‘Business will drive multimedia’

Always a galvanizing speaker, Intel Corp. president Andy Grove minced no words as the opening speaker of Digital World ‘92.

The so-called “convergence,” Grove said, is driven by nothing more lofty than fear and greed. “With all the hoopla lately … we’re worried that we’re going to miss out on the ‘next big thing,’” he said. “All [these industries] are experiencing slower growth than their appetites desire. All are fighting for markets, looking hungrily, greedily, at each other’s turf. Looked at this way, ‘convergence’ looks very different.”

Instead, Grove believes convergence will happen when someone solves a compelling user need in the business world — where Intel operates as top dog in the PC market, with by far the largest installed base — not in the consumer marketplace.

Grove believes this compelling need is for faster and better information, and “[businesses] will pay through the nose” for it because it will ensure their survival. Business communication tools such as electronic mail, and especially video teleconferencing, best fit the bill.

Intel and other vendors are eyeing the video conferencing business as a huge potential market. Grove said the business community has been spending “a bundle” on such systems — in 1988, only $110 million, but just shy of $500 million in 1991. So of course, from where he sits, video teleconferencing is the best (and in his view, the only) application that will force a convergence upon digital media.

No surprise. This isn’t surprising: Intel manufactures DVI, or digital video interactive — a set of programmable chips that is likely to end up as standard equipment on future generations of computers.

‘INTEL HAS ALREADY SPENT $800 MILLION IN RESEARCH AND DEVELOPMENT ON THE PC PLATFORM’

During his presentation, Grove showed clips of video conferencing software developed at Intel. As with all such systems today, the slower frame rate and low quality of most video conferencing systems aren’t good enough to watch a movie — a definite requirement for the consumer market — but Grove said they are “adequate” for business communications.

Though Grove wouldn’t commit to specifics about Intel’s involvement in delivering such a product, he claimed it “should come as an upgrade or an application like video cards or network adapters in the near future.” He also wouldn’t comment on questions about when DVI and/or graphics acceleration would be built into the design of Intel’s microprocessors, though such additions have been the subject of industry speculation for months.

Standard anti-consumer argument. One would expect Grove to dismiss consumer multimedia as an oxymoron, which he does. He cites all the usual reasons: there isn’t enough content, there’s not a standard player, the quality of digital video isn’t sufficiently high, etc.

Instead, he proposed that while the quality and quantity of consumer multimedia is building momentum, a “real-life convergence” is already taking place on what he called “the most capable and economically feasible platform,” the Intel-based PC, driven by the needs and problems of the business world.

Intel, he says, has already spent $800 million in research and development on the PC platform’s past and upcoming generations of silicon technology. Some 20 million ‘486 processors are manufactured every year. “This is the foundation that’s already in place,” he says. “As it progresses forward, the ‘plain old PC’ will become more powerful and more ubiquitous. It’s hard to imagine a more fertile infrastructure to solve the kind of problems we’re talking about.”

Installed base, or replacement machines? Though Grove asserted his belief that all ‘386-based PCs with VGA graphics “are capable of doing” the kind of desktop videoconferencing applications he showed, he acknowledged that the company’s next level of technology, the P5 processor, will be even more suitable.

When we asked if this kind of application might drive businesses to large-scale replacement of their existing computers, Grove replied, “That’s what I hope.” Thus in some ways, Grove contradicts his own argument that the existing foundation of 100 million PCs is the best reason to consider it “the” convergence platform. What he wants, as does everyone in the commodity hardware business, is for customers to feel compelled to buy new products to get at these new capabilities.

Denise Caruso