Barrett: Innovation Is Key To RecoveryBarrett: Innovation Is Key To Recovery

SAN FRANCISCO--Intel CEO Craig Barrett told developers Monday that the way to break out of the recession is to build products that excite consumers enough to open their wallets. In his keynote speech at the Intel Developer Forum, Barrett said he was confident the high-tech industry would soon recover and experience sustainable growth following "the worst recession the technology industry has seen in a lifetime." His optimism is based on the business opportunities available in building out the Internet, which he sees as a convergence of computing and communications. "We have to innovate our way out of this economy," he said.

Barrett said consumers need devices to access the Internet, better networking equipment, and faster and more scalable servers to run more robust software. At the heart of the innovation, in Barrett's view, is a more powerful chip from Intel to provide the processing power for all the audio, video, and other information that will flow through the Internet. Intel on Monday launched a family of server chips that the company says could run most software as much as 30% faster (see Intel Launches Server Chip).

Technology areas that Barrett believes present the best opportunities for revenue growth are security, broadband, Web services, and wireless. "These are four of the areas in which we can work together to get the end user more capabilities and more excited," he said. As the Internet evolves, companies and consumers will want better security to protect information; higher bandwidth for entertainment and gaming; hardware running applications that can be offered as services on the Web; and wireless devices and infrastructure for anytime, anywhere connectivity.

Because much of the world outside the United States is not connected to the Internet, Barrett sees huge sales opportunities in countries such as China and India where adoption is still low. Today, 70% of Intel's revenue is "non-U.S. based," Barrett said. "I expect to see that grow."

Barrett identified three trends: computing segmentation, open standards, and modularity. In the first, Barrett sees a proliferation of Internet devices, including PDAs, cell phones, laptops, and desktops that need software and infrastructure to meet their unique requirements. The second trend, open standards, would continue to evolve as customers move away from proprietary technology and give rise to the third trend, modularity, which refers to the development of hardware and software that can be connected like blocks to build a computing system.

Demonstrations during the keynote focused on power-intensive, computer-generated 3-D videos. The first demo was of Barrett appearing to ride along the top of a San Francisco railcar on a snowboard. The digital movie was created with tools from Realviz SA. In the second demo, multiple 3-D video streams were displayed simultaneously on a PC running Intel's new Xeon chip. The digital feed was running over a 100-Mbyte line, far faster than cable or digital subscriber lines used in homes.

The bursting of the dot-com bubble has left the high-tech industry in a state of "turbulence" after several years of "irrational exuberance" caused by people overpromising and underdelivering on technology, Barrett said. However, the Internet isn't going away, and he encouraged companies to continue investing: "Transition is where you gain or lose market share."