INFOTECH
The Chips Are Not Down
So much for political instability. Intel Corp intends to go right ahead with its
elaborate plans for India.
OSWALD PEREIRA
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ARE transnational corporations (TNCs) doing a rethink on their India strategy because of the
current political instability? At least one of the two corporations that control the world's infotech
business says it is committed to its plans for India, unhampered by the fluid political scenario.
If Microsoft Corporation has a stranglehold on the software that makes PCs run across the world,
the Santa Clara, California-based Intel Corporation (1995 turnover: $16.2 billion), manufactures
the vast majority of microprocessor chips that form the heart of the personal computer.
"The Indian infotech industry will
use $100 million worth of Intel
products in 1996. By 2000, it will
be $500 million." Atul Vijaykar
Country manager, Intel
Intel is more bullish on India than ever before.
Though the company set up its first office in
Bangalore in 1988, it has upped its stakes in the
country only in the past one year, says Atul
Vijaykar, Intel India's country manager. And the
chipmaker's reading of the present state of the
Indian economy would surely bring cheer
to the Congress, trounced in the 11th Lok Sabha elections. Says Vijaykar: "When Intel came into
India eight years ago, our assessment was that the Indian economy was not ready for take-off.
But in the last couple of years, economic growth has been sustained, prompting Intel to ramp up
its India plans."
But what about the current fluid status of Indian polity? Says Vijaykar: "If a change in government
causes a slowdown in economic reforms, we would view it only as part of the ups and downs
witnessed in any growing economy. Intel, which is in India for the long haul, is bullish about the
country's information technology market." In China, too, business has its highs and lows but the
country holds top position in Intel's Asia-Pacific focus, he points out.
Is the company, which sparked off the personal computer revolution when it invented the
microprocessor in 1971, thus slashing the size of computers manifold, unduly optimistic about
India or merely mouthing economic diplomacy? Well, given the projected boom in the Indian
infotech industry, probably any IT giant would consider India a risk worth taking after all, say
observers. As Vijaykar predicts, Indian personal computer sales are expected to rise tenfold, from
4,00,000 in 1995 to 4 million by 2000 AD. And keeping this huge market size in mind, Intel has
visualised a five-year long mission.
"The Indian information technology industry is expected to consume $100 million (Rs 354 crore)
worth of Intel building blocks—Intel products that go into the manufacture of PCs, like
microprocessors, chip-sets, motherboards, networking and communication products—in the
calendar year 1996, up from $65 million (Rs 230 crore) in 1995," says Vijaykar. "By 2000 AD,
Indian IT companies would buy up to $500 million (Rs 1,767.5 crore) worth of them."
He discloses that the company is investing between $6 million and $10 million (Rs 21.2 crore
and Rs 35.4 crore) this year on a series of programmes to develop the Indian IT market by raising
awareness about the benefits of adopting latest information technologies. Next year, this
investment, not directly related to sales of Intel products as such, will be doubled. Being the world
leader in microprocessors, Intel wants to play the role of catalyst in accelerating the growth of the
Indian IT market. Towards this goal, the company has launched an extensive programme to
provide Indian information technology users, educators and schoolchildren, as well as industry
with broader access to computers, communication technologies and tools. The programme aims
to increase technology awareness among the general public, as well as strengthen local
technology companies' expertise to develop solutions for the Indian computer market.
In conjunction with the National Council of Science Museums, Intel will set up learning centres at
India’s most popular science museums, providing easy access to multimedia computers based on
Intel’s Pentium processor chips. The first of these centres, called Cyberskool, was opened on
May 3 at the National Science Centre, New Delhi. A second one will be set up at Nehru Science
Centre in Bombay, later this year.
For graduate-level computer science students, Intel has set up a lab at the Indian Institute of
Technology, Bombay. The lab is equipped with state-of-the-art Pentium processor-based
workstations and servers, networked with ProShare desktop personal video-conferencing. A
similar lab is under development in IIT, Delhi. The aim is to make leading edge technology
available to academics and promote research and development. Intel is also working with NIIT
and Aptech to provide training material and assistance. By establishing the Intel Technology
Centre in Bangalore, Intel will work with software developers, technologists and academia to
transfer computer expertise.
Vijaykar explains that while these initiatives are not aimed at directly marketing Intel products,
the spin-off would definitely strengthen the Intel brand name in India. Currently, India ranks third
among emerging markets on Intel's priority list, after China and Brazil.
The secret of Intel's two-and-half-decade-long domination of the global computer chip industry
has been the company's ability to produce faster microprocessors ahead of competitors, the
latest being the Pentium series. Intel founder Gordon E. Moore had stated that computing power
of microprocessors would keep doubling every 18 months. His company has proved this
prediction, now known in the global infotech industry as "Moore's Law", right every time, in fact,
often beating the 18-month deadline. This year, 75 million PCs are expected to be sold
worldwide. It is being estimated that 90 per cent of computers shipped around the world will carry
the "Intel inside" sign, that is, they will be based on Intel microprocessors. Its only distant
competitor is Motorola, which supplied microprocessors for Apple machines, while Intel built its
empire by being supplier to IBM. A re-alignment a few years ago saw Motorola tie up with Apple
and IBM to create PowerPC, Pentium's only rival, but as yet far behind in sales.
And as every third or fourth person in Intel's design and engineering teams is an Indian, both the
Bharatiya Janata Party's Swadeshi brigade and the National Front-Left Front's anti-transnationals
army may not nurse any animosity towards the computer chip leader. Hopefully.