Barrett: Good business models vary widely

Peer-to-peer (P2P) sharing would never have gathered momentum if the music industry had adopted models for distribution over the Internet, said Intel Chief Executive Officer Craig Barrett, addressing IT executives in India Friday.

"The music industry absolutely stonewalled the distribution method associated with the Internet to the point that peer-to-peer sharing became so prevalent, that it didn't make much difference," Barrett said.

"Five to eight years too late we are starting to see distribution models set up for distributing music over the Internet, where actually somebody gets paid for it," he said. "People are inherently honest and want to pay for goods and services and that would have happened if the music industry had adopted the technology and come up with commercial distribution models a lot earlier."

The film industry faces a similar challenge as bandwidth increases enable downloading movies over the Internet. "It would be interesting to watch whether the movie industry will in fact rapidly and aggressively adopt a distribution model consistent with the new technology," he said.

Slated to talk on corporate governance at the event hosted by the Delhi-based National Association of Software and Service Companies (NASSCOM), Barrett also spoke at length on the variety of business models companies can adopt to be successful.

A number of companies have benefited by changing the rules, said Barrett, citing retailer Wal-Mart Stores and Dell, which sells configured-to-order computers direct to customers. Wal-Mart uses IT to control inventory and point-of-sale information, to know exactly what is selling at any of its locations, how to price a product, how to price it by region, and how to replenish inventory automatically.

"Wal-Mart is really an IT company in disguise," Barrett said. "They just happen to sell products to the consumer."

Intel changed the rules to its advantage using four key strategies, according to Barrett. These included its "Intel Inside" branding program, shifting the definition of computer architecture from computer makers to companies like Intel, creating a new distribution channel of about 180,000 system integrators that build computers with Intel technology, and setting up a venture capital business that invested in companies with technologies supporting or compatible with Intel's own technologies.

"There are very few ingredient brands that have been successful," said Barrett, referring to the company's "Intel Inside" branding.

As computer devices got more sophisticated, packed with more functionality, Intel had a greater impact on the definition of computer architecture so that computer manufacturers did less research and development (R&D) in computer architecture, Barrett said. "We decided to use that to our advantage, and we decided we would foot the bill to do the R&D, we would create new architectures, and then we would give our customers that research and development information free of charge so they would use our latest products for their next generation of computer architectures," Barrett added.

Along the way, there were a number of startups with new technologies that could have posed a challenge to Intel. Barrett gave the example of Transmeta, which designed a microprocessor with a software-based approach to processing instructions that could compete with Intel in the low-power, mobile market.

"They were not particularly successful, for one, because they did not execute particularly well, and also Intel recognized what was happening, and responded quickly enough," Barrett said.

Touching on new rules of corporate governance and accountability in the U.S., including the Sarbanes-Oxley Act, Barrett said that he believes most companies are professional and honest and new regulations led companies to focus their resources on compliance, rather than on creativity and innovation.

"The U.S. political system instituted a number of rules and regulations, and perhaps the best way to describe these is that they try to legislate integrity, morality, professionalism, and behavior in a legal fashion in the corporate business world," Barrett said. "I think that the great majority of U.S. corporations were already doing all of those things, but the politicians in their wisdom have put an infinite burden of proof on everyone."

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

John Ribeiro

IDG News Service
Show Comments

Cool Tech

Toys for Boys

Family Friendly

Stocking Stuffer

SmartLens - Clip on Phone Camera Lens Set of 3

Learn more >

Christmas Gift Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Aysha Strobbe

Microsoft Office 365/HP Spectre x360

Microsoft Office continues to make a student’s life that little bit easier by offering reliable, easy to use, time-saving functionality, while continuing to develop new features that further enhance what is already a formidable collection of applications

Michael Hargreaves

Microsoft Office 365/Dell XPS 15 2-in-1

I’d recommend a Dell XPS 15 2-in-1 and the new Windows 10 to anyone who needs to get serious work done (before you kick back on your couch with your favourite Netflix show.)

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?