Investor's Business Daily
Pervasive Intelligence = Pervasive Intel
Friday November 29, 11:09 am ET
By James Detar
Imagine a computer network that creates itself. Its sensors then begin sniffing around on the Web, looking for other networks with which to merge. When it finds a compatible network, it hooks up in an organic fashion to form a new entity.
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This may sound like a scene from the "Terminator" movie series. But these networks aren't science fiction, says Intel Corp. (NasdaqNM:INTC - News) President Paul Otellini. They're the future of computing.
"We're now, basically, putting (computing) logic into every device we build, from microprocessors down to memory chips," Otellini said. "And ultimately we'll put radios into every device we build."
When that happens, every intelligent device will be able to talk with every other intelligent device wirelessly. The opportunities to use such technology are boundless, he says. And Intel plans to get in on the ground floor as the market takes off.
"You've created the opportunity to have self-generating networks inside the home, inside the office, outside," Otellini said. "It's everything from lighting control to security to heating."
Intel in recent years has shifted a lot of its resources to the communication device market. It's still the biggest personal computer chip company. It has about 80% market share vs. roughly 18% for No. 2 Advanced Micro Devices Inc.
Deeper, Smarter
But the PC segment's slowing. So Intel's changing its business focus.
In a couple of years, smart networks will have made deep inroads at companies and on the Web. Otellini doesn't think computer networks will invade every area of our lives, but believes they'll go pretty deep.
"I'm not necessarily a great believer in the smart refrigerator. But you get the idea. You can have that kind of pervasive intelligence that's hidden away," he said.
Some people worry about smart, talkative networks spreading too far. Privacy advocates and futurists say people might not want to always be within arm's length of the Web. They might say enough is enough and quit buying new gadgets.
Otellini sees it differently. Smart networks and the gadgets that will link wirelessly to them will be invisible to the average person. He notes that everyone in America already interacts with dozens, if not hundreds, of computer chips every day.
"I suspect there's something in the range of 50-plus microprocessors in the average car," Otellini said. "They do everything from brake controls to navigation. And they're only going to do more and more for you."
Intel will be ready as the use of chips grows, he says. "We're closing in on making 1 billion devices a year," Otellini said. "We'll reach that in a couple of years."
Intel's board named Otellini president and chief operating officer in January. The 28-year Intel veteran shares management duties with Chief Executive Craig Barrett.
Before this year, Otellini was responsible for the Intel Architecture Group. That unit designs all of the company's PC and workstation chips.
Barrett's still in charge of the overall company. But he spends a lot of his time these days on the road, out talking with industry and government leaders. Otellini makes a lot of the day-to-day decisions.
Otellini has seen Intel grow from a small company to the behemoth it is today.
"The biggest change is the scale," he said. "It was a $100 million start-up then, with one product in one market" when he joined in 1974, six years after Intel's founding. "Now we're a global enterprise in a number of different areas."
A private man, Otellini declines to talk much about his personal life. He does say he's active in education and the fine arts in the San Francisco Bay area, where he lives.
Radical Changes Ahead
He's on the board of regents of a Silicon Valley college. And he's on the board of the San Francisco Symphony. He's also active in his children's education. He spends much of his time helping raise money for the schools they attend.
Otellini prefers to discuss his vision for Intel. He sees big changes ahead as the decade unfolds. Intel will have to change radically to keep up, he says.
"If you look at Intel five years out, you will not be able to distinguish the computing and communications parts of company," Otellini said. Today those two are distinct, separate groups.
In the nearer term, he says, the tech buzzword is convergence.
"At one level, it's simply the coming together of the computing and communications industries," he said. "And of all of their products and services. That's the test of convergence."
There's a chicken-and-egg phenomenon in the wireless Web device world. To use wireless devices, consumers need hot spots. These are places like Starbucks coffee houses that have installed wireless networking nodes.
A lot of businesses are waiting for people to buy wireless devices before they set up hot spots.
Consumers, meanwhile, may be waiting for more hot spots before they buy.
"Hot spots don't get deployed as fast as they would if there were a lot of computers to take advantage," Otellini said. "Once the computers take advantage of them, hot spots start being deployed more rapidly."
Intel hopes to drive the adoption of wireless devices. Along those lines, it's working on a chip for portable computers code-named Banias.
The chip, slated to come out early next year, will include a wireless function. That will allow it to talk with networks as well as PCs and other portable devices without wires.
Intel has sold notebook chips before. But usually it just tweaks its desktop computer chips to work in portable devices. Banias will be different.
"It's the first time we've done a notebook (chip) from the bottom up," Otellini said.
