Partners Cheer Intel’s Funding Boost, Say They’re Mixed On Its AI Efforts

While Intel channel partners commend the chipmaker for boosting partner funding and focusing on AI ISVs after it faced a mandate to make cuts, they question how long it will take for Intel to challenge Nvidia’s AI chip dominance in data centers and wonder about its future.

Intel channel partners said the chipmaker is making the right move by boosting funding for partner programs while reducing direct coverage for some partners after it faced a mandate to make deep cuts within its sales organization.

However, partners who spoke to CRN offered mixed opinions on Intel’s AI strategy, giving a thumbs up to its narrowed focus on AI ISVs while questioning how long it will take for the semiconductor giant to challenge Nvidia’s AI chip dominance in data centers.

[Related: Intel Announces New Global Channel Chief, Regional Engagement Model, Other Changes: Exclusive]

“The changes that they're making, if it is saving them money, then from our perspective, it sounds like they’re making the right investments in the right places because we haven't really seen that as a hindrance,” said Chris Bogan, vice president of sales at Houston-based systems integrator Mark III Systems.

Intel Global Channel Chief Dave Guzzi told CRN in an exclusive interview earlier this month that the chipmaker has increased funding this year for partner investment and incentive programs while decreasing direct coverage of partners and narrowing its ISV investment focus to AI software developers in response to mandatory budget cuts.

“We wanted to free up both our people and our money to be able to be more invested in things that we thought were the highest value and would give Intel the greatest return,” he said.

Partner Calls Loss Of Direct Coverage A ‘Non-Event’

Bogan (pictured above) said his company, Mark III, was impacted by Intel’s coverage reduction when the solution provider last fall lost its Intel salesperson, who helped the partner with various Intel matters. This resulted in Intel moving Mark III coverage responsibilities to a sales representative at TD Synnex, which, like other distributors, receives funds from the semiconductor giant to provide Intel-related resources to the broad channel.

However, the sales executive called the change a “non-event,” saying Mark III “didn’t really lose anything” from a “functionality perspective.”

“We’ve been able to get competitive investment funds where we need to. It’s always nice to have an Intel person, but I don’t know that we’ve seen anything that's been concerning or like, ‘Hey, we've lost support that we used to have and it's costing us business with Intel,’” Bogan said.

Kent Tibbils, vice president of marketing at Fremont, Calif.-based distributor ASI, said he sees the push for distributors to cover more of Intel’s channel partners as a “good opportunity” for such companies to “showcase our value and what makes us unique amongst each other to help support [them].”

Distributors like ASI can help partners with Intel-related matters ranging from product road maps and value proposition initiatives to inventory management and forecasting, according to the distribution executive.

“Intel understands, ‘We have a valuable channel. We have a valuable infrastructure here that we’ve done a great job enabling and supporting, and we have [it] in place for a reason, and that’s to be able to reach this breadth of customers and support the resellers and accounts that we can't necessarily reach,’” Tibbils said.

Partners Encouraged By Program Changes, AI ISV Focus

Tibbils said he found the Intel program changes outlined by Guzzi “very encouraging.”

“Clearly Intel values that infrastructure that they've created and that logistical supply chain they've created, and they want to keep that in place, and they understand the value that each level of partner can provide, especially distributors,” he said.

As for Intel’s plan to require partners to achieve certain outcomes like customer lead generation to receive market development funds, Tibbils said this kind of outcome-based model isn’t new for distributors and it should help solution providers deliver better results.

“It really puts a better bullseye on how those funds are going to be used,” he said.

Multiple channel partners who spoke with CRN concurred with Tibbils and said Intel’s new outcome-based MDF model falls in line with what other major vendors are doing.

“Having this be outcome-based is a great move. They shouldn’t be spending their money on companies that just check the box,” said Christopher Cyr, CTO at North Sioux City, S.D.-based Sterling, which is No. 54 on CRN’s 2024 Solution Provider 500 list.

The move by Intel to focus on AI ISVs was celebrated by multiple partners, including Mike Trojecki, senior director of AI practice at St. Louis, Mo.-based systems integrator World Wide Technology, No. 7 on CRN’s 2024 Solution Provider 500.

“If they're saying they're focusing on the AI side of the house from an ISV standpoint, that's exciting for us, because that's a key growth area for us,” said the WWT employee, who added that “some of these ISVs [will] be a critical part of the solutions we offer.”

One good example of the kind of work Intel does with ISVs is WaitTime, which has optimized its crowd intelligence software for Intel CPUs, according to Trojecki.

“They've done really well in that environment,” he said.

Trojecki also complimented the support Intel provides larger partners like WWT while acknowledging the reduction in direct coverage for other partners.

“The fact that Intel is focusing on some of the larger partners is a really good thing for us now. I feel bad for some of the smaller partners that are not going to get the love and attention, but the distributors do a good job,” he said.

An executive at a national systems integrator said he is glad to see Intel increase partner funding because he has witnessed firsthand AMD’s growing influence in the channel.

The executive, who asked not to be named to speak frankly, recalled telling an Intel channel executive months ago, “AMD is paying significantly to basically gain influence with our sales teams, and you guys just don't want to do anything. So I don't know what else to tell you, either match it or don't, but that’s how this is going.”

“They’re just waking up to the fact that ‘AMD’s starting to eat at us, and it is working,’” the systems integrator executive said.

Partners Concerned About Intel’s Nvidia Rivalry

While partners said they want to see Intel rise above the challenges it has faced in recent years, they think it will take a long time for the semiconductor giant to create formidable competition to Nvidia’s AI chip dominance in data centers.

What’s at stake for these partners and Intel is how much money they’re able to make together because Nvidia’s data center GPUs and GPU-accelerated servers carry much higher average selling prices than data center CPUs and standard servers, respectively.

Nvidia is also capturing a higher percentage of data center spending by selling its own servers and designing several other server components, like motherboards and data processing units. Commercial software is becoming a big business for Nvidia too.

Bogan, the sales executive at Mark III, said Nvidia is a “huge part” of his company’s business, which has resulted in the solution provider being named a top Nvidia partner for multiple years.

For Intel to compete against Nvidia’s AI computing business, which spans from GPUs and CPUs to entire systems and software, the sales executive said it’s “such a heavy left.”

This effort has been mainly happening through Intel’s Gaudi accelerator chips. Intel said last September that its latest, Gaudi 3, has a “price performance advantage” against Nvidia’s two-year-old H100 GPU while admitting the chip isn’t as fast. And last month, interim Intel co-CEO Michelle Johnston Holthaus admitted that Gaudi 3’s successor, due by late 2025, won’t be “fantastic” but will serve as a “good first step.”

“Nvidia has got such a head start that it's just a long road,” Bogan said.

The lack of Intel’s leadership in AI chips for data centers led one solution provider with a U.S. presence to choose AMD and not Intel for its AI center of excellence (COE) program, according to the partner alliance manager who manages vendors for the program.

AMD has made more aggressive claims against Nvidia’s data center GPUs with its Instinct chips, saying in October that its forthcoming Instinct MI325X can outperform Nvidia’s H200 that launched last year. The rival has also announced an accelerated road map that will see it release new GPUs every year, similar to Nvidia’s revamped strategy.

“I don't have customers asking for [Gaudi]. What I do see is customers asking [to kick] tires on a GPU-as-a-service provider that might have AMD MI300X GPUs [or the like],” said the partner alliance manager, who asked to not be identified because he was not authorized to speak on behalf of his company regarding this matter.

The solution provider employee said his company’s decision to not invest in Intel for its AI COE program doesn’t reflect its broader partnership with the chipmaker, which has allowed his company to drive many CPU sales for Intel.

But for Intel to gain ground in the AI chip market, the partner alliance manager said the company will need to find ways to convince partners to invest time into new products like Gaudi.

“It requires extensive knowledge and training. That is literally competing with the same hours in the day that we're leveraging to actually train and build up knowledge and teams around Nvidia. So it’s not just that you're competing for market share and awareness, but you're also competing for our time,” he said.

Intel’s Uncertain Future Weighs On Partners

Besides concerns about Intel’s ability to compete with Nvidia in the broader AI chip market, a few partners also said they were concerned about the chipmaker’s future after it faced some of its largest challenges last year, which included the abrupt departure of CEO Pat Gelsinger.

“It's hard to see their vision—even from the inside—and this is not probably the time to struggle with that,” said the unnamed partner alliance manager.

The solution provider employee said he doesn’t see this issue with AMD and Nvidia, whose strategies are made clear by their respective leaders, Lisa Su and Jensen Huang.

“You know exactly where they're headed and how they plan to get there,” he said. “That doesn't sound like much, but it allows everyone to move in the same direction.”

While interim Intel co-CEO David Zinsner said last month the company’s “core strategy remains intact,” the company will put an extra emphasis on the products group and push for a quicker return on investment for its manufacturing business, Intel Foundry.

However, the executive added that the possibility of the chipmaker separating Intel Foundry from Intel Products is an “open question for another day.”

Trojecki of WWT said this question has left him wondering about Intel’s future.

“I'm more worried about where Intel is going from an overall business standpoint. I think [Holthaus, who is also CEO of Intel Products] is going to do great on the product side, but what they do on the foundry side is going to be really interesting,” he said.

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