Two important themes emerged from last week's European Technology Roundtable Exhibition in Seville, Spain. The ETRE conference, hosted by Alex Vieux and his company Dasar, brings together over 600 technology CEOs and journalists from around the world to a different European city each year.
The first theme was included in a much-needed pep talk by Intel CEO Craig Barrett, who counseled that companies must continue to fund innovation that appeals to customers, and "not pursue technology for technology's sake."
The second theme was articulated in a fire-side chat with Broadview CEO (and Red Herring board member) Paul Deninger, conducted by Mr. Vieux. "VCs and entrepreneurs need to sit down and come to terms with realistic valuations, and quit trying to prop them up with liquidation preferences and other tricks that just cover up reality," Mr. Deninger said.
Both opinions are dead on, in my opinion. This week I will talk about Mr. Barrett's remarks, and next week I will touch on what Mr. Deninger had to say.
In spite of the fact that the IT industry has been taking a licking, Mr. Barrett was very bullish about the future of the industry. "If you have been reading the newspapers, you would have thought the PC industry has died six times already," he boomed. "All I know is that our customers used PCs to buy over $25 billion worth of Intel products, and we used PCs to order over $10 billion worth of goods from our suppliers."
He further said that the convergence of computers and communication devices that we have been betting on for the past ten years is finally coming into play. "By Christmas 2003, most communications devices will also be computers, and most computers will also serve as communication devices," Mr. Barrett predicted. He attributed this to the fact that voice over IP is finally being built into computer networks, and that wireless technology and broadband applications is spreading.
"By the time the current generation graduates from college and joins the workforce, they are going to expect a wireless workspace," he predicted. "We are moving into an always-on world, where TVs, PCs, and pocket devices will all talk to each other and work together seamlessly."
His final and most important piece of advice is for entrepreneurs and executives to get out and observe how technology is being used and develop a sense of where the real opportunities exist. And Mr. Barrett has been practicing what he preaches: Since taking on the top job at Intel in 1998, he has visited over 30 countries. "On this current trip I have seen how Russians use technology to run their railways, and the Arab countries use PCs in their oil explorations," he said.
"I have never been more optimistic about the technology industries," Mr. Barrett concluded.
And how about Intel's markets in particular? (A good question, on the heels of disappointing numbers for the company's last quarter.) "I see the consumer electronics market turning around in the first quarter of 2003," he predicted bullishly. "However, the telco turnaround won't be happening until 2004, I am afraid," he said. Fair enough.