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Intel promotes Swan to CEO, bumps off Itanium, and eyes Mellanox

News Analysis
Feb 04, 20193 mins
Computers and PeripheralsData CenterTechnology Industry

Intel announced the promotion of CFO Bob Swan to CEO, ending a seven-month search, set a deadline for the life of its Itanium processor, and reportedly wants to buy Mellanox.

Intel logo
Credit: Martyn Williams/IDGNS

It was a busy week for Intel as it announced the promotion of CFO Bob Swan to CEO, ending a seven-month search, set a deadline for the life of its ill-fated Itanium processor, and is now reportedly in the running to buy Mellanox.

I don’t think for a second these are unrelated. Swan is a money guy. Ending the life of Itanium and making a strategic acquisition are right in his wheelhouse.

Swan’s elevation is just what analyst Jim McGregor called for a few weeks ago when I asked what was taking so long in the CEO search. Swan, 58, who joined Intel as CFO in October 2016, becomes Intel’s seventh CEO and only its second non-engineer. The first was the late Paul Otellini, and he worked out very well.

In mid-January, The Oregonian reported that Intel Chairman Andy Bryant, who was once CFO, had said Intel was looking to go with a “non-traditional” candidate, suggesting a CEO from outside the company or a woman or both were a possibility.

In a statement announcing Swan’s promotion, Bryant noted: “Important in the board’s decision was the outstanding job Bob did as interim CEO for the past seven months, as reflected in Intel’s outstanding results in 2018.”

Intel has slowly gotten its act together after the mismanagement of Brian Krzanich, but it also warned that 2019 sales might be down due to weakening data center server chip demand in China and a slowdown in purchasing by major public cloud providers.

Intel Itanium processor ending

Second up is the news that the Itanium has finally reached the end of the line. Intel sent a notice (pdf) to vendors earlier this week stating that the company would take its final order for the Itanium 9700 series on January 30, 2020, with the final shipment date to take place on July 29, 2021. HPE, the only real champion the Itanium ever had (because it used a lot of HP’s PA-RISC technology), said it would support the doomed processor until the end of 2025.

Intel reportedly makes bid for Mellanox

As for Mellanox, the company has had a number of suitors and reportedly has offered itself up for sale as far back as 2017. The most recent suitor was Microsoft, which would have been a bit of a mismatch — a software company buying a silicon company.

Intel makes much more sense, and according to the Israeli publication Calcalist (article in Hebrew, have your translator ready), Intel has made a $6 billion mostly cash offer for the company. The news was met with skepticism from the Susquehanna Financial Group, which cited Intel’s lack of a CEO. The investor site Seeking Alpha ran an article citing Susquehanna’s concerns, and one day later Intel solved that problem.

Intel has a sizable development team in Israel, and this wouldn’t be the first Israeli company Intel bought. In 2017, it bought MobileEye, a maker of artificial intelligence (AI) sensor technology, for $15 billion. More than a few people told me they thought Intel grossly overpaid, but that was a Krzanich deal.

Good luck, Swan.

Andy Patrizio is a freelance journalist based in southern California who has covered the computer industry for 20 years and has built every x86 PC he’s ever owned, laptops not included.

The opinions expressed in this blog are those of the author and do not necessarily represent those of ITworld, Network World, its parent, subsidiary or affiliated companies.

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