"Our primary interest is in what is happening in India"

Leslie L. Vadasz, 64, was one of the founders of Intel Corporation in 1968. As a member of the board and head of Intel Capital, Vadasz last year spent $1 billion in venture funding to small companies that develop technologies for the internet. Interestingly, of the $300 million that Intel Capital has invested so far in Asia, nearly a third has been in India. Vadasz spoke to BT's Ashutosh Sinha about venture funding, technology, and the future.

BT: When you see the Asian internet infrastructure, particularly India's, there is a chance that India can bypass the internet as we know it and get on to the broadband network. In such a situation, how is Intel Capital investing in companies that have to focus on both technologies---those that help access internet through cable and the broadband network?

Vadasz: Broadband is a very important phenomenon, a very important technology. We would like to accelerate it as fast as possible. But, realistically, if I take a global view, most of the access to the internet for a long time to come is going to be via narrow band. I think that in some countries, it is possible that broadband will come faster. In the case of India, you have much more number of cable televisions installed than telephones. So, there is a chance that if proper things happen, broadband deployment is possible. So, we are interested in that trend. You know, broadband is important. But the number one thing is to have the internet connection. I don't care whether it is broadband or spaghetti. If spaghetti will help me transfer data, it would be fine with me. But no question on broadband. Ideally, we would like to see everyone on broadband, so that you get the full capability of the internet.

Intel has made an investment in a company that is in the content business. Are you concentrating on companies that make access technologies?

Not really that much. You know, the content sometimes really pushes the need for higher capacity network. Sometimes, we do invest in some compelling content, which does best on broadband. Just to show what can be done. It is really infrastructure and some of the services and applications that run on top of the infrastructure.

So, the next logical step could, perhaps, be in investing in some access technology companies, that develop technologies that drive the broadband market?

In fact, we do have an investment in a company (Banyan Networks) that is doing (work on) DSL access.

So, would you be looking at investing in more such companies?

That's right. That's right. We have been investing not just in client-server, but also in network related technologies.

If we compare India with the other Asian countries, if we take a pan- Asia view, how much of Intel's investments would India be getting?

We invested last year over $1 billion worldwide. A little over 30 per cent of that investment was outside the US. The Asia-Pacific area is about 15 per cent of our total investments last year. So, that is a fairly significant amount that we have invested in the Asia-Pacific area. We must have invested over $300 cumulatively in Asia and are rapidly progressing towards $100 million in India alone. So, it is a significant part of our total interests.

Do you foresee a situation where an Indian company could partner Intel at the global level?

It may be, but that will be an extra. Our primary interest is what is happening here. There are, on the other hand, many companies that are good technology companies that may have technology that is worldwide around us.

There is a little downside to investing in technology companies. You never know which of the competing technology will click and make it big...

That is the beauty of the technology business: there is always another round.

So, how do you ensure that if you are investing in a particular technology, it is not overtaken by other technologies?

Well, some of them will. Venture investment means putting your money at risk. And some of our investment does not work.

Like?

My favourite story is the most expensive T-shirt that I have ever had cost around $750,000. We invested this money in a company and all I got in return was a T-shirt and a cap. And that company went out of business. It was called American Cybercast. So, these kinds of things happen. The important thing is that, on the whole, the internet is a major transformation technology and that there are many transformation technologies that are there to create this capability. We will continue to invest in creating that capability and that is a longer-term happening. It is not going to happen overnight.

Can you give an example of how you have hedged your bet in the case of a particular kind of technology?

In the case of DSL, we have invested in a number of technologies in companies in the US which pursue different portions of DSL. Now it turns out that all of them are doing quite well. But when you say DSL, it is a fairly broad area of engagement. People concentrate on client devices, on the access site sometimes it is the voice interests and on and on. So, we will invest in more than one company.

With AMD nibbling into your marketshare, and the race for clock-speed hotting up, what kind of technologies is Intel Capital investing in to keep ahead in the race?

Clock-speed is the least important of the total picture. It does not even determine the speed of the machine. An example of how we hedge our business is the 64-bit architecture, the Itanium processor. We created a special investment fund for the 64-bit architecture. We have invested in a number of software companies, which bring the necessary software for the new architecture. Some of these are existing companies. So, by the time the machine is out in the market, we will have a large number of software able to run on the machines as well. Obviously, the reason for that is the deployment of the new architecture in the market. We do this kind of thing over and over again in many of our product lines. We are coming up with a new product line and we look for complementary capabilities that exist in the market to get a faster momentum for the product line. That's what we do.

In the next few years, we will be seeing a lot more devices that require little processing power (or thin client devices). How are Intel's investments addressing that market?

First of all, we acquired a company called DSP Communication. They have the voice technology capability for handsets like CDMA (Code Division Multiple Access) and others. Second, we have had a long-term relationship with all the major handset manufacturers since we supply the flash memory for their handsets. Third, we have the architecture called x-scale, which is a very fast, very low-powered CPU architecture. And fourth, we have DSP (Digital Signal Processor) coming into our line from another relationship that we made. Fifth, we are investing in a number of companies that have either the software or technology that we can add to our product lines to be a broad capability supplier to the market. As you know, we were not in that market earlier. But now that it is moving towards internet access, we think we know more about internet access than anyone else, since most people still access the internet through PCs.

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