Intel CEO Bob Swan will step down in February 2021, and VMware CEO Pat Gelsinger will succeed Swan as the chip giant's leader, the two technology companies confirmed today.
VMware's board has started a search for a new CEO to succeed Gelsinger. Zane Rowe, VMware’s chief financial officer, has been appointed Interim CEO, the software company said.
The CEO change at Intel is easily explained: While Swan comes from a business and financial background, Gelsinger is a trained electrical engineer -- which may help Intel to regain its R&D focus and technology footing.
Under Swan, Intel has struggled to deliver its next-generation chips. Further complicating matters, rival AMD has been gaining processor momentum, and Apple is shifting its Macintoshes from Intel chips to home-grown processors.
Amid all those issues, Intel has from time to time has delivered mixed financial results, and has considered outsourcing some manufacturing capabilities. Third Point, a hedge fund, began pressuring Intel’s board to explore strategic alternatives in December 2020.
In a prepared statement about the CEO change, Intel insisted that the leadership shift was not related to the company's financial or technology performance. Intel stated:
"Today’s announcement is unrelated to Intel’s 2020 financial performance. Intel expects its fourth-quarter 2020 revenue and EPS to exceed its prior guidance provided on Oct. 22, 2020. In addition, the company has made strong progress on its 7nm process technology and plans on providing an update when it reports its full fourth-quarter and full-year 2020 results as previously scheduled on Jan. 21, 2021."
VMware CEO Pat Gelsinger: Intel's Next CEO
Meanwhile, VMware CEO Pat Gelsinger has successfully extended the software company from server virtualization to multi-cloud management and hybrid cloud management. Key efforts have include network virtualization/software-defined networking (SDN), SD-WANs, unified endpoint management (UEM) and cybersecurity -- including the Carbon Black endpoint security acquisition.
VMware abandoned its own public cloud build-out, and instead partnered closely with Amazon Web Services (AWS) to introduce VMware Cloud on AWS. VMware also has working relationships with Google Cloud Platform and some dealings with Microsoft, despite various competitive issues.
Still, VMware's business transformation has involved occasional layoffs. Moreover, the company froze some salaries and cut some employee benefits amid the coronavirus pandemic. VMware parent Dell Technologies made similar cost-control moves during the pandemic.
Pat Gelsinger: Intel's First CTO Returns to Chip Giant
Gelsinger has been VMware's CEO since 20212. Earlier, he was president of EMC's Information Infrastructure Products business. Perhaps most importantly, he spent 30 years at Intel -- becoming the company's first CTO.
Intel's stock ($INTC) in pre-market trading this morning rose more than 10 percent amid the CEO change rumors. The chip giant confirmed the CEO change shortly after an initial report from CNBC.
