Intel backs data as it aims to outpace IoT market
February 16, 2017
At Intel’s annual meeting for investors last week in California, CEO Brian Krzanich said the flood of data being generated by smart, connected things and machines would be a driver of innovation and growth for Intel, and that its IoT business would outpace the market.
Krzanich (pictured) called data "the most important force in technology". He said he expected Intel to "play a vital role” in transitioning these data into practical and important tools to drive business and innovation.
The number of data-rich markets is large and growing quickly, which is also expanding the addressable market for silicon-based products. More data require bigger, faster memory as well as new modes of connectivity and more IT spending on devices, data centres and networks. Data are also informing where Intel directs its R&D investments. Krzanich said: "If the market doesn't generate data, analyse data or use data to drive action, we won't play in it."
While some data-rich markets are nascent, Intel sees incredible profit potential. Intel has won a leadership position in the established markets for server and PC microprocessors, and these markets – worth an estimated $45bn combined – will continue to be significant sources of revenue, profit, scale and IP. That said, the company is setting its sights on a much larger silicon opportunity fuelled by the explosion of data. Intel estimates the total addressable market for silicon will grow to $220bn by 2021.
Intel plans to invest in opportunities that build on its strength in PCs and servers, leverage its manufacturing leadership, and benefit from Intel's scale. During the day, Intel executives shined more light on the biggest expected growth drivers and investment areas.
Diane Bryant, who leads Intel's data centre business, said the continued rise of cloud computing and network transformation, and the growth of data analytics were the key growth drivers for Intel's data centre business. She explained how Intel was well positioned for long-term growth thanks to "an unparalleled array of assets" that included an exciting portfolio of adjacency products, such as silicon photonics, Intel Omni-path fabric, FPGAs and a broad portfolio of products for artificial intelligence.
Whether on the device or in the cloud, capturing, analysing and operationalising more and more data will require bigger memory and faster storage. Intel's non-volatile memory group is an adjacent, disruptive growth business with technology and manufacturing capabilities. Rob Crooke, who leads Intel's memory business, explained the advantages of Intel's 3D NAND SSDs and Optane technologies, which have strong connections to the company's core platforms in a fast-growing market segment that it has participated in since its inception.
Intel expects growth in its IoT business will outpace the market as the company focuses on vertical segments with multibillion-dollar market potential, including retail, industrial, video and transportation. Doug Davis, who heads Intel's automated driving group, described fully-autonomous cars of the future as "data centres on wheels", explaining that their complexity and computing power would require multiple high-end Xeons, high-performance FPGAs, memory, high-bandwidth connectivity and more.
Intel's manufacturing capability is another important investment area, and is foundational to the company's success. Murthy Renduchintala, who leads Intel's client, IoT and systems architecture groups, told investors that Moore's Law is alive and well at Intel.
"We currently enjoy a three year lead over our competitors' current process technology generations," he said. "If the trajectories hold, we will continue to maintain a three year lead in process technology, even after our competitors deliver on their 10nm plan."
New manufacturing process nodes are only part of the story. Renduchintala explained how Intel optimised its manufacturing process within each technology generation to deliver performance gains with new products on an annual cadence.
As Intel invests for growth in an expanding market fuelled by data, Intel CFO Bob Swan said the company would take a disciplined approach while delivering on its near-term commitments and placing a high priority on capital returns to shareholders.