Legendary former Intel CEO Andy Grove left us recently. Wearing many hats, he is an entrepreneur, a teacher, a writer, a philanthropist, etc. As Marc Andreessen says on Twitter, he is “the best company builder Silicon Valley has ever seen, and likely will ever see“. Even after more than thirty years, his book “High Output Management” is still a must-read for all middle level managers.
In his another best-seller book, “Only the Paranoid Survive“, he introduced the concepts such as “strategic inflection point” and “strategic dissonance”, which have become part of the lexicon both in academia and in practice. A strategic inflection point is a time in the life of business when its fundamentals are about to change. That change can mean an opportunity to rise to new heights. But it may just as likely signal the beginning of the end.
Andy Grove steered Intel through several strategic inflection points, for example, the shift from the memory business to microprocessors when they realized they couldn’t keep up with Japanese competition. Soon Intel will face another inflection point. Actually this new inflection point already started. Unfortunately, Intel doesn’t have Andy Grove any longer.
We all know that the computing world has moved from PC to mobile (and IoT in the future). Intel has been struggling with mobile. But it is not the worst. In fact, Intel has been doing very well financially because mobile devices need the cloud (read giant data centers). As all major players are building their cloud infrastructure, Intel sells a lot of high end server microprocessors. However, Intel should be really worry about this as the the low-cost, low-power mobile components are becoming the foundation of the next-generation datacenter.
One may argue that mobile processors are not powerful enough for data centers. It is true as today, just like mainframe people couldn’t image that PC will power data centers 30 years ago. However, mobile technology based data center will take off in the way of low-end disruption as technology advance will quickly enable them to meet the medium users’ requirements. Not only low-cost but also the low-power characteristics of mobile components are very attractive to data centers because of sky-high utility bills to power computers and cool them. Who doesn’t want to pay less and be green? Clearly, mobile-defined data centers present a huge opportunity for startups. On the other hand, it could be a disaster to Intel unless they work through yet another strategic inflection point.
Still doubt the idea? Check out this cool 64 node cluster, built with raspberry pi and lego, at the University of Southampton.