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The Rediff Business Special/Neena Haridas

'I expect to see exponential growth in India's Internet economy': Craig Barrett

He thinks, walks, eats and sleeps technology. But he does not believe that technology is the solution to all complex problems. Craig R Barrett, president and chief executive officer, Intel Corporation, believes a technology is "only as good as its ability to increase business efficiency".

Armed with a doctorate degree in Materials Science from Stanford University, Barrett joined Intel Corporation in 1974 as a technology development manger. He was elected to Intel's Board of Directors in 1992 and was named the company's chief operating officer in 1993. He became Intel's president in May 1997 and chief executive officer in 1998.

Barrett is in India in his bid to hardsell Intel's new strategies for global e-business and share his vision of the growing potential of electronic commerce. Here, Barrett shares his views on India, e-commerce and his company's plans.

India and the Net:

The business-to-business e-commerce worldwide is expected to grow to $7 trillion in the next four years. The Asian market is expected to account for 14 per cent of this business-to-business market segment, growing at an estimated rate of 150 per cent through 2004.

Forecasts show that B2B sales in Asia, excluding Japan, will reach $ 1 trillion within the next five years. With the Internet as the driving force behind the dramatic changes in business today, I expect to see exponential growth in India's Internet economy.

Now, the question is: 'Who will be the Internet Hub in Asia?' Will it be India? Well, the race is on for Internet leadership in Asia and the country which embraces the Internet the fastest will hold the leadership position in the region.

Indian businesses face the challenges of expanding their e-business infrastructure at a rate which keeps India in pace with other Asian countries. This expanded infrastructure will bring costs down and drive adoption levels much higher!

Intel's role in India's Internet revolution:

India needs many ingredients needed for e-business success and just needs to add world-class telecommunications and information technology infrastructure. To compete in the race for Internet leadership, India needs to continue to increase PC and Internet use, develop hosting centres and build system integrator services.

This is where Intel will play a role. Intel is supporting India's need for rapid Internet growth through strategic investments, development activity in India and education initiatives. This will be done using a three-pronged strategy:

• One, Intel will act as sensible venture capitalist. In the last one year, we have invested $10 million in various ventures including Internet services, portals, e-commerce sites, etc. However, this year, our VC funding will go ten-fold to $100 million. All of this investment will be aimed at promoting the Internet economy and the technology required to meet this end.

• Two, development activity. We have already set up the Intel Development Centre in Pune. But we intend to set up more centres of this sort which will again be aimed at providing the technology needed to expand this industry.

• Three, education. We have launched a massive drive to educate teachers and to enable schools to deploy technology as a learning tool.

As a region, Asia needs to continue to reduce access costs and deploy telecom infrastructure. To harness the Internet economy, the region should focus on developing and investing in Internet infrastructure and B2B e-commerce. By building intra-Asia Internet links, Asia will develop a robust regional Internet.

By building a strong e-business infrastructure and solutions, Indian businesses can increase their productivity and meet the demands generated by the exponential growth of B2B e-commerce.

On the dot-com bubble burst:

It is not that the bubble will burst and companies will shut down. The fittest will survive. Successful companies will be the ones who become 100 per cent e-business units by integrating all segments of their business, from internal and external customers and suppliers, partners and affliates, in an e-business environment.
When designing your e-business systems, you need to balance the competing forces of customer value, operations excellence, rapid deployment and new business opportunities. These forces make demands on the whole e-business systems and infrastructure and require companies to consider trade-offs of maintaining cost, managing operations, and the value that they are bringing to the customer.

Remember one thing: More electronic transactions means more digital transactions, which in turn means more analysis. And this only means one thing: more business advantages.

On expectations from India:

Believe it or not, 30 per cent of the total Intel sales come from the Asian region. Of this, India is a huge market. Although putting figures will be a problem, we expect our India business to grow more than 50 per cent this year. And by this I don't mean that our business will suddenly come from e-commerce. No, our major sales revenue will still come from our core business of micro-processors. However, in the next three years, the two businesses will balance out to our advantage.

On the future of Intel's microprocessor business:

With the launch of our e-commerce oriented business, by no means does it mean that we are ignoring our core area of microprocessors. Of course, our microprocessors will be the prime product in the market and our branding strategy will continue to be the 'Intel Inside' campaign. However, with every campaign, we will make sure that the market gets tuned to the changes in the techonology -- which includes the Internet.

On Intel's relationship with Microsoft:

Yes, Microsoft is having its problems with the department of justice. However, I never make any comments on this. We are two different companies with mutual interest in technology and we work together on a day-to-day basis on several projects. By no means have we called off these projects and there is no intention either.

On Intel's fears:

Frankly, I wake up every morning with the fear that we have not kept pace with our own plans. It is the pace at which we plan ourselves that is scary. I mean, I fear, what if we make a chip and it is not able to perform the way we wished it would? What if we go slow and we do not meet our targets? Otherwise, we have no fear of competition. We do not have the fear that our competition will beat us to a technology. That is not going to happen.

ALSO SEE

Intel Insight: Craig Barret enthralls Bombay -- Octber 27, 1998

Intel joins effort to introduce multimedia to villagers

Intel shifts focus to small business in India

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