CHIPMAKER Intel likely will choose an internal candidate to replace CEO Paul Otellini.
Earlier Intel announced that Otellini will be stepping down as CEO in May, while it promoted Brian Krzanich, Stacy Smith and Renee James to new positions as EVPs. Now Otellini has said that his successor most likely will be an internal candidate.
Intel said it would consider both internal and external candidates to replace Otellini, however given Intel's history, work practices and company structure it seemed improbable that an external candidate would get the job. Otellini confirmed this when he told conference attendees, "It's not up to me [to choose the next CEO], but I think that's the most likely outcome," adding, "I'm very comfortable with the internal candidates."
Otellini acknowledged that Intel's corporate culture is something that external candidates might find hard to adapt to. He said, "In this environment, why take the risk and take the time? So my sense is that they will stay inside," adding that it would take an outsider two years to understand Intel's way of doing business.
While Otellini isn't picking his successor, the points he raised about Intel's culture and business processes confirm the thoughts of anyone who understands how the firm operates. Not only is Intel a blue-chip company that is known for its business conservatism, the firm has in recent years moved towards positioning itself further as a manufacturing outfit that designs chips rather than the other way around.
Otellini said Intel will continue its strategy of making investments in manufacturing, saying, "I don't expect our strategy to change. I think the board is very comfortable with the strategy and assuming we stay inside, I think the management team is as well."
Otellini's successor will have to step up to Intel's next challenge, which is to successfully launch the firm's chips into the high volume smartphone and tablet markets. Orchestrating the R&D, processor design and manufacturing to achieve that will be a bigger hurdle than choosing its next CEO. µ
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