Intel Is Putting Its Chips on the Net

We get technology. We make it, and we use it. We produce the basic building blocks for new technology and then wind up using those products almost instantaneously. Eating our own dog food means that we have to stay on the cutting edge of what's out there. We almost couldn't help becoming an Internet company.

And the fact that we're part of the computer industry -- which has one of the fastest technology-turnover rates of all manufacturing industries -- means that we understand speed. It wasn't much of a stretch for us to embrace a technology that helps us communicate more rapidly. The Internet simply fills a driving need that we've always had to move faster.

In what ways has the Internet changed how people communicate within Intel?

The Internet is an adhesive that bonds employees to each other and that bonds various parts of a corporation together. Nothing supersedes face-to-face contact. But being able to communicate instantaneously certainly makes an organization more cohesive -- and also a lot more productive. As a corporation gets bigger and bigger, you need to do everything that you can to make it seem smaller and smaller. That's a challenge. Many of us joined Intel when it had just 1,000 employees or even just 100 employees. But now we have more than 85,000 people, and many of our divisions are spread across multiple sites. Those people must use the Internet to communicate, or they'll go crazy.

How does being an Internet company affect the way Intel relates to the outside world?

The best deliverable to date has come in the area of customer service. Customers can now access information that's relevant to their company from anywhere and at any time. In fact, about one-fourth of all transactions on our systems are done by customers after business hours. The design engineers who now get their specification documents from us online, rather than through in-person delivery, say that using the Internet has cut one to three weeks off their design cycle. And for us, the Internet has done what it's supposed to do: It has cut error rates, and it has sped up the time between order placement and action in a factory.

Using the Internet has strengthened relationships, because our dialogue with customers and partners is now much deeper, and takes place much faster, than before. And I don't think that it's any less personal. Quite the opposite: E-commerce technology facilitates communication for us in the same way that email helps people stay close in personal relationships.

Have customers and partners embraced what you're doing on the Net?

We thought that some of our Asian customers would be a little slow. But they actually adapted more rapidly than their U.S. counterparts. We had people who went in to educate those Asian customers: "This is how we're going to communicate with you. These are the protocols." And within a few months, some of these customers were suggesting improvements to our user interface! We went to 100% e-business very early on in Asia -- much faster than we did in the United States.

These customers saw the advantages of this tool very quickly, because they live on the edge of this whole industry. They're here today, gone tomorrow. If they don't get orders, they go out of business. Time-to-money is everything for them. Many of them don't have brands. So they tend to value time-to-market and cash flow more than many other companies do.

Can company leaders get away with just dabbling in the Internet?

I don't think that people have any choice about this. People didn't have any choice when the telephone came along -- not if they really wanted to be competitive. Especially in the international marketplace, if you don't have this capability, you're simply not going to be competitive.

Andy Grove has said (and I agree with him) that in five years, there won't be any Internet companies; there will just be companies. We can argue about how many dotcom companies are going to be around in the future. We can argue about when those companies are going to make money. But we're not going to argue about whether Intel -- or Cisco or Dell or GE -- is going to become a 100% e-business. We're simply going to do it and save billions of dollars in the process.

How has the Internet changed your job?

The role of a CEO is to decide which businesses the company will be in, which business plans it will follow, and how it will remain competitive in the market. The Internet can help a CEO make those decisions. But I don't think that it has dramatically changed things. We get information faster today -- that's all. Information used to be available in the newspaper, then it was available by fax, and now it's available online.