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Developing Nations Offer Big Market Opportunities, Says Intel’s Otellini
November 2008
STANFORD GRADUATE SCHOOL OF BUSINESS —Paul Otellini knows a thing or two about making unorthodox career moves. In 2005, he became the first non-engineer named to the top post at Santa Clara-based Intel, the world's leading manufacturer of microprocessors for personal and business computing. His wide-ranging background at Intel contributed to his professional rise.
Likewise, today’s MBA graduates should seek jobs at organizations that encourage them to stretch out of their comfort zone and take on a variety of roles. That was some of the advice dispensed by Otellini, chief executive officer of the computer chip maker, during his View from the Top speech to Business School students on Nov. 7, organized by the School’s Center for Leadership Development and Research.
With an undergraduate degree in economics and an MBA, San Francisco native Otellini passed up jobs at Fairchild Semiconductor and Advanced Micro Devices to join Intel’s finance department in 1974. Rather than aspire to be chief financial officer as many expected, he instead sought out a series of lateral jobs, taking similar-level posts in many different Intel departments including field operations, marketing, product development, and global sales.
“That was done deliberately. All those other jobs molded me along the way,” he said.
He ended up in charge of Intel’s then-nascent business with IBM, right about the time the technology giant decided to install Intel products into its first personal computers. The move made Intel’s business boom while Otellini’s career rose. “Lesson number one?” Otellini said. “Choose wisely.”
His second lesson: When looking for new products, be sure to analyze data and trends, but also trust your intuition. That lesson played out in 2000 at time when Otellini said popularity of the desktop computer “was running out of steam.”
He reckoned that sales of laptop computers could take off if the devices contained an appealing but new feature—Wi-Fi, the wireless technology that is now used widely in personal computers and other electronic devices, including home networks, mobile phones, and video games. In the seven years since Intel began selling the new technology to computer makers, Otellini said the company has generated about $80 billion in revenue.
“Part of the second lesson was that you have to follow your gut, sometimes not listen to the best advisors, and decide where you think the markets are going,” Otellini said.
Continuing to look ahead for new uses for technology remains an important part of product development at the company.
In early November, Intel announced a new e-health line of systems—software and services designed for patients and health care providers. Their newest personal computer is customized to monitor vital signs and deliver health care information to elderly patients who are managing chronic health conditions at home. Intel provides the software needed to run both the new device and the computers used by health care professionals to track and communicate with patients.
In the future, Intel will look for more business in consumer markets in developing nations containing huge populations that are eager for technology.
“China is already the second-largest market for computers in the world, and it will pass the U.S. in the next couple of years,” Otellini predicts. But Intel’s future growth could also be found in Africa, where more cell phones are expected to be sold this year than in India, he said. “So, we are betting on that curve accelerating” as people in developing nations buy handheld devices and less expensive laptops that contain the computer chips produced by Intel.
Otellini received a bachelor's degree in economics from the University of San Francisco in 1972, and an MBA from the University of California, Berkeley, in 1974, the same year he joined Intel. In 2005, he became Intel’s fifth CEO. Previously, he’d served as Intel's president and chief operating officer, and in 2002 he was elected to Intel's board of directors.
—Michele Chandler