Intel’s Christoph Schell warns partners of ‘pain’ on path to a better future
Intel’s CCO discussed company changes that he said will make Intel and its ecosystem better but are causing friction for partners and customers in some cases
Intel chief commercial officer Christoph Schell told partners and customers Tuesday that while the chipmaker is making changes that will benefit them in the long-term, he warned of “pain in the near-term execution.”
Schell, the head of Intel’s sales and marketing group, made the remarks in a live-streamed keynote on the second day of the Intel Vision 2025 event in Las Vegas.
On Monday, Intel CEO Lip-Bu Tan spoke publicly for the first time as the company’s new leader, pledging to learn from past mistakes to turn around the beleaguered semiconductor giant.
“I know that some of these changes, while they will be, from a long-term point of view, really beneficial, there is pain in the near-term execution,” said Schell, who was hired by former Intel CEO Pat Gelsinger for the California-based company’s top sales role over three years ago.
When Intel unveiled its plan to reduce costs by more than $10bn (£7.6bn) last August, the company told sales and marketing group employees that it would cut the division’s costs by more than 35 per cent, CRN reported at the time.
These cuts hit Intel’s global partner organisation, which reduced direct partner coverage and reworked its market development funds while it increased overall partner funding, Intel global channel chief Dave Guzzi told CRN in January.
Schell emphasised the importance of partners to Intel’s business and discussed changes that he said will make Intel and its ecosystem better but are causing friction with partners and customers in some cases.
“A big part of this is that we need to enable this ecosystem that Intel actually created many, many years ago to do more for us,” he said later in his presentation.
“So the opportunity to be more partner-centric, to pull you more into our go-to-market, and to almost outsource some of the coverage but also the product development when we talk about systems to systems integrators, to ISVs, is something that we really put into a priority play last year, and I want more of that in 2025,” Schell added.
Schell says product cuts have caused pain
Schell noted that Intel has “made a lot of [product] portfolio changes” that has allowed the company to “focus from an engineering point of view.”
However, he said, “it also means that some of you had to change your plans that you couldn’t plan anymore with products that were discontinued.”
“And I’m aware of that pain that is causing.”
Schell vowed that Intel will continue to be transparent with partners and customers about ongoing product changes, including ones caused by Tan’s plan to spin off what he considers noncore businesses, as the CEO vowed to do on Monday.
Tan, who started as Intel’s new CEO three weeks ago, has not yet told the company which businesses he is looking to offload, according to the sales leader.
“He hasn’t told us yet what this means.
“I got this question from a couple of you when we were at dinner, we are working [on] that,” Schell said later.
“We will be very transparent about decisions that we make on businesses, decisions that we make on road maps.”
Changes to sales rebates, processes, and MDF
Schell explained other ways Intel is transforming itself to work better with partners and customers, such as changes to various processes and the discontinuation of many rebate programmes.
Intel has discontinued many of these rebate programmes for partners in favour of reflecting discounts in the up-front pricing for its products, according to the sales leader.
“The idea is to be simpler for you to actually understand what your net pricing is with us, and to also take a lot of back-end resources out on how you engage with us,” Schell said.
“For us, the hit is on cash flow because we now pay you right when you place the order and when the product ships and the invoice goes out.”
In its bid to become “more agile and more flexible,” Intel has “focused” its resources and “changed processes quite a bit,” Schell said while acknowledging that the company is still the “100,000-employee giant” to some partners and customers.
“Being agile in a company that is as large as Intel is sometimes difficult, and it takes time,” he said.
Later in his presentation, Schell referenced partnerships with ISVs and systems integrators the company has invested in for its AI PC efforts, which includes optimising applications for its new Core Ultra 200V chips and the upcoming Panther Lake chips.
Schell said this focus is impacting Intel’s investments in the Intel Partner Alliance programme, including its contra-revenue spending and market development funds.
“We will transparently explain this to all of you,” he promised.
Growing emphasis on regional coverage, account-based marketing
As for Intel’s regional sales model that Schell started three years ago, the executive said the company is “continuing to move resources to a more decentralised setup.”
The company revealed a new regional engagement model last autumn that will put channel leaders in charge of every major region it covers, including NORAM, LATAM, APAC as well as EMEA.
Intel’s other major region is India, which Schell said he separated from Asia-Pacific because he views it as the “highest growth opportunity of any region.”
When the regional engagement model was announced last autumn, Intel told CRN that the company decided to limit its partner investments to 44 countries and regions in 2025 “based on operational and economic considerations.”
That coverage could change based on a review the company plans to conduct twice a year, it added at the time.
“We will change the shape of our go-to-market.
“We will change the shape of how we manage regions and markets based on where I see a pulse or feel a pulse and where we get a good return on our investment,” Schell said.
“The strength of the ecosystem is important, and that’s why I’m telling you all of this.
“Because I want you to pull with me in the same direction and see where there’s commonality in strategy, commonality in coverage,” he added.
Schell said Intel is shifting its marketing investments to “account-based marketing” because of an ongoing push by the sales leader to go after customers based on their industry or vertical.
“You will see less ‘spray-and-pray’ marketing efforts from us.
“Going forward, we want to be very targeted on key accounts, and we want that account-based marketing to really [encompass] the entire go-to-market value chain that we have to offer.”
Two verticals where Schell sees big opportunities are government and automotive, the latter of which has become a growing area of focus for Intel over the past few years.
“We have created for both government and for automotive a team that is basically a business unit but has also the go-to-market functionality embedded within the team,” he said.
Schell echoes Tan’s wish for honest feedback
Echoing Tan’s wish for partners and customers to be “brutally honest” with Intel, Schell said he wants the ecosystem to tell the company how it can “do better.”
“We have hundreds of enterprises in the room and online today, and that’s how we want to engage.
“We want to be specific to your company, specific to your needs, specific also to your competitive pressures.”
This article originally appeared on CRN UK sister website CRN.
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