Has this interview with Craig Barrett In India been brought in here yet? If you've seen it, ignore. Anyway, Craig a little on the irreverent side, if you can call slapping Cyrix irreverent.
india-today.com
"I am paranoid, and I believe in Moore's
Law. Besides, I am working out Barett's
Law"
On a two-day tour of India last week,
Craig R. Barrett, 59-year old President
and CEO of Intel Corp. lobbied with the
government, refined the
recommendations of the IT Task Force,
and offered a roadmap of business
computing in the next millenium to Indian
IT industry chieftains. A Ph.D. in
Materials science from Stanford
University, Barrett joined Intel in 1974 as
Technology Development Manager. It
took him 23 years to become Intel's
fourth President. Dr Barrett heads the US Department of
Commerce's Semiconductor Technology Council. Computers
Today's Atanu Roy caught up with him.
IBM, Hewlett-Packard, Cyrix, AMD all have laid out their
future processor roadmap. Also, AMD has returned to
profitability and Apple's iMac sales was phenomenal. Are
you worried?
As far as iMacs are concerned, I think Apple's volumes are
stabilising at somewhere less than 3 percent of the world market.
That might be a satisfactory level to keep them fixed in a niche
marketplace. But then, Apple's sales volume has been coming
down year by year.
AMD has been our competitor for the past 15-20 years. The fight
is primarily in the entry-level PC market. We'll continue to be
aggressive in that segment, although we recognise bigger
opportunities in workstations and servers in the higher end, both
32- and 64-bit. Cyrix continues to make announcements about
new products coming in. In fact, they are much better making
announcements than introducing products. At the same time,
whenever they launched any product, we have appraised our
whole product range.
Your profit in the third quarter this year was less than last
year's. Any particular reason?
We had record revenue in the third quarter, but profits were down
in comparison to the same quarter last year. One of the main
reasons is that we made a conversion from the so-called Socket
7 to the Slot 1 product line. The Pentium II family now has an
embedded cache on the little daughter card. That move helped
increase sales volume, but brought down margin dollars.
The other issue is the popularity of sub-$1,000 PC. That business
has lowered the average selling prices to some degree, and has
impacted just about everyone's profitability. Probably one
exception here is Dell Computer. It's because Dell has historically
not played in the entry-level PC market. Dell's average PC is still
about $2,000. So, their profitability was not hurt as that of
Compaq, IBM or HP. The real issue in the long term is whether
the market stabilises in this segment or not. If the sub-$1,000 PC
cannibalises the entire marketplace, there won't be any margin
dollar of profitability, and the industry will continue to bleed.
Has profitability anything to do with your decision of laying
off 3,000 heads?
In 1995-96-97, we added approximately 12,000 employees in
each of those years. We decided to decrease the size this year
through attrition of about 3,000 employees. So, after adding
36,000 in the previous three years if we are coming down by
roughly 10 percent, that's negligible. Across-the-board, there will
be some minor adjustments in our Asia-Pacific workforce, just to
balance them with the workload. Business in Asia-Pacific is not
growing as fast as it had been in the past few years.
What is Intel's vision about integrating more functionalities
in the microprocessor? Are you also planning
PC-on-a-chip or modem chips?
The industry has followed an innovation-followed-by-integration
cycle, for as long as I have been associated with it. You innovate
new ideas, maybe in accelerated cards or additional chips, that
functionality then gets integrated into the silicon. And then, that
portion of the industry which was innovating the capability will
innovate to the next level. If you look at history, there used to be a
math co-processor, which is now integrated into the board; you
can do modem functions, you can do DVD. If you look at the Intel
roadmap, it's no different, especially in the price-sensitive lower
end, where integration is one of the ways to get acceptable
performance at acceptable cost.
Almost all the microprocessor companies have announced
their decision to use copper technology in their chips.
What about Intel?
We don't believe that metalization is the most important
requirement for current-generation processors. More important
are transistors, switching. We want to stay with aluminium
metalization for the quarter micron and 0.15 micron technology at
present. When we go to 0.13 micron technology, maybe two and
a half years later, we want to introduce the copper metalization.
If you look at the initial product introduction by IBM using copper
metalization, they are actually running slower than the Intel
processor family. The decision to use copper was taken
unanimously many years ago. That was for the next generation
technology. IBM decided to jump much before the usage was
actually required.
Recently you said that Intel doesn't want to be just a chip
company.
I think if you take our vision of the future, which is having to serve
a billion networked computers in the year 2000, there is also the
opportunity of being a networking company targeted specifically
towards components. It's also the opportunity to sell services and
applications. To join that race, we have a software company
called PentaSic in E-commerce--that's the example of Intel as a
total solution applications company. Other areas such as digital
imaging, service over the Internet are also business opportunities
for us. It is correct to say that our main business today is that of
integrated circuit supplier, processors, controllers, chipsets,
cache memory, local area network, silicon solutions; but we are
also interested in system-level solutions in networking and in
applications space associated with the Internet.
What are your investment plans in India?
I think your question about investment concerns manufacturing
plants, design engineering facility. We intend to make direct
investment here in small steps, on a venture capital basis. We
have already made one investment, we have several other
opportunities under investigation. We are possibly the largest
venture capital firm in the high-tech industry. Last year we made
over 100 investments, for about $350 million, most of them in the
US. Our intention is to internationalise those investments. We will
make these venture capital investments in the small
entrepreneurial firms who have very aggressive and bright ideas
associated with the computer industry.
These will be hardware or software firms?
Both. They have to have exciting new technology to offer. Quite
often, they are software firms, which have technology targeted
towards the Internet or Internet-type applications; sometimes they
are in process equipment industry, which develop technologies to
process wafers in our manufacturing lines. It can go as well in
providing high-bandwidth, in cable, xDSL technology, satellite
technology, or digital entertainment. We will make the investment
and also put these companies in touch with other companies with
complementary technologies to enhance the prospect of a
success in bringing the technology to the market.
What were your recommendations to the IT Task Force
whom you met?
The Task force's vision about software development in India
corroborates with our vision about using the software talent
available here. We also discussed the privatisation of the
Internet, and Internet access. We see India as a software
provider, creator of value-added software for the Internet, for
entertainment and digital content creation. We also talked a little
bit about the ease of access of products, the impact of duties,
and customs regulations for infotech products.
Some of your motherboards are now stuck in the customs
department. Did you talk to the government about that?
I merely suggested that for a country that wanted to be a leader in
software technology you need an immediate access to the latest
in hardware technology. Confusion or difficulty in getting the
hardware technology through customs into the country is
detrimental rather than an asset.
What is your opinion about India's IT industry?
India has an opportunity to be a world leader in creating
value-added software. By value-added software I mean two
categories. One is of enhancing legacy software--using the
legacy processes and tools to create mini-age software; and
another for digital content creation for Internet applications. I was
pushing the concept that the Internet is the application of the
future and if you want to be a software powerhouse you should
focus on value-added content associated with the Internet, than
the more standard traditional legacy software associated with
mainframes and databases.
Many OEMs in India have been complaining about your
policy of selling the processors directly to any user. It
promotes the grey market, and eats into there marketshare,
they say.
What tends to promote the grey market not only in India, but all
over the world is the resell of our products. What we try to do is
combat the grey market by selling the product only when
someone needs it for manufacture. When we find that the product
in the market is resold, we try to trace to its source and then limit
that.
Andy Grove said, "Only the paranoids survive." What is
your mantra?
I get to follow several very esteemed icons in the industry: Gordon
Moore, Andy Grove... Gordon got a law named after him and
Andy has already "Only the paranoid survive". What I would really
prefer to do is not be remembered as the CEO of Intel when our
group tops the industry; I want to be remembered as the fourth of
the CEOs who did exactly the same thing--making Intel very
aggressive, number one in the industry, and continue the sort of
growth we had in the past. But I am very paranoid, and I believe in
Moore's Law. Besides that, I am still working out my Barett's Law.
Once I discover it, I'll let you know. |
