E-business depends on mass production, says executive

Electronic business will succeed only if it is based on mass-produced technology, a senior vice-president at computer chip company Intel has said.

Mr Sean Maloney, who directs its sales and marketing division, said mass-produced standards would win out over proprietary systems in the next five years.

As "e-business" moved into the "red" phase - where there was a return on the bottom line - he said companies would focus on eliminating slack.

Cutting operating costs, which increase when bespoke systems are developed, would become more and more important in this environment, he said.

Intel, the world's largest chip maker, employs 4,400 people at its manufacturing plant at Leixlip, Co Kildare.

At a computer conference in Austin, Texas, Mr Maloney said Intel's investment to date in customised systems had left it with some concerns about downstream costs.

Mr Maloney said the rapid deployment of e-business systems "still matters". But concerns about operating and investment costs would increase as the sector developed, he added.

"The industry is clearly moving towards standardised software solutions.

"Over the next three to five years, e-business will only succeed if based on mass-produced technologies from a variety of companies with their own expertise."

The high cost of creating "front to back" e-business systems - i.e. throughout the supply chain - would require the industry to move toward "zero code modification".

"The take-away from all this is that we believe mass-produced software is going to solve e-business problems."

Intel planned to invest some $300 million (€349 billion)in e-business centres throughout the world, Mr Maloney said. While 12 were already operational, Intel said 18 more would be established before the end of the year.

The company already operates some 18,000 "personalised" sites for its customers and 93 per cent of its customer transactions were conducted online, Mr Maloney added.

The company warned last week that a sales slowdown in Europe would leave it with revenue growth of 3 to 5 per cent in the third quarter above $8.3 billion in the April-June period.

This was far lower than the 9 to 10 per cent previously expected by the market, prompting a massive sell-off of technology stocks late last week.

Intel is seen as a benchmark for the entire sector. It lost more than $60 billion in the sell-off.

The company has declined to comment on demand for PCs after the third quarter.

Earlier this year Intel said it would invest up to $2 billion in the Republic, and create 1,000 jobs by 2004 at the Leixlip facility. The figure will bring Intel's total cumulative investment in Ireland to $4.5 billion.

The jobs will be mainly for people with third-level certificates, diplomas or degrees.

For its part, IDA Ireland has invested around £110 million to date, or around £24,000 per employee since the company set up operations in the Republic in 1989.