Intel Plans New Paid Software Services, Says CEO Gelsinger
Intel CEO Pat Gelsinger said the chipmaker was exploring new paid software services that would create new revenue streams for the company as part of its “software first” approach.
“I expect you to see more in this area: How are we leveraging our software assets? How do we have unique monetized software assets and services that we’re going to provide to industry that can stand in for themselves? And yes, that’s one part of the business model that I expect to do more of in the future, ”he said in an exclusive interview for the CRN cover story in October.
[Related: Intel CEO Pat Gelsinger: The Silicon Man With The Software Plan]
Gelsinger said the plan to generate more revenue from the software is a “somewhat natural progression” for Santa Clara, Calif., Based Intel that reflects the software industry’s shift to delivery-oriented models. Software-as-a-Service. He added that he had gained an appreciation for these models during his eight and a half years as CEO of VMware.
“We’re going to find other ways to deliver, and some of them will just be SaaS services that we provide. [Some of them will be] enabling services. Some of them will be paid services, and in other cases, hey, we’re just going to have more software products, ”he said.
The planned new offerings would be in addition to paid software offerings already offered by Intel, such as Intel Unite for collaboration and Intel Data Center Manager for real-time monitoring and management, as well as support services for Intel oneAPI and OpenVINO. The company’s paid software offerings also include Intel Smart Edge and SigOpt, which Intel acquired through acquisitions.
Gelsinger’s comments came as one of Intel’s main competitors, Nvidia, expanded its portfolio of paid enterprise software to a total of 10 offerings. This portfolio includes GPU virtualization offerings such as Nvidia AI Enterprise, which Nvidia believes could represent a multi-billion dollar opportunity over time.
When Gelsinger was CEO of VMware, he played a fundamental role in Nvidia’s GPU virtualization offerings by fostering a strategic partnership between VMware and Nvidia. But now that he’s CEO of Intel, Gelsinger has said that Intel needs to be more open than Nvidia when it comes to software.
“What are the ecosystem visions of these services? How can we build on what others are doing? ” he said.
Those comments were echoed by Greg Lavender, who Gelsinger hired in June as Intel’s new CTO and head of the new Software and Advanced Technology group. In a separate interview for the CRN cover story, Lavender said any new paid software service enabled by Intel processor capabilities should open up new business opportunities for the company’s partners.
“We must work with our partners to bring [those capabilities] advance in new ways that could create new business models, and there [are] revenue sharing opportunities there, ”said Lavender, who previously worked alongside Gelsinger as CTO of VMware.
As an example, Lavender said, Intel could offer new paid software services around the hardware telemetry capabilities of its processors, which can help uncover various issues in a system, such as poor system performance and power consumption. excessive energy.
Intel already uses telemetry data for Intel Data Center Manager, but its example, Lavender pointed out a new path: two built-in security capabilities for Intel processors that were announced in 2018. The first allows the processor to offload operations from security applications on the integrated graphics of the processor. The second uses machine learning algorithms to better detect threats on corporate networks while mitigating damage to processor performance and reducing false positives.
“You can then provide that telemetry to an IT department, to a department, VMware Carbon Black, for example,” Lavender said. “Because we have the platform and we know everything that works, and we know everything about power and battery life and all those other things, we can integrate that telemetry into a SaaS service. It doesn’t have to be ours, but it could be someone else’s or a partner’s, where they could potentially start to monetize this.
Regarding telemetry data from these security capabilities built into Intel processors, Lavender said the data could be used to improve the intelligence of a security service, which could allow such a service to block access of a device to a corporate network or to certain applications. . This example, he added, plays on major trends impacting IT services, such as remote working.
“These ecosystems are changing, and it’s not just you and your laptop anymore, especially if you’re a business user. This laptop is the property of the company. It plays in a corporate network ecosystem, but you move around in an unprotected environment, not in the corporate environment. So there has to be new technology, new software, new business models, new AI to make sure these devices follow the policy set by security officials, ”Lavender said.
Juan Orlandini, chief architect at Insight, an Intel partner based in Tempe, Ariz. And No. 14 on CRN’s 2021 list of 500 solution providers, told CRN it made sense for the chipmaker to explore further. of paid software services, because big changes are coming. to enterprise chip architectures, and some of these changes will benefit from some level of software abstraction.
“The whole range of what they have is changing drastically,” he said. “There are going to be changes associated with this, and [some of] these will be relatively easy to adopt and they will not need that person with a PhD. Others will be much more difficult to use effectively. And for that, it will probably make sense to charge for some of this software until it becomes commodity. It is not unusual.