Intel reorg spotlights emerging powers

Updated at 3:45 p.m. PDT, adding discussion about Sean Maloney and David Perlmutter.

Intel Developer Forum chip news took a backseat to a major executive shake-up at the chipmaker on Monday.

Much of the spotlight now falls on two key executives, Sean Maloney and David "Dadi" Perlmutter, who will co-manage the reorganized--and massive--Intel Architecture Group.

"This didn't happen overnight. This has been in the works for a few months," Intel spokesman Chuck Mulloy said.

Perlmutter's rise is not a mystery. He is connected to the Israel-based team that was responsible for the successful Centrino chip platform. "He managed the team that launched the technology that became Centrino," Mulloy said. And he headed the development of the equally successful Intel Core 2 duo--which is closely tied to Centrino--family of products.

Some observers believe that Israel's power efficiency-centric development group saved Intel, when its traditional strategy of cranking up single-core chip speeds to unsustainable levels began to falter.

And Apple CEO Steve Jobs heaped superlatives on Intel's dual-core architecture at Apple's annual shareholder meeting in April 2006. "This new (Intel Core Duo) chip is phenomenal--it blows away anything other suppliers have, including our former suppliers," Jobs said. Apple made the switch to Intel, largely based on the new--at that time--Intel Core architecture.

Maloney, most recently, has been Intel's globetrotter (unofficially) and its sales chief (officially). He travels constantly and had been based in the critically important Asia-Pacific region from 1995 to 1998, managing Intel's sales and marketing activities there. He was promoted to senior vice president in 1999 and executive vice president in 2001.

Maloney also led the Intel Communications Group, which was not considered to be a success in some respects. Intel sold off a chunk of this group--its communications chip business--to Marvell in 2006.

Intel had originally envisioned the communications market as a hedge against the expected maturation of the PC market, as CNET News reported in 2006. But building chips for PCs is much different than building chips for communications.

"That was Intel's first foray into communications. He was assigned to pull it all together. The fact that a lot of those businesses were sold and took write-offs is well-known, but we learned a lot from it too. Centrino would not have been able to make wireless (Wi-Fi) ubiquitous without that experience," Mulloy said. "There were certainly some failures, and we took some charges as a result," Mulloy added.

Maloney also had been overseeing--and will continue to oversee--Intel's work on WiMax, a wireless broadband "4G" technology that faces market acceptance challenges.

Nevertheless, Maloney brings a breadth of experience to the job that other Intel executives don't have. "They like the mix that Sean Maloney brings to the table," said Doug Freedman, an analyst at Broadpoint AmTech.

"He has a broad portfolio of experience. He has the management experience geographically and a wide knowledge of the market on worldwide basis," according to Mulloy.

Maloney was appointed co-manager with David Perlmutter of the Mobility Group in 2004. In July 2006, Maloney was appointed chief sales and marketing officer.

As a result of Maloney's move, Tom Kilroy will lead Intel's Sales and Marketing Group. Kilroy was previously co-manager of processors for enterprise-class applications, the unit previously known as the Digital Enterprise Group. Kilroy will report to CEO Paul Otellini.

Another big executive change is putting Andy Bryant, previously chief financial officer, at the head of the Technology and Manufacturing Group, Intel's jewel. "He's helped the manufacturing organization through a number of transitions in recent years. He's very capable of running that group," Mulloy said.

Separately, as reported earlier, Intel also announced on Monday that Pat Gelsinger has decided to leave the company and will pursue opportunities at EMC. Gelsinger had co-managed the Digital Enterprise Group.

"If Pat hadn't made the decision he made, there would still be a place for Pat in the organization. Pat made his own decision--what he wanted for his career," Mulloy said, adding that Gelsinger was extremely dedicated to Intel and "bled (Intel) blue."

Gelsinger had been part of a group that was responsible for Intel's NetBurst technology, considered, ultimately, a failure by analysts. NetBurst is often associated with the Pentium 4, one of Intel's least technologically successful processors. But, more important than this, Gelsinger may not have had the breadth of management experience necessary to rise to CEO.

Bruce Sewell has also decided to leave the company to pursue other opportunities. Sewell served as Intel's general counsel. Suzan Miller, currently deputy general counsel, will take the role of interim general counsel.

The biggest structural change overall is centered on consolidating Intel's major product divisions into the Intel Architecture Group (IAG), a group that existed before but is being reorganized. Maloney will be responsible for business and operations, while Perlmutter will lead product development. Intel's components businesses, along with development and marketing teams, will report to them.

There will be six business groups operating under the newly organized IAG umbrella, including the PC Client Group that will place Intel's existing mobile and desktop product operations under Mooly Eden. The Ultra Mobility Group will continue to be led by Anand Chandrasekher and focus on mobile handheld devices.

Other IAG groups include the Datacenter Products Group, focused on servers, cloud computing, networking, and high-performance computing, led by Kirk Skaugen, and the Visual Computing Group, focused on advanced visualization products and headed up by Jim Johnson.