Intel
Intel CEO Bob Swan
- Intel's new CEO Bob Swan used to be its CFO, which has sparked a debate among analysts who wonder if he's the right person to lead the chip giant.
- Intel has been led mostly by engineers, and some analysts argue the Silicon Valley icon needs a technologist at the helm.
- Other analysts disagree, saying Swan's background is not an issue for a company with a 'deep bench' on the tech front.
- Visit Business Insider's homepage for more stories.
Intel's bumpy first quarter under new CEO Bob Swan has sparked a debate among analysts: Is the company's former CFO the right person to lead the chip giant at a critical juncture?
Swan was named permanent CEO in January after serving as interim chief following the sudden departure of Brian Krzanich, who stepped down last June. He joined Intel in 2016 as CFO after also serving in similar roles at eBay and EDS. Unlike his predecessors, like Krzanich, Andy Grove and Craig Barrett - all engineers -Swan's background is in finance.
In other words, he's a numbers guy. A respected one to be sure, but some Intel watchers have doubts whether he should be at the helm of the iconic Silicon Valley tech powerhouse now facing new market opportunities and challenges.
This was underscored two weeks ago when Intel reported first-quarter results. The company put out a disappointingly downbeat full-year outlook, and its data center business, which was supposed to be Intel's main growth driver at a time when the PC market continued to slide, saw revenue fall for the first time in years. On Wednesday, Swan opened his first meeting with investors as permanent CEO by telling them: "We let you down."
But he and his team also used the time with investors and analysts to paint an upbeat portrait of the chip company. They reaffirmed Intel's bright future in the data center market, while highlighting the other tech arenas where they said the chipmaker will compete and win: AI, autonomous cars and 5G.
Swan himself has gotten a lift from analysts who are quick to point out that many of Intel's current woes, including production yield issues and fallout from its decision to pull out of the 5G modem space, aren't his fault. Still, given Intel's recent woes, the spotlight is still on Swan's background.
'Not a silicon guy, but a bean counter'
"It seems like the company got behind during Krzanich's reign and has not recovered under Swan, who, as everyone has pointed out, is not a silicon guy, but a bean counter," Roger Kay of Endpoint Technologies Associates told Business Insider.
Martinwolf analyst Marty Wolf called Swan an "unconventional choice" at a time when Intel appears to have "gradually lost their technological and manufacturing edge."
"Bob Swan may be a good executive," Wolf told Business Insider. "But there is no question that Intel needs a strong technical leader."
That view was echoed by Joel Kulina, head of technology trading at Wedbush.
"100% agree with that statement and that was undoubtedly a major concern when Swan was announced," he told Business Insider. "What Intel needed, and needs, at the top is someone who knows how to execute and someone with a deep technology/architectural background."
A deep tech bench
Intel pushed back on that perspective. "Intel has a deep bench of technological talent," a spokeswoman told Business Insider. "We're attracting the best and the brightest thanks to a compelling strategy and unique capabilities that position us to make the best products."
And other analysts concur. IDC President Crawford Del Pete argued that Swan's background may even be a strength for Intel.
"I don't see that as a big issue for them," he told Business Insider. "I actually think that it could be very good for them, as it will allow them to think about what the market needs and the technology that they can deliver for any given market - rather than over rotating on the technology angle."
Bernstein Research analyst Stacy Rasgon noted that Swan's predecessor left problems that the Intel CEO must now try "to clean up." "So not sure it's the case that all tech-focused leaders have been good either," he told Business Insider.
Still, Swan must make technical decisions "that by his own admission he's not qualified to really judge," Ragson said.
"So it will fall to the bench," Ragson added. "At least they've hired some good folks." He cited Jim Keller, who is now general manager of Intel's Silicon Engineering Group, and Raja Koduri, the company's chief architect.
Patrick Moorhead, an analyst with Moor Insights and Strategy, also noted that not all Intel CEOs were engineers. One of them was the late Paul Otellini, who served as Intel CEO from 20015 to 2013, had a finance and economics background.
"The key will be if Swan can get the right kind of technical advice out of his staff to make core and important decisions," Moorhead told Business Insider. "I have talked with many senior executives at Intel, including engineers, and they want like and want Swan to succeed."
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