The Third Line Of Gurus: Intel CEO Looks To Carve A Niche In Marketing Space
Paul S Otellini, the fifth in the line of chief executives of Intel, is not a chip off the old block. The 59-year-old describes his immediate predecessor Craig Barrett as the “manufacturing guru” of the tech bellwether while Andy Grove before him was the “management guru.” Intel’s founders Gordon Moore and Bob Noyce were entrepreneurs and the inventors. Mr Otellini is shaping up to leave behind a legacy as the marketing guru. India, where Intel develops some its most cutting-edge chips, is where some of that legacy is going to be shaped. As computers and notebooks get cheaper, Otellini sees Intel at the forefront of enabling these devices with wireless broadband technology. Setting up a semiconductor manufacturing unit in India will have to wait, he tells ET NOW’s Abha Bakaya. Excerpts:
Going ahead, are you actually seeing more spending returning? Do you think corporate budgets are on the uptick?
Not yet. The bulk of the purchases have been driven by the consumer market and there have been data centre upgrades as people try to find more energyefficient servers but corporate spending tends to be down on an annual basis. I think most CFOs are going to look at 2010 probably in the next month or two and decide what their budgets are. I do think there is good opportunity for an upgrade cycle. (In) most corporations, the fleet of PCs is old now. So, the combination of the age of the machines and the desire to upgrade to a new operating system could be the driver for 2010 volumes.
Do you think Moore’s Law will finally hit a wall at some stage. What kind of new technologies are you exploring at this time?
Sure, what you have to understand about Moore’s Law is not a law of physics, it is not like gravity. It is a law of human inventiveness, it has always been a law of human inventiveness and Gordon (Moore) himself will tell you that he never saw how the law could be sustained within five years but we have three generations of technology in development of Intel today beyond our current one — that is six years out and we are comfortable we can deliver, we can scale silicon at least that far. Beyond that we are looking at other structures but we are not going to be the first company to drop off of Moore’s Law I think.
What does Win 7 mean for Intel?
Paul Otellini: Well, I think it’s good. We worked closely with Microsoft on a number of features around our architecture and theirs for faster boot up and better energy efficiency. Particularly in laptops, we worked closely with them on power management to make sure that the battery life was better than working on Vista. We worked with them on our security features and manageability features. I think they did a good job and is nicely wed to Intel architecture.
The EU Antitrust Authority has decided to fine Intel $1.5 billion for keeping AMD out of the market, what is your reaction to that?
At the end of the day what Europe is accusing herself (of) is selling chips too cheaply. So it is hard to imagine who is hurt. Consumers benefit by that because they get the best technology at the lowest prices. I do not see this changing the competitive nature of the industry. It has always been competitive. When we have the best chips we gained share, when others have the best chips they gain share. At this point in time, we have the best chips.
Do you think it makes sense to perhaps manufacture in India or do you still feel there are some hurdles when it comes to considering that?
We build our factories for the global market and our products are not regional. Sometimes, they get implemented in computers that are regionalised but we build chips for the entire world. We do not have a need for another factory. We extend the network to get plenty of capacity. Though the next time that we will look at capacity increments we will look again in India.
If you think about our growth in India over the last 10-15 years, we started out with the sales presence as most companies do. We expanded that to a facility in Bangalore where we did a lot of our internal information technology software work and then subsequently have expanded down there to do a lot of chip design. Our high-end server chip called Dunnington was done here. A lot of our chip sets are done here from a mobile environment. So we have been very happy with the quality of the workforce, the inventiveness, the access to highly educated people coming out of colleges and so forth. So it is a good investment for us.
Has the nature of your work in India changed would you say any breakthrough innovations that are coming along?
The nature has changed in what we have done over the last 15 years in sales to information technology, software development and now global product development. So yes, it has changed pretty dramatically and our workforce has grown as a result of it. The products that we are designing here are done for the worldwide market and they have been hopefully good in terms of creating market share, leadership and performance.
Give us a sense of where India fits in exactly in your plans compared to your other regional markets?
Well, this has been a market that we have been excited about for some time and if you look at the penetration of products like cell phones, it shows there is a propensity to adopt new technology rapidly so now that the price of computing is coming down to places which it is much more affordable now. With things new products like net tops and net books, you are starting to see penetration. I was told that the net top business has grown substantially. It was the new class of machines and we will enable those with things like WiMAX to be able to allow the rural parts of India the same kind of accessibility that you can get in the main cities.
