Intel CEO Bob Swan to step down, VMware CEO Pat Gelsinger to replace him

A single good teacher can make all the difference in the world.

If I may ask, any pointers on how is the stress level in your role currently/over the course of years and what is the difference in your compensation and your colleagues compensation cumulatively?

Speaking as an ex-Pivot (but only for myself), a couple of thoughts:

- VMware grew almost 2.5x under Pat. Obviously their core franchise is about harvesting, but new adjacent products like NSX and VSAN helped a lot with growth. They just took a long time to get traction given the customer base, who don’t like change. VMware Cloud on AWS has been surprisingly strong even to skeptics like myself.

On the other hand, companies would get rid of VMware if they could, and they tried and failed with OpenStack. The hypervisor is commodity, but the overall compute/network/storage private cloud system isn’t trivial. Turns out “holding hands” whether by software or services is pretty valuable?

Public cloud of course is a substitute, though private clouds and data centres have survived and thrived as well (for now).

- Pivotal had a boutique software and services model that would be difficult to scale as a public company given the current shifts in the enterprise fashion away from productivity-at-any-cost (PaaS and serverless) and towards perceived low cost building blocks (Kubernetes and its ecosystem).

But it would be an gross oversimplification to suggest this was merely a vanity project for EMC and Dell. It took in $500m+ annually on open source software (and another $300m in services), which is no small feat, though still minuscule given what surrounds it. But anything new has to start somewhere. Not enough to impact the mothership’s balance sheets, but there was something special there that could be nurtured. Whether it can be, or whether the differences matter enough is anyone’s guess.

Pat could take Intel in a direction we don’t anticipate. VMware was written off for dead when Pat came on but he managed to buy it another 10-15 years and at peak a doubling of the stock price. He’s probably learned from that.

Keeping in context that I've not worked with him in (gulp, 30 years!) at Intel he was one of the folks who put problems into the whole picture. So a customer would say, this chip doesn't work, over at Systems Validation we would get hopefully enough information to re-create their problem on an Intel built board, and Pat's job (at the time) was to co-ordinate between us, design engineering, and marketing to figure out how to tell the customer to proceed.

The "actual" problem could be anything from the customer misinterpreting the datasheet (Marketing/Comms problem), to insufficient testing (Factory/Production problem), to chip function (Design Engineering problem). As a "new college grad", or NCG in the lexicon, I admired how he dug out details from various folks to get to the real problem. He always had ideas for things Systems Validation (SV) could do to maybe trigger the problem that made sense to me. He really embodied the philosophy of fixing the problem not fixing blame on some group.

A sociologist I met described it as the "generation effect" which is that people live in a cohort of other people about their same age +/-10 years. Throughout one's life the composition of the cohort changes as you begin to specialize starting with college/first job and continuing if you focus on a particular area (for me it has been systems analysis).

This effect can drive people to over-pay to go to "good schools" or work for less than they think they should be paid at the "good places to work" because it lets them join a cohort with members who are statistically more likely to be "successful" (for some arbitrary definition of success). I personally never paid much attention to it but thought about it when talking with this person.

I know from experience that it happens in Silicon Valley that someone will say, "Oh I know someone at some previous company who is really good at that, let me see if they would be willing to change jobs." That is why companies pay people bonuses for "referrals."

I suspect it happens in LA in the entertainment industry as well. If you watch the old American television series "ER"[1]. Produced by Steven Spielberg's Amblin Entertainment production company, it is amazing to see people who were on that show first as guest actors and then show up later in series.

[1] https://www.imdb.com/title/tt0108757/

"It's just too late to turn them around" is pretty much what people said about Apple when Steve Jobs returned, though (in fact, it's more or less what I thought as well).

As Adam Smith said, "there is a great deal of ruin in a nation", and likewise, big companies generally get more opportunities to reinvent themselves than one would expect.

Yea, I'm not sure what their plan is other than to keep trying to sell to institutions until everyone makes the switch to someone else.

If they actually want to survive long term, there are two paths as I see it:

A) Be legitimately better than AMD, this could include opening up the management engine, much higher performance chips at lower price points, or some sort of space magic utilizing their Altera acquisition.

B) Embrace RISC-V and push it to laptops and desktops HARD, while not pulling the Microsoft Embrace Extend Extinguish™ play. If they go this route then their stock becomes an exceptionally strong buy IMO.

The same could have been said about AMD 7 years ago. Then Lisa Su came.

I recently purchased a MacbookPro w/ an M1 chip and i'm taken aback at the value/dollar, compute/power, compute/heat, compute/noise. I love the MBP-m1.

I realize that WinTel machines arent going anywhere because of entrenched business use -- but between NVIDIA GPUs for heavy workloads and M1s for day-to-day activities -- what is the feeling inside Intel right now? Is this like a Microsoft-Netscape moment in the 90s?

They still have a lot of money in the bank (and more coming in). I see no reason why they can't turn things around if the right people are in charge.

I'm old enough to remember writing IBM off in the early 90's and Microsoft off in the late 2000's. These companies had one thing in common: giant war chests of cash and legacy businesses that were still pumping out money by the truckload. It's not like a startup/small business that's riding on a razor's edge, these companies have so many resources they can keep searching for a way "out" of their predicament for a very long time until they finally land on the right combination of people, vision and timing.

We see it now with Google now being the "evil empire". They haven't had a real hit since Android and seem to be floundering, but online ad revenue is such a huge geyser of cash they're gonna be fine for a very, VERY long time.

Why would amd be screwed?

I worked at VMware when Pat first became the CEO. Pat is very much an engineer. If you ever wanted an engineer as your CEO, then that's Pat. That comes with some goods and some not-so-greats. Pat isn't very inspiring, at least not when he first became CEO. But I always got the feeling that he genuinely love engineers and is more comfortable around them than anything else. I once hosted a fun little engineering challenge (building bridges out of spaghetti). It wasn't a fancy event -- just a bunch of engineers having fun. Pat actually agreed to come by to hand out the awards at the end. I left VMware partly because I've been there so long and partly because I wasn't excited about it anymore. I felt its best days were behind it. Well, Pat proved me wrong by a wide margin. If no-nonsense engineering is what you need to win, then Pat is the right person for the job. It's a good day for Intel I think.

It's actually more complex than that, when a big company wants to reduce workforce they will fire the bottom and offer retirement packages to their oldest employees which are above or near retirement age, sometime as much as a full year of salary.

The intuition is that older employees cost more and by cutting them you can reduce your payroll more significantly while doing what looks like smaller employee cuts from the outside. This is often viewed favourably by investors because on paper it doesn't seem as the company is stalling (head count is still high, costs are down). The obvious issue is that these older employees are not easily replaceable and you end up losing more velocity in the long run than originally anticipated.

The above is more applicable to traditional blue-chip businesses where workforce movements are more limited. For software engineering (which Intel is not really) your assumption is correct and once cuts are announced a lot of your great engineers will jump ship.

I’m not sure Itanium was a technical failure, to me it always was a business model failure as that CPU was co-developed with HP and essentially became a dedicated HP-Oracle box and by the time the ecosystem was opened up it was too late.

The heavy reliance on the compiler for ILP was an “odd-choice” but not something that was unsound in principle.

If the ecosystem was more open from the get go and more vendors were involved it had a much better chance of taking off.

And if nothing else at least it was something new.

The biggest disappointment I have with Itanium is that it and later Larabee/XeonPhi kinda pushed Intel even further into their own little x86 box when it came to processing units.

I think that failure is also why they haven’t really done anything interesting with Altera.

From my personal memory at the time, early NUMA multicore on Windows wasn't the smoothest sailing.

In fairness it's not like Microsoft are alone in that. Single-thread performance is still incredibly important. The Mill focuses on single thread performance almost exclusively for that reason: nobody ever made the mythical auto-parallelising compilers we were all supposed to have by now, not even for Haskell. The big wins for exploiting parallelism in most ordinary software have been just scaling up lots of independent single-threaded transactional workloads via sharding, and massively concurrent runtimes like the JVM where you can move all the memory management workload onto other cores and out of the critical paths. In terms of ordinary programmers writing ordinary logic, single-threaded perf is still where it's at which is why the M1 has 4 big super-wide cores and 4 small cores rather than 32 medium cores.

BK was an engineer too but still managed to pull an Elop.

Swan was utterly the first option.

The argument I've seen for outsourcing is that everyone uses machines from ASML et al anyway, so retooling to run a different company's silicon may not be as impossible as it seems.

I think there's an issue with helping Intel temporarily, because if you're TSMC you'd rather use your capacity to serve long-term partners rather than helping Intel bridge the gap to 7nm only to get dropped a couple of years from now when they get their chips in order.

Arguably a re-aquisition. Gelsinger was at Intel for 30 years.

Time to sign your startup in for the lottery. Your company might be the next Pure Digital or Autonomy Corporation!

Here I think of it as “committing to the direction,” the way you “lean into” a tight turn on a bike or motorcycle. It’s similar to “doubling down” or other euphemisms for committing harder to a course of action.

The metaphor works for me ¯\_(ツ)_/¯

Hey don't expect help here, I barely speak my native language correctly let alone English :)

I play it by ear and there's a high chance the "leaning into" expression was used incorrectly. I meant to say, the board was more inclined to follow a roadmap than other options.

"Lean in" was popularised by Sheryl Sandberg. It's popular with management types and wildly unpopular with folks who feel that "just work harder" coming from an actual billionaire is a bit patronising.

It's like when someone tells you your singing is bad, so you purposely ham it up for laughs. That's leaning into it.

“Leaning in” is a body gesture managers use in conversation when they want to appear sincere and committed.

They have since decided that “leaning in” is all you really need to say you’re doing to communicate to others they’re taking you seriously, perhaps with some compassion (implied).

Corporate-speak at its finest!

>Roughly 40% of their revenue is consumer chips where, apart from some games optimisation, they are no longer standing out from the crowd, and the leader is arguably Apple, with AMD doing well.

You lost me at Apple. Apple owns around 15% of the PC market space and almost the entirety of that is Intel-based systems. Outside of HN, nobody cares about the M1 chip, it isn't a selling point to my mom or her friends. If someone at the Apple store recommends it they might buy it instead of an intel-based system but it definitely isn't something they're seeking out.

The only threat Intel has right now in the consumer space is AMD, and it's a very real threat. AMD won both Sony and Microsoft console designs, and the mobile Ryzen 5000 chips released at CES look to have enough OEM design wins to put a serious hurt on Intel in 2021.

Even if Apple goes 100% M1, there's the other 85% of the market that Intel is likely far more concerned about.

I agree with your market breakdown, but surely not with your assessment.

In the consumer segment, you have regular people trying to make vacation videos with software like Adobe Premiere and Adobe Media Encoder, or Magix. Nvenc quality is bad. AMD is horribly slow. The only fast high quality encode is with Intel's dedicated CPU instructions, which both apps heavily promote to their users.

And the 30% that you mention that run VMs... Wouldn't they be pretty happy if Intel added dedicated CPU instructions to make VMware better?

I agree that for the work that I do, AMD is as good as or better. But people doing highly parallelizable tasks like compiling are the minority.

I've understood it as a critique of a previous CEO, not the new one.

But us customers can watch Intel succeed again, rather than squander 7 years.

This x 1000.

I'm not sure I agree with that. I've been there now over 8 years and the only difference since Dell bought emc is they are cross selling. In terms of product development, staffing, benefits etc they have no influence. This is in opposition to EMC, who had a lot of benefits and nice things like free coffee cut to match with dell.