US slowdown was long overdue: Craig Barrett

"It's a magnet," says Craig R Barrett, explaining why he has

visited India six times in six years. "There’s all the activity, the

great educational system, the entrepreneurship, and the increasing importance of

India in the Internet world because of its software capability." But then,

the president and CEO of Intel does visit 30 countries a year.

In a round-table discussion with business and tech media editors, he

reiterated several times his well-known optimism about the economy and the

slowdown. The slowdown is an opportunity, he said. The leaders are not cutting

spending. Those who are facing cuts and write-offs have been those with

proprietary technology: "the Lucents, Nortels, and even to some extent the

Ciscos", and they are stuck with inventory. There may be a slowdown, but

peak Internet traffic continues to grow exponentially. "The good news is, a

lot of that over-investment and excess capacity in telecom is now going to be

put to good use!"

Does he have a take on the reasons for the tech slowdown? "I think it’s

a complicated issue driven by a number of things in parallel. The dot-com

implosion following the over-euphoria, the hangover effect from Y2k investments,

the economic slowdown in the US - after 10 years of expansion it has gone to

sleep...long overdue."

What’s the future like? At the tech forum later, Barrett talked about the

driving force, the Net, growing into a digital network with billions of nodes,

probably mostly on Ethernet - "which will remain the protocol of choice for

the networked world" - and the PC, which will remain the major force.

In the morning, Barrett inaugurated an Intel e-Business Solutions Lab at

Infosys City in Bangalore, the "first e-business solutions lab of its

kind." The Infosys lab will work on enterprise performance engineering on

Intel architectures, under Intel’s e-Business Solutions Provider program.

Excerpts from the discussion with the six editors:

Intel is going on this "macroprocessing" campaign as a major

strategic shift. Isn’t the "big iron" server space a real challenge

when Intel server is synonymous with PC server and you don’t have products in

the $10k-plus class?

Intel is already a significant player in the $10k plus segment, with

right-way IA32 servers, even a 64-way Unisys server. Sure, we have not been in

the real Big Iron, but the intent is clearly to be there. The best measure of

(the chances for Itanium) is that HP and Compaq have gone along with Itanium all

the way. IBM too is supporting us. There is probably only one systems vendor not

with us, (Sun Microsystems).

How does the slowdown affect your capital expenditure plans?

It’s well on track, our capital expenditure this year was a record for us,

some $7.5 billion. I have said we may review it next year, but that is an annual

process. We review it each year and it usually grows.

What are your plans for Bangalore? What did you discuss with the chief

minister?

Primarily, we plan to expand our engineering capability. We have over 500

people in the development facility here, focusing on (networking and other)

products as well as infrastructure-related services. We (with the CM) discussed

what was appropriate to promote the IT industry. Nothing very new: strong

educational system, telecom infrastructure, a government that uses and promotes

the use of this technology to its citizens...and I always bring up the question

of why any company would want to charge 50 per cent in taxes and artificially

raise the prices of PCs.

If Intel dominates servers and hand-helds apart from desktops, doesn’t it

open itself to monopoly issues?

We don’t plan to "dominate" - I don’t like to use that word.

But monopoly itself is not a problem or illegal anywhere. It’s what you do

with it, or if you use or abuse it. For instance if I said, "If you want

our processors you have to buy these five other things," that would be

abuse. But we don’t.

What do you gain from the Alpha technology and team acquisition?

The Alpha is a very performance-centric processor, and the design team is

very seasoned. There is also some great compiler technology there.

When you retire in four years, what legacy do you want to leave behind?

I want to make sure that Intel is recognized as a technology leader in its

chosen areas...is perceived as a leader.