December.

But Nvidia isn’t the only player in the AI computing space besides Intel. It’s just the biggest one. Intel also has to worry about custom AI chips designed by the likes of AWS, Microsoft Azure and Google Cloud as well as new processors introduced by AMD and a slew of startups.

At HPE, Hotard Led Fast AI Growth And Beyond

Hotard became general manager of HPE’s high-performance compute and mission-critical solutions business in March 2021. He took over from Pete Ungaro, the former CEO of Cray, which became the basis for the business when HPE acquired the HPC vendor for $1.3 billion in 2019. At the time, Hotard also took over the role as the leader of HPE’s research and development arm, HPE Labs.

The role also put Hotard in charge of HPE’s AI compute efforts, which have become increasingly important to the company in the face of fast-growing demand for generative AI solutions.

Under his leadership, HPE’s HPC and AI revenue grew 23 percent year-over-year to $3.9 billion for the company’s 2023 fiscal year, which ended Oct. 31, according to a CRN analysis. In the fourth quarter alone, sales surged 41 percent over the previous three-month period to $1.2 billion.

“There is significant growth, and the pipeline is massive,” HPE CEO Antoinio Neri told CRN in November.

This strong growth came after HPE’s HPC and AI revenue remained virtually unchanged in 2022 from the previous year.

HPE’s AI efforts have increasingly gone beyond pure hardware into software and services, such as the recently launched HPE GreenLake for LLM public cloud service as well as the HPE Machine Learning Development Environment software and HPE Ezmeral software for data preparation.

Those efforts have been fueled in part by acquisitions, such as HPE’s 2021 acquisition of machine learning development platform provider Determined AI, for which Hotard played a role.

“AI-powered technologies will play an increasingly critical role in turning data into readily available, actionable information to fuel this new era,” Hotard said in a statement when the deal was announced.

Prior to Hotard’s most recent role, the executive had been credited with playing a significant role in HPE’s 2016 acquisition of HPC systems provider SGI, aiding the company in its move to a consumption-based business model with its growing GreenLake portfolio, and helping transform the vendor’s compute business by delivering major improvements in growth and profitability for its x86 compute portfolio.

Prior to leading HPE’s HPC business, Hotard was senior vice president of corporate transformation and, before that, corporate vice president and president of HPE’s Japan business.

“Undoubtedly, Justin is the right person for the job—and at an ideal time in the evolution of our HPC, MCS and Labs business,” HPE Antonio Neri wrote when the company announced Hotard’s appointment as the head of the HPC business.

“His customer- and market centric-mindset, technical background, and collaborative leadership will ensure great continuity as we deliver on our Exascale commitments, execute on our strategy and road map and continue to extend our leadership in the market,” Neri continued.

Hotard Led Big Acquisitions And SaaS Growth At NCR

Before Hotard joined HPE in 2015, Hotard worked for seven years at NCR Corp., an Atlanta, Ga.-based provider of technology solutions for banks, restaurants and retail stores.

He started at the company in 2007 as vice president of business development. Over a three-year period in that role, he executed multiple investments and acquisitions between $1 million and $20 million, which included five acquisitions amounting to a total of $72 million in one year to move the company into markets adjacent to its self-serve solutions, according to his LinkedIn profile.

Then in 2010, Hotard became general manager of the company’s NCR Entertainment business, for which he led the turnaround and divestiture of its DVD rental business to Redbox for $125 million. He also helps grow the company’s revenue by more than 50 percent from 2010 and 2011 while streamlining the entertainment business’ operations and restructuring its team.

In 2012, Hotard was appointed NCR’s vice president of corporate development. In that role, he led the company’s $650 million acquisition of Retalix and completed an additional $100 million in acquisitions to double software and software-as-a-service revenue in its financial division, according to his LinkedIn profile. In total, he oversaw more than $3.5 billion in acquisitions in this role, HPE’s website said.

Hotard finished his time at NCR as the president of its small business division, for which he grew software-as-a-service sales by nearly 300 percent over his 2013-2014 tenure. Over his entire tenure at the company, he over

NCR split into two companies last year: NCR Voyix, which offers technology solutions for banks, restaurants and retail stores; and NCR Atleos, which focuses on self-service banking technologies.

Hotard’s Early Career And Education

Earlier in his career, Hotard served as senior manager of business development and then director of product management at Symbol Technologies from 2003 to 2007, when the company was acquired by Motorola. He previously served as a senior sales engineer at Motorola from 1997 to 2000.

Hotard earned a bachelor’s in electrical engineering from the University of Illinois Urbana-Champaign in 1997. He then earned his MBA from the MIT Sloan School of Management in 2002.