Most personal computers (PCs) sold in India carry a simple message: Intel Inside. But if one were to begin looking inside Intel itself a few years from now, the legend might well read: Indians Inside. The global leader in semiconductors has been around since the late 1990s. But in the last three years it has been ramping up its development teams in the country.
It has begun locating in India some of its most cutting-edge development work in fields like the next generation enterprise server processor, wireless and mobility design and switching silicon.
Members of these teams greatly add to the skills available in the country and when they interact with their peers in the industry these skills tend to spread in concentric circles.
Over time some of those in the organisation with a vision will move out and either start their own ventures or join others, thus disseminating their skills further. (This has happened in the case of Texas Instruments.) But this is not the sum total of the impact that Intel has on the Indian technology scene.
Through several key initiatives, Intel is seeking to build an eco-system in India that will help it capture and retain a leading place in the global information technology map. Other s like Texas Instruments and Hewlett-Packard are also doing this. But the sheer size and depth of Intel's initiatives make it a front-runner in this regard.
All that Intel is doing is clearly related to its own work. It makes sound business sense in terms of the company's objectives, but the difference is that Intel is financially able to think very long term.
Some of its initiatives are aimed at creating generic skills and demands. Every PC and hand-held device shipped means potential demand for Intel's products.
PC penetration is intricately linked to a country's ability to develop rapidly. So Intel's initiative to create an eco-system of knowledge and skills so as to further its business objectives gets linked with the furthering of Indian capabilities.
To create an eco-system that will aid the spread of IT in India, Intel is moving on several fronts. It is funding cutting -edge research at leading Indian centres of scientific learning. It is taking a hand in improving the scientific curriculum in not just the top rung but the next line of teaching institutions.
It is working with non-governmental organisations and state governments to improve the skills of schools and school teachers so that IT can be used more, to improve the quality of school teaching. And finally, it has invested in around a dozen Indian high tech startups whose business, it feels, is good for Intel's business.
Says Ketan Sampat, president of Intel India: "Top level academic institutions that have a strong research programme are integral to technology innovation. To do some of the most advanced thinking we are seeding research outside of Intel. Any company here, large or small, that is going to be a technology leader on a worldwide basis will need robust research eco-systems. We are definitely committed to doing our bit in nurturing a robust ecosystem in academic institutions."
Intel development teams typically work on things that are one to four or five years ahead on the horizon. But a technology leader needs to have a handle on what is to happen beyond five years.
"We are very focused on working with universities because that's where some of the most advanced thinking is on and they are probably better at thinking in an unconstrained mode than we are. Worldwide, we depend on top class universities to do that. Increasingly we are funding more of that research in India," Sampat says.
A prime example of funding futuristic research at an academic institution is the Tenet group at the Indian Institute of Technology (IIT), Chennai, which is well on the way to delivering low cost connectivity and internet access to India's rural masses. Intel is funding the Tenet group's research in the digitisation of radio.
A fundamental shift is taking place in how radios are built. In the last four or five years, instead of using capacitors, resistors and inductors and building an analog radio, researchers are seeking to acquire the signal and immediately turn it into a digital signal and do everything in the digital domain through digital signal processing. That makes possible much smaller radios, which can be applied to many uses beyond the conventional.
IIT, Mumbai, in addition to having a VLSI design lab, is working on silicon emulation. Integrated chips, which are becoming more and more complicated, are all built as one piece of standard silicon.
It is much easier to find out the problems in simulation when you are doing the design, rather than later on. So you need to innovate to find problems earlier in the design cycle. Research is also being funded at IIT, Kharagpur. "We will be doing more of that in the coming years," adds Sampat.
The other area of focus in higher education is building a strong curriculum not just in the top 10-15 institutions but also in the next layer.
"This is an important area in which I can say with some justification that Intel is definitely leading," claims Sampat. It has chosen topics like core microprocessor architecture, VLSI design, networking and communication including wireless, e-business and supply chain management to take a lead in curriculum development.
Professors from top institutions like Indian Institute of Science, Bangalore, senior Intel technologists and professors from the next layer of institutions like the regional engineering colleges take up a particular area and ask: `What is the state of curriculum in the top 60-100 institutions? What does it need to be, given the kind of workforce companies like Intel will need?'
All this is determined, changes in the curriculum defined, and steps taken to ensure that labs in the institutions are suitably upgraded and appropriate textbooks become available.
"The idea is we are here to stay for a very very long time. We should get graduates who are being trained in the state of the art. But the benefit goes far beyond that. The whole country, all the other companies benefit. We have participation from other IT companies, but from what I know, I haven't seen such a structured and dedicated effort from other companies," Sampat says.
Another area for Intel is working with the school system. It has a very active kindergarten to 12th standard education programme. It has trained over 2.7 lakh teachers on how to use PCs, the internet and technology in general to bring about a more interesting and involved way of teaching children.
"As a result we think we have touched the lives of one crore students, mostly in 20,000 government schools. We have memoranda of understanding with 13 state governments, adds Sampat.
Still, the most commercial aspect of Intel's work in building an eco-system is by acting as a venture capitalist and investing in startups.
Sampat asserts: "We are the number one corporate venture capitalist in the country. We are always on the lookout for the next set of smart, energetic entrepreneurs who are going to complement our direction and hopefully bring about the big monumental technology shift."
Says Kumar Shiralagi, director at Intel Capital (the investment arm of the company) for strategic investment in South Asia: "We help to build the local ecosystem and also help local companies access the world ecosystem that is being built. We seek to be part of the early stage product stories that India has the potential to come up with. We invest for other reasons also, like if there is a great technology out there. It takes most new technologies some time, maybe 2-3 years, to mature." So Intel's investment nurtures them through this period.
Intel needs to build an ecosystem for its products like the wireless enabled Centrino laptop. The company basically just makes the processor "� not the applications, the rest of the hardware, tools, and management software needed for a product to be successful.
It looks worldwide to see where the gaps are and makes appropriate investments to fill the gaps so that its processors get used and succeed in the marketplace. Indian strength is in software and there are companies that have the ability to come up with solutions for a particular product.
In its investment philosophy, Intel looks for two things: strategic fit and a financial fit. The strategic fit is the more important of the two. It invests in companies that have a similar view on where the market is going, the kind of technology roadmap needed to make the market go there and whose products and services are complementary to Intel's.
A good example of that would be its investment in Sasken. "We have designed silicon for high-end cellphones, smart phones. Sasken does work in global system for mobile (GSM) general packet radio switching (GPRS) communication protocol stacks. This is very complementary to our silicon roadmap."
In India Intel does not have a lot of advanced technology partners but wherever an opportunity turns up, it invests. In the Silicon Valley tradition, there are startups that work with each other, with larger companies and together they bring about monumental technology shifts.
Adds Sampat: "We are good at some things but to bring about these monumental technology shifts, we need other players. So we are bringing that same kind of philosophy to our investments in India."
Says Rajiv Mody, chairman and CEO of Sasken: "Intel is extremely clear about its investments. It invests in companies in which some Intel business group is interested. The eco-system consists of whoever uses its processor power which is driven by newer applications and ideas. The company which gets the investment also gets access to Intel's market information, road map and plugs into the overall ecosystem."
Intel arranges periodic meetings for its portfolio companies where these CEOs mingle, form partnerships and get a glimpse of Intel's and other industry companies' minds. This leads to technology collaboration and skills development.
Shiralagi says: "Currently India is on such a hot list that all our portfolio companies want to leverage India, both the local talent and the Indian market. Last month we had the Intel Technology Day where we brought together 11-12 of our portfolio companies from all over the world and introduce them to the big carriers in India. So they made a pitch that these are the solutions we provide. Our presence all over the world puts us in a unique position to help companies in this way. We do the same thing in China."
Another example of investing in a public company is Subex. As the telecom boom continues, Subex's telecom fraud management software is expected to do well.
The second aspect is that there is a clear shift in terms of enterprise and telecom company computing from mainframe and legacy architecture to high volume Intel architecture because of big economies of scale.
Adds Sampat: "We have an interest to bring them to our platform and proliferate our platform. They are also in a growth business and if they do well, which we expect, it is good for our growth and the growth of Intel architecture in the telephone business."
Subhas Menon, chairman of Subex, affirms that "Intel facilitates an eco-system by nurturing companies through funding, access to its labs and technologies. It also provides sales and marketing support, networking opportunities and conducts joint promotions. All these, coupled with innovative technology enabling high levels of performance at low total cost of ownership, makes Intel an excellent partner to companies like Subex."
Further afield, Intel has invested in a small company called Career Launcher that develops educational software. Educational content and software are the key to PCs being used more widely in the Indian market and this as a good area of investment. Career Launcher educational products are shipped with many PCs, making PCs more attractive.
Adds Shiralagi: "Education is a big theme and we are looking at a few education- related companies that can come up with products that make it attractive for people to come up to speed on technology."
Intel has also invested in the BPO space, in Nipuna, a subsidiary of Satyam, as it would like to understand the technology needs of the sector.
So the net is spread far and wide, not just in technology development but things that will create a demand for Intel's basic technology. In the process, India is a gainer.
