Intel Shares More of Its Extreme Makeover

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Intel’s president, Renée James, on Tuesday.Credit Intel

SAN FRANCISCO — In the fast-moving technology business, it doesn’t pay to get sentimental. Still, not long ago, Intel had a much easier time telling people how to get rich.

“The world has changed,” said Renée J. James, Intel’s president. For two decades, Intel got rich on personal computers and computer servers. Now we are in a world of machine intelligence everywhere, and Intel has many more potential customers and allies. It also has many very real competitors.

Time was, “We’d talk about PCs, one platform, and the features they might build,” Ms. James said. “Now it’s about building services, with different parts, contexts and security.”

The change cost Intel dearly when it hung on to the PC-centric world. Since last year, however, when Ms. James became president and Brian M. Krzanich was named chief executive, the stock has risen to its highest level since 2002. The rise has much to do with thinking about how Intel works, things like its industrial relationships and how it rewards senior executives.

Makers of hardware and software services must be addressed in new ways. Intel has to make deals with a new range of companies. Its executives must show they have made Intel an important part of new industries.

All the changes were on display on Tuesday, when Intel, the world’s largest semiconductor maker, opened its annual developer forum. As always, Intel talked about its latest chips and gave some hints about the future. The idea is that the crowd uses this information to make successful products, thus increasing the consumption of Intel chips.

Instead of chips for Microsoft PCs, and the features they might tweak, 5,000 makers of devices and software applications heard about Intel on things like smartphones, tablets, personal computers, computer servers, cloud computing analytic services, sensors, wearable devices and cordless charging technologies.

There was even an Intel device that could sit inside a coffee shop table two inches thick and wirelessly charge phones, wearables and even some tablets and laptops.

In this new world, nearly all of the smaller devices are intended to connect to machines that collect and dispense data. These gateway machines then connect to servers in the cloud, which analyze the data from sensors and people.

For developers, the more sophisticated world of machine intelligence everywhere means that “instead of building features, we talk about building services,” Ms. James said. “We have to give them a parts kit, a content kit, a way to connect to other services and a layer of security, so you can build an overall service.”

It also means that, instead of just working with Microsoft and a handful of PC makers, Intel needs relationships with many companies. The Windows operating system is still important. But so are Google’s Android for phones and tablets and Chrome operating systems, as well as Linux for servers in data centers.

Besides Dell and Hewlett-Packard for servers, companies like Foxconn and Quanta figure into shipping bulk racks of servers, with software to handle data storage and networking, to data centers.

For all the complexity, Ms. James said, Intel can still hold its old profitability. The secret is to figure out how Moore’s Law, the notion that chip performance doubles every two years with little impact on cost, applies to each area.

“In general, we believe Moore’s Law scales to lots of areas, like battery life, security and aspects of communications,” she said. “We’ve added business units, we can still get economies of scale” from making lots of chips.

She added that, because  both devices and developers are more complex, “we have to be very thoughtful about how we evolve.”

Ms. James also noted that Intel is more active in things like industrial standards bodies, with an eye to making its chips work well on all kinds of devices. Senior executives, she said, are judged by more than sales of server and tablet chips.

Whether other companies join Intel-led alliances, or if Intel-type data analysis frameworks get used, also matter.

Does it work? The higher stock price is encouraging, but much remains to be done. In the PC world, Intel, in close cooperation with just one company, dictated much of the way things would work. Tuesday’s announcements were drowned out by Apple’s news of a bigger phone and a long-expected smartwatch. Clearly, the chip company isn’t yet at the center of the new world.

“In the PC days, we had a stable platform,” Ms. James said. “Brian and I are trying to get Intel back into tech leadership.”