The Cellular Conundrum

Name: Sean Maloney
Age: 52
Designation: Chief Sales & Marketing Officer, Intel
Ethnicity: British citizen of Irish descent and grew up in London
Work History: Started at Intel UK. Served as technical assistant to legendary Intel CEO Andy Grove. Handled Intel’s sales for Asia Pacific. In the current assignment since 2006
Hobbies: Has swum across the Thames. Cracked ribs often while skiing. Avowed gym rat
Future: Tipped to be the next CEO of Intel

Sean Maloney is chief sales and marketing officer at Intel, the 800-pound gorilla in technology. He is widely tipped to be the next CEO of the company after Paul Otellini, the current incumbent. This is why when Maloney talks, technology enthusiasts listen very closely. His views have a huge impact on which way technology will head to. Over the last couple of years, Intel has bet big on WiMAX — a technology that allows users to access broadband Internet over a wireless connection — and Maloney is its patron saint. Very recently though, the future of WiMAX has come under intense scrutiny and many obits have been penned to its demise. But Intel and Maloney continue to back it. He spoke to Forbes India in an exclusive interview to Forbes India on why WiMAX is indeed the future, among other things.

Soon after Intel’s last quarter results were announced, most industry watchers sighed in relief. Are things actually turning around?
We can’t give a comprehensive economic view because we are present only in one slice. In the slice of technology we are in, it is heavily sensitive to the Internet. If you look at our business, the takeaway so far is that it bottomed out somewhere in the first quarter and we have been climbing back since then. That obviously makes for a more optimistic picture than last year.

Would you agree with the assessment that the darkest time in personal computing history is over?
We can’t say that. Having lived through the darkest time in the second half of last year, I wouldn’t make an economic prediction. All the indications we have at the moment are that we are moving back up. But I can’t say nothing bad will happen again. We have been in and out of multiple recessions and you learn not to make economic forecasts. Prepare for all conditions. For technology companies, that means just invest and build new stuff.

Way back in 2001, you were among the first people to have said Bluetooth as a technology is dead and that the future is with Wi-Fi. With the benefit of hindsight, we know you were right then. In 2009, if asked to take a call on technology, what will you bet on?
We are now five years into developing the daughter of Wi-Fi, which is WiMAX. That is picking up a lot of global momentum. Both are similar technologies in some ways. The thing is, people have an insatiable requirement for bandwidth. It’s like the traffic in Delhi, which you know will get worse every year. You can predict it. It’s the same thing on the Internet. So basically, laying out technology paths to handle fantastic amounts of data is the next thing.

You’re saying, WiMAX is the next big thing.
For now.
There is a lot of chatter around WiMAX not having taken off as well as you would have wanted it to. Many commentators have argued WiMAX is dead. You added to the chatter when a few months ago you made these remarks about how LTE (a competing technology) is very similar to WiMAX. It was insinuated that your remarks were a trial balloon to figure out what the impact will be on the technology landscape if Intel indeed stopped backing the business. How do you respond to these charges?

The technologies are pretty similar. Obviously, the difference is that WiMAX is here and LTE isn’t. Since the time I made those comments, WiMAX has been deployed in city after city and there is no sign of LTE. At the moment, LTE happens to be something that may happen in the future. WiMAX is happening now. So we are extremely happy with the progress. But we are not bigoted on technology. Just use the best tool. WiMAX was designed for the digital divide. It was designed to deliver data at high speeds. There is a burning need in the world for that and most certainly in India. India may be ahead of many parts of the world in terms of economic growth. But when it comes to broadband access, it is way behind. And that’s an urgent issue I’d say. WiMAX was designed for that task.

Is there a specific WiMAX strategy for emerging markets as opposed to one for developed markets? Do you view these differently?
Back in the 80s, Intel developed a technology called Ethernet, which is now in every computer, every hotel room, low-end computer, high-end computer. The same thing happened with Wi-Fi. WiMAX will eventually get to be that way, a standard way of getting onto broadband. We always try and get one global standard. If you see any of our technologies, they get used in everything. And that’s how it is with WiMAX as well.

On WiMAX adoption, we saw a few setbacks. Nokia stopped production of WiMAX-enabled handsets. Nortel went bankrupt. Intel’s investments in Clearwire hasn’t borne much fruit. How much does that bother you?
Not everybody is going to make money making equipment. There are a few people doubling down, cooling away. But there are others who have done well. There is a healthy WiMAX ecosystem in place now. You go to Moscow or Tokyo; there are computing devices available from dozens of manufacturers. So, I think the folks who are the most hostile to the idea of WiMAX are the ones who want to stay with older technologies because they make money there. They have been very vocal when people pull out. Meanwhile, WiMAX continues to move ahead.

You spoke of hostility to the technology. In India, telecom operators, especially the GSM players, seem to have their reservations about the technology. Then there is the whole thing about a lack of clarity on policy, high licence fees, all of which are unanticipated hurdles.
Cellular operators in India are busy selling cellphones. The market here is not saturated. So, it doesn’t surprise me cellular operators are preoccupied with this. If you go back to the early days of cellular, many of the companies that were successful in cellular were new entrants. And, many of the traditional telecom players at that point were selling fixed lines. They were not successful in making the transition. So, there are new entrants all the time who are willing to make the transition and that is always healthy. If there are service providers who want to do broadband access, wireless Internet as well as cellular services, great. If they don’t and are busy with other things, we understand. But they are not mutually exclusive options.

Is this the kind of thing that you face in other geographies as well?
The landscape is unique place by place. If you look at the oldest 3G markets which were Korea and Japan, they were the first markets to deploy WiMAX. It was no accident. They got over their religious issues and realised they needed a very low cost way to transmit data. Ultimately if you stand back, service providers need to be able to handle mind boggling amounts of data at a low cost. That is going to be the future. And you need the lowest cost way to deal with that. Ultimately, nobody is going to disagree with that. But each country has its own regulatory environment and its own set of local issues. I think the most striking thing about India is that the economic growth rate is high. And it has been high for a long period of time. The economic profile is high. But Internet penetration is low. That is quite conspicuous and there is a great opportunity here for anybody who wants to take advantage.

There is a school of thought that has argued India can perhaps skip the PC to access the Internet and go the cell-phone route. Do you think there is some merit in that argument?
If India were to decide let’s just use the cellphone, the population would be at such a gross disadvantage. It would be such a tragedy. Small and medium businesses without computing will be at a huge disadvantage versus large enterprises. If kids here do not have access to the Internet except through the cellphone unlike kids in other parts of the world, what do you think it will do to the economy in 15 years? So, I would be very wary of taking advice about accessing the Internet through the cellphone. If your child views the Internet through the phone and somebody else gets a full experience, think of the difference. The Web was not designed for the cellphone.
If India were to maintain a massive difference in access to IT versus its competition economically, that would be a big infrastructural set back.

How do technology companies like Intel take a call on what technology to bet on?
The first thing we ask ourselves is, whatever technology you are betting on, can
you manufacture it in hundreds of millions of units? You can make one of anything. Can you make a billion of it and make it reliable? So, when we make a chip, it has to last for years in the most extreme climates. So, is it mass manufacturable and could it be completely global? Technology is global. So, you need to think in global scales.

Are you solving an obvious problem? Are you doing something that tackles a big problem?
We’ve got a digital divide that will get increasingly emotional in the next few years and that will need to be closed. You’ve got energy, healthcare, transportation, construction; all have major issues to deal with. So, we look at our technology developments and ask how we are going to move the needle on these problems. That keeps us busy.