Intel taps Otellini for new president
Published: 17 Jan 2002 09:39 GMT
Intel has named Paul Otellini, general manager of the company's PC processor group, as president and chief operating officer of the company -- giving him the inside track to becoming the company's next chief executive.
The Santa Clara, California-based chipmaker on Wednesday announced that with the promotion, Otellini, 51, will effectively run the day-to-day operations at Intel. Chief executive Craig Barrett, meanwhile, will concentrate more on strategic issues. The promotion takes effect immediately.
The promotion also makes Otellini the man to beat when it comes to succeeding Barrett. Historically, company presidents have gone on to the top spot. Barrett was promoted to president and chief operating officer while Andy Grove was chief executive. Grove, now chairman, then stepped down in 1998 when the company appointed Barrett chief executive. Until today, Barrett was Intel's president. The company has not had a COO since 1998.
Otellini's elevation underscores an ongoing change at Intel. For the past two decades, the chipmaker has concentrated most of its energies on the PC market and on churning out chips that are faster and cheaper than those from competitors. The first four chief executives all had Ph.D.s and came up with many of the scientific breakthroughs that helped create the semiconductor industry.
Starting in 1998, however, the company launched an ambitious program to diversify into communications, cell phones, online services and other markets, a strategy that has forced Intel to forge alliances with a wider variety of companies. As a result, sales, marketing, and general management and operations are becoming increasingly more important functions.
Otellini's claim to fame has come in sales--waging price wars against AMD and promoting the Celeron brand name--as well as representing Intel at international conferences and on Wall Street. He doesn't have a Ph.D. or even an engineering background. Originally, he had planned to go to law school.
"He is more of a sales guy," said Dean McCarron, principal analyst at Mercury Research. "Because you have a maturing business, that is the way you have to go."
Like many high-ranking Intel execs, Otellini is essentially a lifer at the company. He started at Intel 27 years ago and has held a variety of positions, mostly in sales and marketing. Before Intel, he worked in the San Francisco Bay Area's Candlestick Park stadium selling food in the stands while attending UC Berkeley.
Otellini's promotion, though, could set off a chain of executive defections. Intel lost a number of executives, including David House and Carl Everett, after it became clear Barrett would become the company's next president, according to sources. Sean Maloney, general manager of the Intel Communications Group, has often been mentioned as a potential chief executive candidate.
"As Intel's silicon products span beyond PCs and servers to communications, the job of keeping Intel at the competitive forefront with customers, the industry and government, and in internal operations has grown," Barrett said in a statement.
"The breadth and depth of Paul's experience certainly qualify him to take responsibility for Intel's internal operational excellence," Barrett said. "He headed our core microprocessor products business for the last four years after leading sales and marketing worldwide for five years, in addition to holding key product development and finance roles. Paul understands the dynamics of Intel's business, industry and company culture and has the skills to help execute on our plans and programs as we move forward."
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