TotalCIO

Nov 7 2008   12:31PM GMT

Technology and the economic downturn: Intel’s CEO weighs in

Rachel Lebeaux Rachel Lebeaux Profile: Rachel Lebeaux

Interesting interview from Time magazine this week with Intel president and CEO Paul Otellini, discussing to what extent technology will suffer in this economic downturn. I liked it for its broad assessment of technology from both an enterprise and consumer perspective. Some highlights:

Otellini: “Whether it’s for work or entertainment or resume creation, computers have become an indispensable tool in the daily lives of over a billion people, and there are another billion people who are going to buy them in the next few years, so that’s a different dynamic than we had in the past.”

This came during a discussion of whether people will stop buying computers during bad financial times. The reporter pointed out that he has a BlackBerry (presumably indicating that he could access the Internet without a desktop or laptop), but Otellini laughed and wished him luck on writing a full story using a BlackBerry. He has a point. I love my iPhone and will often use it to check my email and read news online even when another computer is available. But type a full story on it, or take full notes on it while attending a conference? Forget it. (Hint, hint, Apple: A copy-and-paste function would be much appreciated.)

But how will the economic downturn affect the financial services sector, a huge consumer of technology? You’d think the financial crisis would have an impact but, apparently, Otellini doesn’t think so:

Otellini: “Financial services, before the meltdown, represented about 15% of our server business; servers represent about 20% of our [total] business — so it’s not significant overall. And it won’t go to zero — everything I’m reading points to more, not less, regulation. That stuff is going to require tracking software. Sarbanes-Oxley led to significantly more IT spending.”

Otellini makes a good point. Although many companies are laying off employees — or shutting down entirely — those that continue to do business must be even more diligent about adhering to local and federal compliance guidelines. Nothing says bad PR — and the loss of vital customers — like facing a good old-fashioned data breach or being publicly cited and slapped with a fine for noncompliance.

Now, for a bright spot, from Otellini’s perspective:

Otellini: “The big growth driver over the last couple of years has been notebooks, and that’s not changing. There’s a shift from desktops to notebooks, and a shift within notebooks to come down in price as volume expands. Both of those trends are very good for us. We have entered a new class of notebook machines called netbooks, which are small machines with 10-inch screens. You don’t use them for content creation, but they are great for simple things like surfing the Net and email. And they’re taking off. They’re at great price points, so you see this situation where people that couldn’t afford computers before are buying them — and as prices come down, that’s just going to continue.”

Yesterday, I read this Boston Globe article on netbooks; for those really feeling the credit crunch, but who don’t have the money for a souped-up new computer, they sound like an excellent option. Now, is the netbook something a CIO is going to consider deploying to his or her staff? Probably not — business needs dictate the power associated with higher-price models. But it’s always important to be aware of consumer buying trends and consider how those patterns affect how you do business. And, while you’re looking into it, it might not be a bad idea to invest in a few netbooks and keep them handy for yourself and your staff, for trips out of the office when you won’t need to use all the features on your larger, bulkier laptop.

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