Keep spending, says Intel president

Companies must continue to spend on technology or risk losing their business edge, Intel's president and chief executive, Craig...

Companies must continue to spend on technology or risk losing their business edge, Intel's president and chief executive, Craig Barrett, told the Gartner Symposium/ITxpo in Florida.

Intel's approach in a recession, Barrett said, was to continue to invest. This year the company is spending £2.8bn on research and development, and spending more than £5bn on new manufacturing capacity.

"Our attitude has been to continue to innovate, invest and look to the future," Barrett said.

Downturns in the economy - and in the IT sector in particular - are cyclical, he said. To remain competitive when the turmoil ends, companies must not cut back on their spending in hard times.

Intel has put itself in a position to deliver better products at a lower cost that customers are more likely to find appealing and buy. "The end-user gets more for their dollar," Barrett added.

Intel has managed to improve its business efficiency by using the Internet to conduct its operations. The company has created an "e-business" group separate from its IT department, with the goal of moving all operations to the Internet, Barrett said. The company now uses the Internet to conduct about 95% of its business operations, he added.

Barrett dismissed suggestions that Intel and other IT vendors pressurised customers into spending more money than necessary and upgrading their products too quickly.

Waiting over three years to replace PCs is a risky decision, Barrett said, because of the differences in performance between the leading-edge PC of three years ago and today's leading-edge PC.

Barrett also reiterated Intel's commitment to plans to scale its processors up to compete in the Unix server arena, confident that it could deliver low-cost yet reliable chips in high volume, as it has done for years in the PC market. Intel is proposing that the way to achieve supercomputing power is via "incremental server building blocks" instead of with single hulking mainframes or high-end Unix boxes.

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