Q1 : Please could you present yourself and give us the reason why you are here at Milia ? 

PO : I'm Paul Otellini with Intel, I'm an Executive Vice President of the compagny and I'm here to deliver a keynote speech on Arts and Technlogy.

Q2 : Could you please tell us what is the breakthrough on Art and Technology today, february 1998?

PO : It's not so much of a day to day breakthrough as much as the fact that personnal computer has now reached a level of capability that allows opening up new markets in terms of visual computing.

Q3 : What are thoses new markets ?

PO : Those new markets are in the area of contents, in the area of Electronic Commerce, in the area of  creating new types of game, of learning paradygmes, in terms of entertainments or in terms of work place, in terms of new types of capabilities in software to be able to allow more productivity in the office.

Q4 : As far as graphics expectations, we see emerging the DVD-ROM format versus the CD-ROM format. What is your position about it. Is CD-ROM going to be replaced by DVD ?

PO : I think so. I think it's very analogous to the CD explosion in the mid 1990's where the costs kept coming down faster and faster to where all of a sudden they were incoporated into every personnal computer, which launch the multimedia explosion. The DVD drive costs today are around 300 US$ which is 3 or 4 times more expensive than the best of  the CD-ROMs. The DVD prices are going to drop to well under 100$ over the course of 1998, making them irresistible in terms of Multimedia computer. It won't cost essentially anything more to put in, a DVD drive and all the capability you get vis-à-vis CD-Rom drives.

Q5 : ... Dropping down to ...

PO : ... under 100 $

Q6 : Could you please explain what is the plus of DVD-Rom

PO : The biggest plus is from the storage stand point about 5 to 6 times the storage of a standard CD-Rom. So you can put a lot more data on a CD, so  the multi CD games can now be done on one CD, encyclopedias can now be done on one DVD... 
The second thing is that that capability allows you to build in a lot more interactivity. For example, there are DVD drives today for movies, and they play the movie in a rather linear fashion; maybe you'll have a different cut, a director's cut, or a different language capability or a children version, but not really much more than that. 
That same disc into a computer can bring for us what we call enhanced DVD capabilities to allow a much more interactive capability with the content, either on the drive itself or vis-à-vis the Internet.

Q7 : DVD-Rom and the Internet, how do you related the two medias ?

PO : In general, using fixed storage media, whether CD or DVD(-Rom), and the Internet as suplemented, what we call hybrid application, it allows you to have the historical storage on the drive when you buy the Rom, but you can get increasingly current information by accessing the contents of developpers sites on the Internet. You can get update to your encyclopedia, or updates to your history texts, or your sports stories or whatever.

Q8 : DVD on a first base is going to be  purely an archival type of format ?

PO : No, no. In fact, some of demonstrations on the keynote speech, use DVD and hybrid application over the Internet.

Q9 : As far as the graphic side, on CD or DVD we all want an interactive application, which is fun or beautiful, which has graphics and everything. Some say that on the web people are more looking for straight on information, and they say, it's partly true, that animations on the web and all the little on the side things is not very useful for the web. Actually some say that it works against productivity and troubles information. We see an explosion on the web on the graphics arts. How do you see the things, because this is an information platform. 
 
 

PO : I think your exactly correct. It will be an explosion. The web will become increasingly visual to become increasingly useful. The early days on the web were exactly as you described, completely textual, and for two reasons, they will become much more visual. For people just looking for information, the best way to assimilate information is in the visual and audio fashion, and for people trying to do commerce on the web, the best way to attract customers is to be able to have very compelling sites, that offers you the opportunity to look at what you're going to buy, to compare shops, and so forth, though to see it in the environment you use it. All that takes increasingly visual capability on the computer side and on the content side.

Q10 : Now the sport on the Internet is still to compress everything to its minimum, so we can have a good transmission, and the best possible for this compression. Do you think this sport is going to end with high rate throughput. Do you think we are going to see the optical fiber coming soon and we are going to have high rate throughput. What is the situation in America ?

PO : The situation in America is that fiber to the office is very progressive, and fiber to what we call the last mile, or up to the last mile in the home is veryprogressive. Fiber from that last mile away from the home to the home is not provasive and it's going to take a long time. So people are looking at alternative technologies...

Q11 : ...a long time. What do you mean ?

PO : ...Years and years and years. Because people just don't dig up their streets and put in new infrastructures that easily. So people are looking at ways to utilize the existing infrastructure more efficiently, whether it's over the phone line in terms of ADSL, a technology that have much more powerful modem transmission capability over existing copper phone lines. Or using the coax network, the TV cables around the country to  be able to broadcast essentially unlimited amounts of data into the home with some small reasonnable back channel capability back on the head end for user preference.

Q12 : That means that TV on the Web is now, or still in some years ?

Q : TV seems to be coming off the hertzian area, it's moving to the web and it's going to be more and more with the higher throughput of data, through the coaxial cable or whatever.

PO : Are you suggesting that television broadcasting will move to web based, IP protocol. I don't think so. Maybe with that standard it will take a long, long, long time to evolve if it does. The world, the two billion people hat have televisions are very confortable with that existing technology. I think the trick is to use the delivery mecanism that television employs, whether it's satellite or cable, to be able to use that broadband cable to develop, to deliver things beyond television, whether digital TV signals, or interactive television, or access to the web. That is an existing broadband infrastructure that we, on the technology side, want to take advantage of. And I think that pushing television to the web is pushing upstream in terms of technical capability.

PO : I don't agree with your assertion. I think computers have done nothing but create net employment since they have been deployed. They are productivity enhancers more than they are jobs destroyers. There is not one industry you can point to where computers have eliminated people. In fact every industry you can point to suggest that computers allows you to run your business more efficiently, to lower your costs, to improve your quality of service, and to build your business not to shrink it. It's the other way around.

Q15 : About E-Commerce, there has been some very high figures two or three years ago about the rise of E-Commerce. In recent reports, it seems that E-Commerce doesn't pick up as fast as expected. In America, the laboratory of the world, as far as online. If it's true, why it doesn't pick up as fast, and what has to be done.

PO : I don't know what figures you are refering to. What I can tell you is what the current numbers are. I was at Davos last week, so these numbers are from the White House in terms of their source. The world wide number for E-Commerce in 1997 are best estimated at 10 billion US$. The exit rate, the fourth quarter exit rate, in 1997, left the year at a 20 billion US$ run rate, which suggest that 1998 is going to be something well in excess of 20 billion US$ with that kind of curve. There are a numbers of compagnies already operating in the billion or billion US$ plus range, any commerce along. Dell is over a billion US$, Cisco is over 3,5 billion US$, and Intel in 1998, will be over a billion US$ on electronic commerce. So just those four compagnies alone are four to five billion US$. 
I think what was perhaps misforecasted was how E-Commerce will be deployed. I think the initial success of E-Commerce, the initial large numbers are business to business kind of transactions, reducing the costs of existing channels, and existing services beetween businesses that exists with existing products. The next step which is business to consumer is taking longer to develop because it requires to have infrastructure, it requires security, it requires credit transactions to all be developped in terms of standards before people will really take advantage of that.

Q16 : You said that the next step in E-Commerce is business to client. In the figures you gave me, most of the winners are in the computer business, software business, but some of the traditionnal business expectations are not reached. Why ?

PO : I think it just takes the time to develop the structures as I said earlier to be able to do this confortably. Chrysler which is in the most traditionnal business, automobile manufacturing, said last month that they expect 20% of their cars to be sold over the Internet in 3 years. This is the most traditionnal business. Now obviously there is an issue there relative to their distribution channel that they have to work out : the dealers. Are the dealers going to be parts of that transaction; are they going to be the service end of that transaction, are they going to be separate from it. What has to develop here is the methodologies to do these, it is not a technical issue, it's a business policy, a business practice issue that need to be deployed in terms of doing it. But even (for) compagnies as traditionnal as Chrysler, this is the future, this is the way we are going to sell. It customises our production lines, it minimises our inventorial obsolescence, and it gives the customer exactly what he wants in a faster fashion.

Q17 : A big farm engine US compagny, Case, manage their stocks internationnally on the Internet. All the dealers have access to the mother compagny directly and can place their order directly. Which means that on the stock side, they only stock what they have to produce. Do you think that this is going to be the general strategy of the economy over the Internet ?

PO : Yes, I think so. If you go to the highest level, what Internet Commerce does, is that it allows customized purchasing. And if you are going to have customised purchasing, you can use customers demand to influence what you, as a manufacturer, build. Today most compagnies try to forecast what demand is going to be, what the customers are going to want, they build it then they push it through the channels hopefully for people to buy. As the Internet comes on, and you have this customisation capability, the customers in every industry will increasingly be telling the manufacturers what they want, which makes a much more efficient processing.

Q18 : So that means that industry is going run on lower and lower stock, and they are just going to stock what they need.

PO : Presumably, that's our job as businessmen. Right!?

Q19 : What are the main areas where E-Commerce picks up?

PO : I remember that computers are number 2, and I believe that books are high in the list. Computers, books, travel are high in the list. I don't remember the rank order right now.

Q20 : a personnal question...

PO (laughing) : What do I think of the pie in Bill Gates face ?... 

Q21 : You of course read your e-mail ?

PO : Of course !

Q22 : How long do you spend a day on your e-mail ?

PO : Gosh. It depends, but when I'm travelling, which I do quite often, I will spend at least 2 to 3 hours at night staying caught up.When I'm not travelling, it's probably a little more than that because i'll read everything as opposed to reading what is most important. I get 200 messages a day...

Q23 : Do you read them on screen or on paper ?

PO : On screen. I read my e-mail on screen for 2 to 3 hours a day for 2 reasons. One it's the most efficient way to be able to reply. E-mail is a communication thing, it's not one way, it's multiple ways, either back to the sender or back to multiple recipients. And number 2, there is no reason to kill that many trees. The screen goes away and the tree is alive.

PO : I use it for sort of two primaries : for research, when I want to find a piece of data for a speech or a point I am trying to make, so i'll do selective searching for specific data points. Of course I've got assistance that use the Internet quite provasively to look for information on competitors and customers and then feed me that. But they spend more time on it than I do. I also use it personally to buy some things. I'm a fan of a particular site where you buy small california winerate wines, that you can't get anywhere but at the winery. So that a very convinient to do it, they ship it to your house.

Q25 : About Push technology. Do you think it has a future, and what kind of people need this push of information.

PO : Yes it has a future. I think it needs to be increasingly targeted. Yes I think push tehnology does have a future. As the Internet matures, as I said, there'll be increasingly targeting marketing. people will be able to customise their marketing messages to you based upon buying patterns, or the interest patterns if you tell them what you want to hear. As that happens, the push technology, instead of being just sort of junk-mail coming at you is increasingly taylored towards what you are interested in saying. So when it hits that level, where 80 or 90% of what comes to you is in particular interest to you, I think it will come of age. Today it's still a bit random in terms of its selection of content coming to you.

Q26 : Do you use it ?

PO : I had Pointcast on, at work, and we took it off because it was clogging up our Intel Network... (smile) But before we took it off, i liked it very much.

Q27 : Can we forecast what is going to be the evolution from now ?

PO : The question I get asked the more often is, what will it take for the other 90% of the people in the world to embrace computers ? Either they're cheaper or easier to use or both. I think the answer very simply is both. In order to get computer as provasive as they need to be for everyone to take advantage of, to have a truly global Internet, they need to overcome some of the barriers that exist today. There a lot of peple that are afraid to use keyboards. So we need to be able to go to speech and contexual recognition kind of things. The irony is that in order to make computers simplier to use, computers have to be more powerful, more powerful chips are needed to be able to do speech recognition, that plays against the desire to have lower and lower costs. In the industry, we have this very difficult balance of making them powerful to make them easier, but making sure that the costs are always coming down. That is our challenges in the industry going forward.