"Our Networking Focus Would Be In Basic Building Blocks"

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Dr Craig R Barrett SIZE="2" face="Arial"> has taken over as the president and CEO of Intel from the legendary

Andy Grove. The challenge before Barrett is manifold, not the least of all, establishing

Intel as a true technology company, rather than just the leading manufacturer of one

product category.

And that means building a slightly different identity

for the company and getting that message across. One of the important strategies that

Barrett is out to implement is establishing Intel as a strong force in the networking

business, where it has upset many established players in the low-end LAN segment.

Barrett explains how he plans to go further ahead in

an exclusive interview with Shyam Malhotra and Sivakumar V. Excerpts:

You have taken over as the CEO of Intel after a long

innings by Andy Grove. What is your vision and what are the differences in your outlook as

far as Intel is concerned?

I do not see any significant differences

with Andy (Grove). First of all, Andy is not out. He is still our chairman and is very

active. And having worked very closely with him for the last 10 years, I think our

thoughts are quite similar. The biggest challenge I currently face is one of growth. In

the last 10 years, we grew very rapidly, with average growth rates of over 30 percent. It

is very difficult to continue registering large growth rates when you are a big company.

And fortunately in the last quarter, we have been able to grow very well after a year and

a half, which was 1997 and most of 1998. Getting back on the growth track, both from the

revenue and the earnings standpoint, is the biggest challenge that the company faces

today.

Recently, Intel has been putting a lot more focus on

networking. What is Intel’s roadmap in this area? COLOR="#000000">

If you look at our overall vision of the

market-place, which is billions of connected computers, then the business opportunity we

have associated with that vision is components and building blocks that go into computers,

building blocks that go into networking, and the applications which will run on those

connected computers.

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You are going to have this clash of data versus voice, backbone infrastructure. Clearly data is going to win. And it is a matter of who are those companies who are going to merge at the top.

From the networking standpoint, our

particular focus would be on basic building blocks in networking like NICs on LAN and

motherboards. And all the basic things that other networking companies provide, everything

from network built on Intel processors. Thus, we will provide solutions to the home, small

office, and Small and Medium Enterprise (SME). Now, wide area in networking is something

we are not particularly interested in. There the Ciscos, the Nortels, and the Lucents

compete. You are going to have this clash of data versus voice, backbone infrastructure.

Clearly data is going to win. And it is a matter of who are those companies who are going

to merge at the top.

With Intel, it is a huge market for small,

medium-sized business, and the home for networking. And that is where all of our energy is

going. And the acquisition that we announced few weeks earlier, Shiva, which is basically

a connectivity, modem bank kind of capability. And the ability to use Internet as a

virtual private network, and software and hardware that go with that. And associated with

that, small medium, VPN types of networking. So our focus is going to be basic components,

building blocks, and then complete system solutions for SME business. I would be a

supplier of building blocks to the Ciscos and Lucents for their solutions. So, sometimes

we will compete with them, sometimes we will be a supplier to them. But that is the way

the computer industry works anyway.

So is the route that you will be taking based on

acquisitions of the kind that you have done? COLOR="#000000">

That is one of the ways of acquiring

capability. Some capability we would build it ourselves inside the company. SIZE="2" COLOR="#016077">

Which is the next company you are planning to acquire?

3Com ...

I could never figure out where those

rumors came from. Whether somebody from 3Com to hike their stock or not. First of all

Intel and 3Com compete very strongly in products like NICs. The Federal Trade Commission

would not let one company buy another without divesting itself of the capability. And as

for the rumour, Intel does not speculate on speculation. COLOR="#016077">

How does the focus on networking impact the microprocessor

business?

The businesses are complementary, if you

look at the big picture of billion connected computers. All our business processes are

associated with that image in mind. Processors, graphic chips, etc. go into the computer,

while the networking goes into building connected computers. Issues like electronic

commerce and digital imaging will play on the network. Those are the areas that are

complementary in the sense that they are consistent with the image. And they necessarily

compete with each other.

What about Intel or the Intel Inside brand in the case?

How do they gel in with the three areas?

Intel Inside is only associated with the

processor and every thing else comes under the Intel brand name. Intel is a strong enough

brand in the computer market-place to be associated with all the areas. SIZE="2" COLOR="#016077">

With Internet becoming very important, do you see the PC

losing importance to networking? What would be your strategy then? SIZE="2" COLOR="#000000">

The PC is losing importance because the

media wants something different. But yes, Internet is very important. So, any application

on Internet is very important. We are already participating in those spaces. If you look

at Internet transactions, the backbone behind those transactions, you will find huge

server installations. High performance servers everywhere. That is a big business

opportunity for Intel. Most of our focus has been on the client in the past. But as the

number of connected computers increases and all the transactions occur between them, there

is huge server construction that has to be created. It is a big business opportunity for

us. And that is why you see us push very heavily into that space. And the applications

that run on top of this connected array of clients and servers are another aspect. SIZE="2">